The Irony of Femtech: When Men Lead Women’s Health Innovations
In July 2023, period tracking app Flo Health made headlines by becoming the first women’s health app to achieve unicorn status, a term used to describe privately held startups valued at over $1 billion. This milestone was celebrated as a significant achievement for the burgeoning femtech industry, which focuses on technology and products aimed at women’s health. However, the news also sparked a heated debate about the gender dynamics within this sector, particularly the fact that Flo Health was co-founded and led by men.
The Rise of Femtech
The term "femtech" was coined in 2016 by Danish entrepreneur Ida Tin, who is also the CEO of the period tracking app Clue. Initially, femtech referred to software and technology addressing women’s health issues, including menstruation, pregnancy, and menopause. However, Tin has since expanded the definition to encompass any area where women are disproportionately affected compared to men, such as brain health and bone health.
Despite being a relatively new field, femtech is gaining traction, with startups like Daye, which has developed a diagnostic tampon, and Jude, a bladder health startup, emerging as key players. The femtech market is projected to reach a staggering $50 billion by 2030, targeting nearly half the global population. Yet, while women may have inspired the creation of this sector, the leadership and funding landscape remains predominantly male.
The Gender Funding Gap
The irony of Flo Health’s success is not lost on many observers. The app’s co-founder, Dmitry Gurski, acknowledged the significance of reaching unicorn status but also highlighted the broader issue of underfunding for women-led startups. A growing number of women entrepreneurs have taken to social media platforms like LinkedIn to voice their concerns about the lack of funding for female founders, a trend that has persisted for decades.
Data from Sifted reveals a stark contrast in funding between male and female-led femtech companies. In 2023, 57 femtech companies with all-male founding teams raised $731 million, while 105 companies with all-female founding teams shared just $408 million. This disparity raises questions about the criteria investors use when deciding which startups to fund, particularly in a sector dedicated to women’s health.
The Male-Dominated Landscape
Flo Health’s $200 million Series C funding round was particularly noteworthy, as it represented one of the largest fundraises in the femtech industry. However, the fact that many leading femtech companies, including Flo Health, Elvie, and Thyia, have male founders on their boards has led to criticism. Investors appear to favor male-led businesses for female-focused solutions, perpetuating a cycle where women entrepreneurs struggle to secure funding.
Research indicates that having a woman founder can actually hinder a femtech startup’s chances of receiving investment. This trend mirrors the broader venture capital deficit faced by women entrepreneurs across various industries, where only 2% of all VC funding goes to all-female startups, and 26% to mixed-gender teams.
The Impact on Innovation
The implications of this funding gap extend beyond financial disparities; they raise concerns about the direction of innovation within the femtech sector. Critics argue that male-led companies may not fully understand or prioritize the needs and preferences of women. For instance, Flo Health faced backlash for launching a product aimed at male users, called Flo for Partners, which many viewed as tone-deaf and misaligned with the app’s core mission.
The disconnect between the leadership of femtech companies and the women they aim to serve raises questions about the authenticity of their innovations. As one LinkedIn user pointed out, it is difficult to believe that a women’s health app founded and primarily led by men can genuinely align with the interests of those who menstruate.
A Call for Change
The recent discussions surrounding Flo Health’s unicorn status have ignited a broader conversation about the future of femtech and the need for more equitable funding practices. Women entrepreneurs and advocates are calling for a shift in the investment landscape, urging investors to recognize the immense potential of female-led startups in addressing women’s health issues.
Flo Health’s founders have acknowledged the challenges within the ecosystem, stating their hope that their success will inspire more investors to support women’s health initiatives. However, many women entrepreneurs remain skeptical, feeling that the femtech space, which was expected to provide a level playing field, has instead reinforced existing inequalities.
Conclusion: Bridging the Gap
The rise of femtech presents a unique opportunity to address long-overlooked health issues affecting women. However, the current funding landscape, dominated by male-led startups, raises critical questions about representation and innovation in this vital sector. As the conversation continues, it is essential for investors and stakeholders to recognize the importance of diverse leadership in driving meaningful change in women’s health. Only by bridging the gender funding gap can the femtech industry truly fulfill its promise of empowering women and improving their health outcomes.