Mapping Out the FemTech Startup Ecosystem

I have known that I wanted to be a VC for quite some time now, but it was not until earlier this year when I was digging down to the why, I had a breakthrough. I wanted to invest in change, and in order to have an impact and make change happen, I had to understand what I wanted to change first. A couple of things came to mind, but there was one thing I was certain I wanted to change. Female Healthcare. Female healthcare in America sucks, and it is widely underserved by tech.

The Problem

Even though women account for 50.8% of the U.S. population and 49.5% of the world population, women’s healthcare still lags far behind compared to men’s healthcare. When it comes to heart disease, women have a 50% higher chance of getting an inaccurate diagnosis, and women also have higher rates of death during hospitalization for heart attacks. When it comes to strokes, women are 30% more likely than men to have symptoms of stroke misdiagnosed and sent home from the emergency room.

Misdiagnosis:Gynecologists estimates that while endometriosis affects 1 in 10 women of reproductive age, it takes an average of 6 to 10 years for an accurate diagnosis after the first symptoms appear. Misdiagnosis in female healthcare is not just relevant to gynecology. Delayed and missed diagnoses are also common for women in heart disease, stroke, and autoimmune diseases. Oftentimes, when doctors cannot come up with a diagnosis for women’s pain it is dismissed as psychosomatic.

Pain:Women’s pain is taken far less seriously than men’s pain, and women’s pain is more often treated with sedatives instead of pain medication compared to men. Women’s wait time for treatment of the same severity of abdominal pain to men is on average 65 minutes while men only wait 49 minutes in the U.S. One study showed that women who received coronary bypass surgery were only half as likely as men to be prescribed painkillers as compared to men who had undergone the same procedure. The idea in society that women are meant to suffer is one of the reasons why girls are still taught that pain is just a part of being female: sex hurts, period hurts, childbirth hurts, so we shouldn’t ask for things that might alleviate the pain. Priority in acknowledgment and treatment of female pain needs to start in healthcare.

Fertility and Reproduction: The fertility treatment process for women is a very difficult one. Fertility treatments are very costly. One round of in vitro fertilization (IVF) can deplete on average two years of household savings. Most assisted reproduction technologies are not covered by health insurance, and any reimbursements are typically capped. Not to mention, the psychological impact of infertility among women is attributed to the same amount of anxiety as having cancer. More than half of female fertility patients regard IVF as the most upsetting experience in their life. Even with the cost and psychological impact, there is no guarantee that a woman becomes pregnant through IVF. IVF success rate for women under the age of 35 is 40%,and the success rate for women between the ages of 35 and 37 is 31%. The IVF success rate was only 3.9% for women aged 42.

Pregnancy/ Postpartum Care: Mothers never fully get the postpartum care they need after childbirth. Postpartum health care normally occurs during the six weeks after childbirth and is considered vital to the mother’s health. However, six weeks is the average number of postpartum visits covered by insurance companies. Studies show that 1 in 7 women suffer from postpartum depression after childbirth and 80% of cases go untreated. Women are likely to develop postpartum depression after giving birth up to a year, and postpartum depression is often missed in the first six weeks.40% of womenwho experience the severest forms of health difficulties both physical and mental did not seek treatment past the six weeks. Studies also showed that two months postpartum,many mothers experienced pain in the perineum, head, back, and cesarean- section incisions. Many do not get help as it is past the six-week postpartum care. After childbirth, women tend to ignore their health problems because there is a tendency to focus on the newborn. Pain is not just a discomfort to mothers, but studies show that it impedes on a mother’s timely response to her child’s care needs. Poor maternal physical health is related to a decline in a child’s general physical health.

The importance of female healthcare is well documented. Women play a vital part in our society and healthy mothers lead to healthy babies. The magnitude of these issues is too large of a scale for any one startup to tackle and the current infrastructure is simply not working.

Why Now?

When it comes to successful families, women play an important role and are key to sustaining healthy families. More often, women serve as a child’s primary caregiver than men. This space has suddenly become very prevalent, important, and exciting because we are on the fourth wave of feminism with the #metoo movement. Now more than ever women are standing up for their rights in the workplace, health, and equality in all aspects of life. With the rise of more career women, women are having children later in life than before and require more medical intervention. More women are delaying childbirth into their late 30s and early 40s,but still deciding to have children at the same numbers as before. There is a demand for the improvement and efficiency of women’s healthcare to meet these demands.

