By Ari Wright

The femtech sector is at an inflection point, but there are complicated dynamics at play that startups operating in the space need to contend with.

There are two major challenges that block — but also inspire the potential for — big outcomes in the femtech startup space, which encompasses startups working on various aspects of women’s health and wellness.

The massive information gap

First, data is more limited for femtech startups than companies in most other industries.

Female biology is more complex to study given its cyclical nature and its precious creative potential. The 1977 ban on women of childbearing age from clinical trials was reversed in 1993, but underrepresentation is still an issue since female participants create additional liability around pregnancy.

More and better women’s health data is a prerequisite to creating a better “foundation model” of female biology. With a better basis of understanding of sex-based differences in disease, the industry can unlock high-value, personalized therapies for women.

Placing greater emphasis on understanding the specifics of female biology comparatively also has the potential to unlock insights into the mysteries of aging, the brain and the immune system, all of which manifest differently in women.

Willingness to pay

There are myriad emerging statistics and anecdotes pointing to massive opportunities for improvement — women are diagnosed on average much later than men, are disproportionately impacted by a range of disorders, and have different presenting symptoms to certain diseases and different responses to drugs, not to mention sex-specific diseases.

Unfortunately, these “problems” don’t cost the healthcare industry enough money directly, resulting in low willingness to pay by insurance companies and a low total addressable market for new solutions addressing women specifically.

The result: Women bear the burden of the information gap highlighted above by paying more out of pocket on average and going outside the traditional healthcare system to solve their problems. This has in part given way to the $5.6 trillion wellness industry (the healthcare industry is estimated to be $7.7 trillion).

These two challenges feed off of one another and must be navigated by startups in creative ways. Venture-backable femtech companies must:

1. Start by delivering a clear, undeniable value proposition direct to women that have a willingness and ability to pay. This value proposition can’t be incrementally better than something that might be covered by health insurance, and it can’t get lost in the flurry of wellness products and services that lack clinical validation.
2. Be able to generate quality data that can be leveraged to advance the field and must build trust with consumers to do so. Women are fired up about advancing biomedical research and are willing to participate by sharing their data, making navigating data privacy and operating with high integrity all the more critical.

Venture-backable femtech companies will likely come in two flavors.

Broad healthcare platforms reimagined

These are concierge, tech-driven clinics that will embrace the diversity of biology and approach disease and disorder through a functional systems lens (this doesn’t have to be a dedicated femtech company).

These companies will lead with personalization and prevention-based care, integrating advanced technology to test, monitor and treat.

Groups like One Medical, Parsley Health and Carbon Health are precedents for reinventing the patient experience. Historically, these platforms tend to be capital-intensive and challenging as a result, though telehealth has changed that and virtual clinics are being launched. There are several women-driven concepts today in companies such as Tia, Maven and Oula Health.

Beachhead product and data

There is an opportunity for rigorous, research-driven companies to launch a single product to serve an unmet need unambiguously while simultaneously building valuable proprietary datasets.

A nonhealthcare example: Insights around online purchasing data didn’t exist before Amazon. After nailing its initial, narrow product-market fit (selling books online), the company leveraged its position to become a $2 trillion company. To do this effectively, the initial product must propose a meaningful enough advantage over the status quo.

Asking women to pay for something that’s incrementally better than something they’re getting for free or have already tried is not going to cut it. There is a massive consumer base ready to be delighted with quality femtech, but establishing a true value proposition that will drive adoption and engagement (i.e. willingness to pay) can’t be taken for granted.

Whether device, digital therapy or diagnostic, there are opportunities for companies that can resonate with females around an initial product-market fit.

I wholeheartedly disagree with the premise that femtech isn’t getting funding because of a lack of female investors. Investors will chase deals with large markets and potential outcomes. There is curiosity and eagerness from generalist VCs to find the companies that will redefine care for women.

Today’s femtech companies are true pioneers and will have to address challenging industry dynamics. I believe the companies that are able to do so will reap rewards in investments and pave the way for more, unlocking a wide range of data-driven products, therapies and services for women, inspiring new levels of physical well-being at every stage of life.

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Ari Wright is a principal investor at Bison Ventures, where she leverages her interdisciplinary background to focus on biotech and climate. Previously, she spent five years at Braemar Energy Ventures, an early pioneer in climate and sustainability venture capital. She also spent three years at Global Holdings Management Group, where she led hospitality real estate acquisitions and development, helping to build out the firm’s international hotel platform Lore Group. Wright has a bachelor’s degree in biomedical engineering from Brown University, a master’s degree in engineering green technology from the University of Southern California, and an MBA from Harvard Business School.

