Is Femtech Investment-Ready? — Join the debate!

In this thought-provoking article our Investment Associate, Mascha Bonk, thoroughly examines the multifaceted realm of Women’s Health. Exploring the spectrum of opportunities and challenges, Mascha’s article not only illuminates this dynamic landscape but also encourages readers to initiate a constructive debate on the complexities of investing into this space.

At Ananda, we’re all about diving deep into a topic to determine its investment potential. As a woman who has personally experienced the shortcomings of our healthcare system, I was eager to explore the world of Women’s Health as my latest research project. I spoke with a plethora of experts from various fields — including founders, investors, healthcare professionals, and industry insiders — and it was quite a rollercoaster ride: From enthusiastic conviction that Femtech should be at the top of every VC’s radar, to contemplating that it might not be a viable investment field at all. Eventually, I have decided to write it all down, not only to sort my own thoughts but also to invite others (yes, this is probably you) to contribute to the debate. So here it comes, my collected thoughts on:
“Is (European) Femtech VC-Investment-Ready?”

Part 1 — Why we should all be Femtech Investors

💥 The impact — To be blunt, the current state of women’s health is miserable. Women’s health has consistently been disregarded and underfunded, resulting in a substantial gap in our comprehension of the functioning of women’s bodies and the most effective means of promoting women’s health.

Historically, clinical trials have often excluded women because the collection of additional data points across the menstrual cycle, compared to male participants, has led to lengthier and costlier trials resulting in a lack of gender-specific data. This exclusion is further exacerbated in the case of pregnant women, where concerns about the potential effects of investigational drugs and devices on foetal development have contributed to their underrepresentation in clinical research. Further, this lack of data has led to inadequate treatment for women, as healthcare providers may be forced to extrapolate data from male-dominated studies or use a one-size-fits-all approach that does not consider the unique healthcare needs of women. To illustrate, despite women having a lower likelihood of experiencing heart attacks than men, they are more prone to severe consequences including death. This is owing to the lack of attention toward female symptoms in medical education, causing a misinterpretation of female symptoms as abnormal in clinical practice.

Despite the growing awareness of the need to include women in clinical trials, a mere 3% of funding is dedicated to female-specific conditions. This allocation of resources, or rather the lack thereof, perpetuates a stark reality for many women who are confronted with either nonexistent or suboptimal diagnostic and treatment options. Consider, for instance, the case of endometriosis, a condition that affects approximately 10% of women in their reproductive years. The average time to diagnose endometriosis is a staggering seven years, and the only treatment option available is often a recurring, highly invasive surgery.

As a female impact investor, it is both disconcerting and remarkable to witness how the healthcare system has failed and continues to fail women in such profound and consequential ways. The stark absence of adequate diagnostic and treatment options is unacceptable: women are entitled to a higher standard of healthcare, and it is imperative that we explore innovative ways to deliver the healthcare they require and unequivocally deserve.

🤑 The market — Fortunately, particularly for my fellow VC investors, the Femtech sector not only promises substantial opportunities for societal impact but also represents a massive market opportunity.

I am relieved that I haven’t encountered anyone who thinks women’s health is too niche to invest in. But just in case there are any doubters out there, let me offer a quick calculation:

Woman Health = EVERY woman = 50% of the population =
4 BN Potential Customers

Not only do women make up 50% of the population but they are responsible for 80% of all healthcare-related buying decisions. Obviously, this is very high-level perspective, so I looked at some of the largest categories within Femtech and broke it down further based on prevalence and market size:

Part 2 — The lack of innovation in today’s FemTech market

Driven by the immense potential — both in terms of impact and market opportunity — I enthusiastically set out to find European startups looking to revolutionise women’s healthcare. Unfortunately, my zeal was met with a disconcerting realisation: there were only a few innovative ventures truly igniting my enthusiasm. In a conversation with one of our portfolio founders, Hakim Yadi, PhD in women’s health and CEO of ClosedLoopMedicine, he aptly described the situation as an abundance of “non-innovative noise” within the FemTech market.