Enters Technology

Startups in the femtech space are projected to increase in the coming years. Five years ago, the space barely came close to $100 million combined. In this year alone, VC funding in the space will collect more than any other year in the last decade. More than $400 million will be invested in the Femtech space by year-end. Femtech is projected to reach a market size of $50 billion by the year 2025.

The number of deals has not increased over the last three years, but the amount of capital invested has grown significantly since 2016. Women as consumers in the technology marketplace represent an enormous market opportunity and account for nearly $20 trillion in consumer spending.

Mapping Out the FemTech Space

With consideration to my limitations in accessing research, entrepreneurs, and other resources VCs might have, this is not an exhaustive list of all the promising startups in the femtech space. I mainly focused on very early stage companies, and I organized the companies into six general categories.

General Healthcare:

• Description: Startups that are improving the overall clinical healthcare experience for women through genomics-based personalized solutions for women to track their health, on-demand digital clinic care that assists women through conception, pregnancy, and postpartum, and wearable hardware to monitor breast health.
• Companies: NextGen Jane, Maven Clinic, iSono Health

Fertility Monitoring:

• Description: Using connected hardware for women to monitor their fertility in the convenience of their homes with things like an intelligent bracelet to predict fertile days, fertility thermostat for fertility data and analytics, and simple period tracking mobile applications.
• Companies: Ava,Kindara, Flo Health

Pelvic Healthcare:

• Description: Using medical devices to treat women’s sexual health issues targeting pelvic floor health to pelvic treatment for new mothers after childbirth and postmenopausal women.
• Companies: Minerva Surgical, Athena Feminine Technologies, Symbiomix Therapeutics, Elvie

Fertility Solutions:

• Description: Using technology to improve treatments such as IVF, egg freezing, egg donation, embryo screening, fertility treatments, etc.
• Companies: Conceivable, Prelude Fertility, Rinovum, Celmatix, Progyny, Nora Therapeutics

Pregnancy and Nursing Care:

• Description: Using medical care and diagnostic tools to screen women’s health issues during pregnancy and track risks and complications during pregnancy.
• Companies: Sera Prognostics, Lucina Health, Totohealth, Bloomlife, HeraMED, ObsEva, Naya, Moxxly, Babyscripts, Mommy Monitor, Univfy

Fertility Mental Wellness:

• Description: Personalized community insight and fertility experience for the individual. Providing more personalized screening approaches for prevention, treatment, and diagnosis for new mothers.
• Companies: Woebot Labs, Fertility IQ

Findings

Investment Distribution: There has been a pretty consistent distribution in femtech investments from both generalist funds and medtech/biotech funds. Femtech startups that have gained a significant amount of traction have been backed by notable big-name funds. The top 13 most active femtech investorsin the femtech space with deal counts are Y Combinator (9), Arboretum Ventures (7), BoxGroup (7), NEA (6), Founders Fund (6), Astia Angels (6), Interwest Healthcare Partners (6), Chrysalis Ventures (5), Catalyst Health Ventures (5), Union Square Ventures (5), 500 Startups (5), Correlation Ventures (5), and Slow Ventures (5).

Location: The majority of femtech startups are located in the U.S. There were a small number of startups located overseas. The geo distribution is relatively skewed in favor of the U.S. About a handful of femtech startups were located in the UK, Israel, Kenya, and Switzerland.

Regulation: The FDA previously dealt with pharma and medical devices on the hardware front and is becoming more open to dealing with digital health software. There is a digital health software precertification program that expedites the process. More companies will follow this strategic move as it might make regulatory approval arrive sooner. For femtech digital health specifically, there needs to be a more efficient regulatory framework.

