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Blog | May 24, 2021
WRITTEN BY Pauliina Martikainen
A few weeks back I spoke at EU Startups Summit 2021 about one of my favorite topics - femtech and its latest developments and trends. We've all seen the headlines femtech has captured in recent years and investment estimates highlighting its massive potential. We've come a long way since 2016 when Clue's co-founder Ida Tin famously coined the term 'femtech' to describe companies building solutions to cater women's health. But how is the femtech industry in Europe really doing?
To answer this, our team gathered an extensive data package for the Summit and now we're thrilled to share the findings with everyone. I've outlined 1) how massive the femtech opportunity really is, 2) primary trends driving femtech, 3) the three main categories that have caught the most attention in the past years, and 4) potential new femtech opportunities.
To understand the magnitude of femtech as a business opportunity, I always start with the following equation:
The obvious starting point is that the TAM for femtech is over half of the world's population - there aren't many fields that can say the same. Second, we have a huge amount of scientific and technological debt when it comes to female health. Female health has always been underfunded, under-researched and underserved, and there's a lack of innovation historically when it comes to women's health. It's crazy how far technology has come since for example the 1960s - think about the internet and smartphones - but the science around women's bodies has barely progressed. This brings me to my third point: the time's ripe to bridge this gap and build technology and products that work for women.
If you're still in doubt, look at the global femtech numbers. They speak for themselves:
Women's health has been conflated with reproductive health for decades. Now attitudes are changing and a more complete picture is emerging as research accelerates into a wider array of women's health issues. So for example, when we talk about periods, we're not only talking about how to get pregnant, but how women can approach their cycle more holistically and influence their lifestyle at large.
A greater effort towards a more comprehensive picture has also been propelled by the widespread adoption of new online channels and technologies like mobile apps and at-home diagnostic kits. The growing presence of telehealth democratizes access to relevant healthcare for women at different stages of life, and evidence-based digital therapeutics are starting to offer previously unavailable insights.
Lastly, there's growth in community-led support across a number of different femtech categories, thanks to issues surrounding female health becoming increasingly less stigmatized. Children born today will likely find it absurd that in our childhood, ads for period products relied on a blue substance instead of blood.
When looking at the average perfectly healthy European woman's life cycle, there's a vast array of opportunities for mainstream femtech products - we're essentially talking about everything from when one gets their period to managing their menopause. I want to emphasize that this is an oversimplified picture that makes stereotypical assumptions - for example, not everyone chooses to or can have children - but it helps to understand the three main categories for femtech opportunities: 1) sextech 2) reproductive health and fertility and 3) menopause tech.
How we define it: sextech covers solutions that foster sexual pleasure and wellbeing. Looking at the current sextech landscape, we've identified four subcategories of companies that exist in the European market:
__Examples of companies in this space: __
Blueheart has launched a digital sex therapy app
Feeld dating app to explore desires
iPlaySafe app to test, track and share sexual health status
Elara Care app to optimise your nutrition, training and mental health according to your menstrual cycle
LELO intimate lifestyle company that designs, develops and manufactures upmarket sex toys
Amorana online shop with products like popular Womanizer stimulator
Kama app to educate and boost sexual wellbeing and provide both mental and physiological benefits
Spotting the trends: the democratization and growing social acceptance of (especially female) sexual pleasure and wellbeing have made sextech a field that can't be ignored. We've reached a tipping point where millennials and Gen Z see pleasure as not so much a luxury as a necessity and an element of self-care for the body and mind. Interestingly, sex is also proving to be pandemic-proof: Covid-19 has greatly increased the interest towards sextech and companies have seen an increase in sales throughout the pandemic. Finally, we see inclusivity driving sextech forward as well: for example, one third of Gen Z say they have a friend that uses a gender-neutral pronoun, which is likely to drive the popularity of inclusive and even gender neutral sex devices and solutions in the future (and of course gender is only one lens through which users tend to identify themselves.)
Sextech funding in Europe (source: Dealroom & Maki's data)
Funding data: it seems like 2020 may prove to be a turning point for sextech, with €11m total funding for European companies. Because of relatively low deal volume and total funding, we're missing enough data to generate clear enough insights, but the past years are encouraging as we're seeing growth in the sector, particularly in sexual wellness and education.
How we define it: Reproductive health and fertility is definitely the most established area within femtech and covers solutions that are safer, more personalized, and view reproductive health and fertility holistically. We've divided the companies again into four rough areas:
Examples of companies in this space:
Tuune help women better understand their own hormonal balance and provide them a personalized pill
Oui creating a non-hormonal contraceptive capsule for women.
Apryl fertility and family forming as employee benefits
Apricity machine learning to help users gain insights into their fertility
Ava wearable sensors to offer fertility insights
Woom calculates the daily probability of pregnancy based on the woman's menstrual cycle, the couple's lifestyle and biometric data
Keleya offers pregnant women individualized workouts and diet plans
Pregnolia cervical stiffness measurement tests to help women understand the risks of premature birth
Spotting the trends: a dominant trend affecting the direction of the companies in this category is that the average age when women have children has increased gradually - the mean age of women giving birth to their first child was 29.4 years in 2019 in Europe. This reflects a wider trend whereby women of all ages are starting to take more control over their reproductive health, demanding solutions that are safer, more holistic and more personalized.