The realm of FemTech has received a lot of traction over recent years, with the majority of startups in the field predominantly focusing their efforts on (sustainable) consumer/wellbeing products, such as menstrual care products and supplements, or community Apps that deliver extensive educational content on female-specific conditions, such as PCOS or endometriosis. While the latter category, in particular, offers the potential to greatly benefit women who feel isolated in dealing with their symptoms, both face challenges in terms of differentiation, high customer acquisition costs (CACs), and the expansion of their scope beyond initial focus areas. In essence: Vitamins, no painkillers. This prompts the key question: why are there so few startups committed to fundamentally reshaping the paradigm of preventing, diagnosing and treating female-specific health conditions?

📊 The lack of women’s health data

The dearth of gender-specific data remains a significant hurdle for innovation in Femtech. As previously highlighted, historical exclusion of women from clinical trials has resulted in an insufficient understanding of women’s health needs. Consequently, many startups must initiate their own clinical trials, adding substantial costs, time, and risk.

💵 The lack of reimbursement codes

The absence of specific reimbursement codes for Femtech products and services makes it challenging for startups to gain traction and secure funding. Without proper coding, insurance coverage and reimbursement become elusive. The problem at hand lies in the complexity of regulatory pathways, primarily because numerous conditions are characterised as “syndromes” lacking silver-bullet treatment options. In addition, establishing disease-modifying endpoints can present dilemmas e.g. the use of pain as an endpoint relies heavily on self-reporting and is primarily subjective in nature.

👩‍⚕️ The lack of women health specialists

To make matters even worse, due to the lack of specialists, a multitude of medical conditions are treated in primary care by generalist healthcare practitioners, who are extremely difficult to market to. Even when women seek out specialists, they often visit gynaecologists when endocrinologists, the true hormonal health experts, would be the more appropriate choice. Limited awareness, an insufficient number of specialists, and the absence of an integrated healthcare system that facilitates data sharing among healthcare providers, exacerbate these key bottlenecks.

👀 The lack of attention on decision-maker level

Despite growing awareness of women’s health issues, critical stakeholders in healthcare, pharmaceuticals, research, and policy-making continue to overlook the importance of this space. The allocation of research funding for women’s health does not align with the actual burden of diseases affecting women. Several factors contribute to this disparity:

• Complexity: Women’s health is intricate, leading to limited understanding and reluctance to delve into its complexities.
• Underrepresentation: Women remain underrepresented in key decision-making roles, hindering efforts to prioritise women’s health adequately.
• Lack of Reference Cases: The scarcity of successful reference cases in women’s health magnifies perceived risks associated with research and investment.
• Gender Pain Gap: The persistence of the “gender pain gap” perpetuates the belief that certain women’s symptoms and conditions are an inherent part of their gender, leading to their dismissal or downplaying. This societal acceptance hinders progress toward gender-equitable healthcare.

Part 3 — So what?

This overview emphasises that Women’s Health confronts enduring challenges. Nevertheless, the growing demand from women to gain a deeper understanding of their bodily functions and hormonal well-being is too compelling to dismiss this entire domain any further. While widespread innovation might necessitate a few additional years to fully manifest, promising startups are already emerging, shaping the path ahead.

Four categories that I am particularly excited about are:

💰 Providing Holistic, Affordable, and Accessible Care

Startups to watch: Peppy, Syrona, Fertifa, Apryl

These providers have developed holistic women’s health solutions that employees can access via their benefits programs. The offering typically includes guidance and clinical advice from trained healthcare professionals in areas such as fertility, sexual and hormonal health, and menopause. In addition to that, many of these providers also offer financial assistance and benefits for fertility treatments and family planning services.

