When Apple launched its iOS 8 HealthKit app in 2014, it claimed that users would be able to monitor all of the metrics in which they were most interested. And yet, one metric that a significant portion of Apple’s customers were likely to be interested in tracking (ie, their period) wasn’t covered by the app at all. This oversight in an industry dominated by male inventors and investors was disappointing, but unsurprising. However, fast forward five years and it looks like the landscape might finally be starting to change.
Rise of femtech
Cue the rise of ‘femtech’ (ie, female technology). This term (which is problematic due to its exclusion of trans and non-binary individuals) was coined by Ida Tin, founder of the period-tracking app Clue. It encapsulates the new category of technology-based products and services targeted specifically at women, most of which are health related (think menstruation and fertility trackers, high-tech breast pumps and disease-diagnosing tampons, to name a few).
This convergence of technology and health is not exclusive to femtech (check out our recent blogpost “The doctor will FaceTime you now: developments in telemedicine and digital health” for an overview of developments in this regard). However, since women account for (roughly) half the population, products designed specifically for them seem like a no-brainer. According to Kilburn & Strode LLP, the numbers reflect this. Calculated at $200 million in 2018, the value of the femtech market is estimated to reach $50 billion by 2025. So what are the reasons behind this sudden growth?
The biggest barrier faced by the femtech industry is lack of representation – both at the development level and in the boardroom. However, Kilburn & Strode LLP reports that accelerators, incubators and mentoring programmes are emerging to address female underrepresentation in tech.
From an investment perspective, it is easy to see why it’s taken so long for technology aimed at women to emerge, with Barnea reporting that only 6% of all decision makers at US venture capital firms are women. Many have attributed the traditional lack of funding to male investors struggling to understand the value proposition of women-orientated products or even finding themselves too embarrassed to ask further questions around technology based on “taboo” subjects such as breastfeeding or periods.
However, this looks set to change with the increase in female fund managers. According to Baker & Hostetler LLP, some of these funds are dedicated exclusively to women's health enterprises (eg, Astarte Ventures and Portfolia), while others – such as the First Women’s Bank of Chicago – will provide financial support to women more generally. This trend is mirrored in an increase of women in private equity firms. For McGuireWoods LLP, there are a number of factors driving this change, including:
- the introduction of new programmes aimed at retaining women;
- the emergence of women-owned firms; and
- a greater focus on gender diversity, including at the executive level.
In light of these positive statistics, it’s surprising to see how few articles on Lexology address this emerging field. Unfortunately, it seems that barriers to success still exist, including societal taboos surrounding women’s health issues and a serious lack of data on how drugs and diseases affect women. That said, the demand for femtech products speaks for itself, so the future of this booming industry is likely to be bright.