Illustration: Dom Guzman

By Ari Wright

The femtech sector is at an inflection point, but there are complicated dynamics at play that startups operating in the space need to contend with.

There are two major challenges that block — but also inspire the potential for — big outcomes in the femtech startup space, which encompasses startups working on various aspects of women’s health and wellness.

The massive information gap

First, data is more limited for femtech startups than companies in most other industries.

Female biology is more complex to study given its cyclical nature and its precious creative potential. The 1977 ban on women of childbearing age from clinical trials was reversed in 1993, but underrepresentation is still an issue since female participants create additional liability around pregnancy.

More and better women’s health data is a prerequisite to creating a better “foundation model” of female biology. With a better basis of understanding of sex-based differences in disease, the industry can unlock high-value, personalized therapies for women.

Placing greater emphasis on understanding the specifics of female biology comparatively also has the potential to unlock insights into the mysteries of aging, the brain and the immune system, all of which manifest differently in women.

Willingness to pay

There are myriad emerging statistics and anecdotes pointing to massive opportunities for improvement — women are diagnosed on average much later than men, are disproportionately impacted by a range of disorders, and have different presenting symptoms to certain diseases and different responses to drugs, not to mention sex-specific diseases.

Unfortunately, these “problems” don’t cost the healthcare industry enough money directly, resulting in low willingness to pay by insurance companies and a low total addressable market for new solutions addressing women specifically.

The result: Women bear the burden of the information gap highlighted above by paying more out of pocket on average and going outside the traditional healthcare system to solve their problems. This has in part given way to the $5.6 trillion wellness industry (the healthcare industry is estimated to be $7.7 trillion).

These two challenges feed off of one another and must be navigated by startups in creative ways. Venture-backable femtech companies must:

1. Start by delivering a clear, undeniable value proposition direct to women that have a willingness and ability to pay. This value proposition can’t be incrementally better than something that might be covered by health insurance, and it can’t get lost in the flurry of wellness products and services that lack clinical validation.
2. Be able to generate quality data that can be leveraged to advance the field and must build trust with consumers to do so. Women are fired up about advancing biomedical research and are willing to participate by sharing their data, making navigating data privacy and operating with high integrity all the more critical.

Venture-backable femtech companies will likely come in two flavors.

Broad healthcare platforms reimagined

These are concierge, tech-driven clinics that will embrace the diversity of biology and approach disease and disorder through a functional systems lens (this doesn’t have to be a dedicated femtech company).

These companies will lead with personalization and prevention-based care, integrating advanced technology to test, monitor and treat.

Groups like One Medical, Parsley Health and Carbon Health are precedents for reinventing the patient experience. Historically, these platforms tend to be capital-intensive and challenging as a result, though telehealth has changed that and virtual clinics are being launched. There are several women-driven concepts today in companies such as Tia, Maven and Oula Health.

Beachhead product and data

There is an opportunity for rigorous, research-driven companies to launch a single product to serve an unmet need unambiguously while simultaneously building valuable proprietary datasets.

A nonhealthcare example: Insights around online purchasing data didn’t exist before Amazon. After nailing its initial, narrow product-market fit (selling books online), the company leveraged its position to become a $2 trillion company. To do this effectively, the initial product must propose a meaningful enough advantage over the status quo.

Asking women to pay for something that’s incrementally better than something they’re getting for free or have already tried is not going to cut it. There is a massive consumer base ready to be delighted with quality femtech, but establishing a true value proposition that will drive adoption and engagement (i.e. willingness to pay) can’t be taken for granted.

Whether device, digital therapy or diagnostic, there are opportunities for companies that can resonate with females around an initial product-market fit.

I wholeheartedly disagree with the premise that femtech isn’t getting funding because of a lack of female investors. Investors will chase deals with large markets and potential outcomes. There is curiosity and eagerness from generalist VCs to find the companies that will redefine care for women.

Today’s femtech companies are true pioneers and will have to address challenging industry dynamics. I believe the companies that are able to do so will reap rewards in investments and pave the way for more, unlocking a wide range of data-driven products, therapies and services for women, inspiring new levels of physical well-being at every stage of life.

---

Ari Wright is a principal investor at Bison Ventures, where she leverages her interdisciplinary background to focus on biotech and climate. Previously, she spent five years at Braemar Energy Ventures, an early pioneer in climate and sustainability venture capital. She also spent three years at Global Holdings Management Group, where she led hospitality real estate acquisitions and development, helping to build out the firm’s international hotel platform Lore Group. Wright has a bachelor’s degree in biomedical engineering from Brown University, a master’s degree in engineering green technology from the University of Southern California, and an MBA from Harvard Business School.

Illustration: Dom Guzman