Scalability and Exits: VCs should look at femtech and women’s health and wellbeing as an at-large play of a much bigger untapped market. Femtech is not just about introducing new revolutionary products but changing the preconceived notions about women’s health and to have honest conversations about fertility issues and women’s health in general. There are a lack of exits in the femtech space with the exception of nVision($275M) and Counsyl ($375M). VCs have largely viewed this space as more impact investing than financial gain, and although, it may be true that in the femtech space the exit that most investors seek will be longer than the 3 to 4 years most startups shoot for, the financial upside is worth the wait. Millions of women around the world face issues with menstrual health, fertility, pregnancy, pelvic health, etc. Technology will play a key role in women’s health for many years down the road. VCs should strongly consider prioritizing femtech startups in their portfolio and actively working with these startups.

Trends

Prevention and Regular Monitoring: Many of these startups are hoping to combine hardware and data analytics to provide the most accurate results while giving women the added benefit of helping them learn about their bodies and function. Continued use will allow the algorithm to learn patterns about ovulation, monthly periods, temperature fluctuations, hormonal changes, and cycle irregularities. Companies like Ava develop smart Bracelets that will also help women calculate fertile window based on physiological measures by measuring skin temperature, perfusion, heart rate variability, and measuring sleep quality through movement. There is a strong trend around providing more monitored care for women with regular pregnancies and those with high-risk pregnancies from conception to postpartum.

Treatment Approaches: A large number of startups analyzed above in the femtech space occupy the pregnancy and nursing care category. However, a few of the companies are focused on treating female pelvic health issues with hardware and data analytics instead of just using them to monitor women’s health. Companies such as Elvie use hardware to help women perform Kegel exercises to strengthen the pelvic floor. Other startups like Athena will use hardware to detect and rehabilitate common physiological changes that occur in older women, and Athena also provides pelvic treatment for mothers after childbirth.

Specific Needs: Many startups in the femtech space are broadly focused on the general wellbeing of female reproductive health such as fertility, conception, and pregnancy. The market for each of those conditions is large enough to account for nearly the majority of the 50.8% of women in the United States of childbearing age, which will be 528,953 of the women in the U.S. by 2025. If a company takes a targeted approach to create specific products that monitor, treat, or prevent a female health condition they will join a community of startups doing the same and create traction for a community of interested users.

Three Startups that Interest Me

There are a number of startups in the femtech space that interest me, but the three that I am most excited about following are Maven Clinic, Celmatix, and Babyscripts.

Maven Clinic is a digital care clinic that provides care for mother’s throughout their pregnancy and postpartum. They offer video appointments, private messaging with the medical practitioner, and their services include: IVF, egg freezing tracks, pregnancy care, postpartum care, surrogacy, loss tracks, career coaching, etc. Maven Clinic has raised $42.4M in total and is backed by Sequoia, Box Group, Female Founders Fund, and Great Oaks.

Celmatix is using genome sequencing to provide genetic insight to assist physicians in understanding the root causes of underlying reproductive conditions. Celmatix paired with Ferring Pharmaceuticals in August 2018 to target IVF treatment. Their most recent round raised $24.5M in May 2018, and they have raised in total $78.4M.

Babyscripts is a doctor delivered health tool that comes with an active mobile app and monitoring hardware that gives specific tasks related to nutrition, exercise, and provides real-time feedback and intervention by a medical provider in the comfort of a patient’s home. Their most recent Series A round raised $7.7M in July 2017 resulting in a total of $9.8M raised overall.

I think these three have the potential to be very effective and impactful, as well as sustainable. They provide real needs for the problems that exist in women’s healthcare. Other startups in this space I am really excited about are Elvie, Ava, Univfy, and FertilityIQ.

Conclusion

I am very excited about this space and where femtech is going in the next five to ten years. VCs are now realizing that this is an enormous market, and there are a lot of problems that are painful that can be treated or prevented. Because we are at a time in history where more and more women are fighting for the healthcare they deserve and speaking up when things hurt instead of disregarding it as merely “female pain” meant to be endured, this space is bound to grow exponentially.

This is a very large space and there are a lot of moving parts to the research and technology that accompany it. Please feel free to reach out if you are working on a startup that fits into this space, and I missed it in the landscape. Also feel free to reach out if you are passionate about this space and just want to have a meaningful discussion. I can be reached at my Protonmail or Samford addresses.