Women today are also more aware of the role that hormones play in their life, causing the most common contraceptive - the pill - to decrease in popularity. While non-hormonal options today are still somewhat limited, new solutions digital contraceptives are emerging. Meanwhile a growing number of people are also experiencing trouble conceiving, and thus the market for fertility services has continued to grow. In today's environment remote testing and monitoring solutions complemented by virtual care are growing in popularity, as they bring accessible and measurable insights more easily.
Reproductive health & fertility funding in Europe (source: Dealroom & Maki's data)
Funding data: we estimate that around €230m has been invested into European startups working within reproductive health and fertility. Between 2016–2019 funding exceeded €20m each year, showing the relative maturity of this category. Unlike sextech, companies working within reproductive health and fertility have matured to raise follow-on funding rounds, and e.g. Natural Cycles and Ava have closed substantial Series B rounds.
However, funding in this category reduced year-on-year since 2017 - and what's noteworthy is that we haven't seen many exits, albeit ObsEva's IPO and an acquisition of Finox Biotech. (These have been left out to avoid skewing the data.)
How we define it: menopause is defined as the end of a woman's menstrual cycle and is diagnosed after a woman has gone 12 months without a menstrual period, and menopause tech taps into this phase of a woman's life cycle. It's one of the hot areas in femtech and with good reason - by 2025 there'll be over 1 billion people experiencing menopause in the world. There are various different approaches to making menopausal women's life easier, which broadly fall into two main camps:
Examples of companies in this space:
Grace Cooling bracelet that sends localized cooling sensations to the wrist
Moona water cooling technology to regulate temperature on pillows to improve the quality and duration of sleep
Mpowder aids with the different stages of perimenopause and menopause
XbyX's magnesium Vitamin D4 tablets to aid with hormonal fluctuation
Vira Health evidence-based interventions for menopause symptoms like symptoms like sleep, weight gain and pelvic floor issues
Bia Care an online clinic with a group-consultation approach
LiveBetterWith a digital platform for people living with long-term health conditions including menopause
B-wom a personalized health coaching for women
Spotting the trends: Menopause has traditionally been thought of as a singular condition to "treat" rather than viewed as a broader transition in a woman's life, complete with its own set of health concerns. But there's a growing focus on individual menopausal experiences and how they connect with overall health. What is obvious is that there's a massive big data opportunity for menopause companies that manage to build feedback loops from symptoms to how treatments work. They could potentially tap into valuable data that can be used in research and to create and validate new treatments.
93% of menopausal women state that they're interested in non-invasive tech solutions, yet the most common treatment today is still hormonal replacement therapy (HRT), which is very much a hit and miss and like hormone-based contraceptives, can also cause side effects. As we've already seen in many other areas of female health, demystifying and destigmatizing menopause enables community-driven support and that is likely to be a large driver of change in the industry.
Menopause funding in Europe (source: Dealroom & Maki's data)
Funding data: While a dozen VC-backed menopause companies originate from Europe, they're still early - most having only raised their first rounds - meaning that there's still room for considerable growth. Aside from Kandy Therapeutics that raised a €30m Series C round in 2018 (and subsequently was acquired by Bayer in 2020 for $400m), the number of rounds have not translated into high funding figures. Outside of Kandy Therapeutics, only LiveBetterWith have raised a later round than a Seed so far. There are, however, a number of companies that have raised and are at the stage of raising a Series A, which should happen in the next twelve months.
From an investor point of view, femtech's large market opportunity comes from the fact that the space is still in its early days. And the three sectors reviewed are one of the most talked about, but there's much more opportunities lying ahead.
Here are a few opportunities beyond the areas we've already covered that I'm eager to see more companies focus on:
Harnessing your hormones: I see a big opportunity in femtech products that take a more holistic approach to female health and look beyond reproduction. There's room for products that help women understand their unique cycle and hormonal health for increased overall wellbeing, productivity and creativity, and I'd be curious to see products that help sync your unique cycle with suitable training or sync your cycle with the right nutrition.
Solutions beyond the perfectly healthy Western woman: I look forward to seeing more products tackle big problems for other personas than the perfectly healthy Western woman. For example, there are specific conditions like endometriosis or PCOS affecting a huge number of women, and targeted products could provide help for diagnosis and treatment. And not to mention the need for targeted femtech solutions for underrepresented groups such as women of colour or sexual minorities that have been, to an extent, overlooked in product development so far.
Longevity: solutions helping women enjoy a few more quality-adjusted years. This is a very hot space in the US and increasingly in Europe, as most deaths are caused by age-related diseases. Imagine if we could diagnose perimenopause earlier, and perhaps intervene and slow the progress down - not to mention other products for future post-menopausal women that would help them enjoy a few more "quality-adjusted life years."
I'll keep on mapping the femtech and new categories, so I'm always happy to chat with femtech founders and other femtech investors on the latest developments. If you share interest towards femtech, please reach out to firstname.lastname@example.org.