Although achieving product differentiation can be challenging and hinges on effective execution, these startups have identified a scalable business model that renders services both affordable and readily accessible, all while accumulating invaluable user data in the process. I am confident that their role as data acquisition facilitators will prove instrumental in accelerating future advancements in product innovation.

🔍 Gaining profound insights through diagnostics

Startups to watch: The Blood, Dama Health, Levy Health, Endogene.Bio

Women’s Health care pathways have historically adopted a one-size-fits-all approach, overlooking the unique hormonal health profiles and needs of individual women. However, recent advancements in diagnostics are ushering in a new era of personalised reproductive care.

The showcased startups cover a range of areas, from menstrual health and contraception to fertility. For instance, Levy Health offers an at-home diagnostics test designed to help couples understand the root causes of their fertility challenges. Subsequently, they formulate personalised treatment plans for each user. Personalised diagnostics not only empower individuals with a deeper understanding of their bodies but also enable healthcare providers to offer more effective, precise, and tailored treatments.

🧪 Making care fundamentally better via product innovation

Startups to watch: Inne, Natural Cycles, Bea Fertility, Samphire Neuroscience, Ovom Care

This category is particularly exciting because it represents the initial wave of real product innovation. These startups are either making substantial improvements to existing products and care methods or introducing entirely new solutions.

Consider Inne and Natural Cycles as prime examples. Both companies have developed hormone-free alternatives to the contraceptive pill. This is crucial because many women have endured severe side effects from traditional birth control methods but continued using them due to the absence of reliable and convenient alternatives. Natural Cycles requires users to monitor their basal temperature (also possible via a partnership with Oura), while Inne directly measures a user’s progesterone levels with a saliva-based at-home test.

Conversely, Samphire Neuroscience has carved out an entirely new category aimed at managing menstrual pain. The startup has ingeniously devised a headband that administers low-current pulses to stimulate specific parts of the brain. These stimulations work to restore balance in the brain, effectively alleviating pain and granting the user greater control over their mood, energy levels, and mental clarity.

🧬 Making care fundamentally better via therapeutic innovation

Startups to watch: Gynica, Notify Therapeutics, Gedea Biotech, Freya Biosciences

Innovative treatments for reproductive disorders are increasingly important. Recent advances in computational biology and AI have ushered in a techbio era, focusing on data- and tech-driven R&D. This shift, along with the surge in -omic data, enables a deeper understanding of reproductive diseases.

While the below startups are not strictly techbio, they represent the kind of startup we’d like to see more of! Freya Biosciences and Gedea Biotech concentrate on the microbiome, targeting dysbiosis and vaginosis. Gedea develops alternative antibiotics, while Freya focuses on live microbial therapeutics for vaginal health and fertility. This reflects a broader trend of exploring symbiotic microbes’ role in reproductive health, akin to their impact on immune regulation via the gut microbiome.

Notify Therapeutics is innovating in fertility treatments, especially for early-stage IVF, with compounds that activate dormant follicles, significantly improving IVF outcomes for women with reduced ovarian reserves. Gynica is channeling its R&D towards cannabinoids for treating endometriosis and related gynaecological pains, addressing the needs of underrepresented patients with endometriosis.

However, the effectiveness of these data-driven approaches hinges on the quality and diversity of datasets. It’s vital to overcome historic biases against female and non-western data in new research. The goal is to see techbio companies develop platforms for reproductive biology, supported by biopharma and regulators, to expedite therapeutic solutions to clinical stages.

📥 Now it’s time to join the debate! Passionate about Women’s Health? Eager to discuss or challenge any of my assumptions? Or have you launched your own Femtech startup and think Ananda Impact Ventures could be a great partner? Reach out to me at mb@ananda.vc.

At Ananda, we invest in companies that build stuff that truly matters. Are you an entrepreneur with a big vision and mission to create something extraordinary? Please get in touch!

Written by Mascha Bonk, Investment Associate at Ananda Impact Ventures