The Future is Female (Health and Wellness Technology)

Written by Julie Chung, Venture Associate @ Chingona Ventures

Women have been overlooked throughout the history of healthcare. Although they make up 49.5% of the global population, systemic gender biases in healthcare processes, from clinical studies to healthcare delivery, have led to inadequate treatments, gaps in medical research, and delayed diagnoses.

Enter femtech, an industry which in recent years has captured the attention of the venture world, with global venture capital investment surpassing $1 billion in 2021. Here at Chingona Ventures, we are particularly bullish about the potential for femtech to disrupt the healthcare industry and bring optimal care to women. In this article, I provide a high-level market overview of femtech and Chingona Ventures’ investment thesis, which outlines how we identify femtech startups to invest in.

MARKET OVERVIEW

The femtech industry refers to a range of health software and tech-enabled products that cater to female biological needs. The sector currently includes fertility solutions, period-tracking apps, pregnancy and nursing care, women’s sexual wellness, and reproductive system healthcare. Femtech is a sector within health tech that has historically been significantly overlooked and under-funded. Only 3% of total health tech funding went to femtech startups in 2020, according to Forbes. This largely stems from gender biases around topics that are deemed taboo, as well as systemic business structures in which decision-makers are largely male, and therefore do not have experience in, and/or cannot empathize with, female pain points and solutions.

However, the landscape has changed quickly in the last few years. The femtech market was valued at $22.0B in 2020 and is expected to grow to over $60.0B in 2027. The sector is seeing a boom in investments due to many factors including:

· Increased representation of women in the venture capital industry

· Rising awareness, education, and acceptance of women’s health issues

· Key notable femtech deals occurring in the past few years

Many “hot” deals are occurring within the reproductive health space, including menstruation tracking apps, breast pumps, birth control pill subscriptions, and fertility treatments. Femtech is saturated in the fertility and menstruation categories, whereas there are many whitespaces in sexual wellness, urogenital wellness, and pelvic wellness, particularly in the mature phases of the female lifecycle.

We are seeing some notable consumer trends in femtech that will drive increased startup activity:

· Women desire greater control over options for birth control and seek to understand how such treatments affect their bodies, from their overall hormone levels to female-specific chronic illness management. Hormone health startup Aavia, for instance, is helping to educate their consumers on such topics

· Women are opting for more natural alternatives to healthcare and favor sustainable brands and products to help treat menstrual cramps and other PMS symptoms, among other health issues. Actress Ashley Greene’s startup, Hummingway, is one example of such a brand.

CHINGONA VENTURES’ FEMTECH INVESTMENT THESIS

What are we looking for in next-gen women’s wellness companies?

We believe that multiple $1B+ companies will be built around the future of women’s health and wellness. Here’s what we’re looking for in femtech companies:

1. Femtech is a broad sector. We are primarily interested in femtech companies across four key categories: 1) general health and wellness, 2) healthcare facilitation, 3) reproductive health, and 4) pregnancy and family care
   General health and wellness encompasses physical, mental, and sexual wellness. Healthcare facilitation includes AI-driven solutions, medical networks, healthcare delivery, and more. We tend to shy away from hardware that requires FDA approval or brand-new technologies. Reproductive health spans menstruation, fertility, family planning. Pregnancy and family care covers everything from prenatal prep to postnatal care and recovery.
2. Adopts innovative approaches to women’s health research (but doesn’t reinvent the wheel)
   In other words, we find that successful femtech companies are typically great at leveraging or modifying existing technologies in new and effective ways. Kegg, for example, successfully uses impedance technology to track fertility through cervical fluid levels; this technology has been around for decades but was previously only used for farm animals.
3. Addresses taboo topics head-on to improve women’s well-being
   We are excited about femtech companies that are in the business of disrupting the status quo. This means companies that tackle longstanding (and often incorrect) notions of female beauty, pleasure, healthcare, and so on. Our portfolio company Dame is a great example!
4. Fosters a greater sense of unity and camaraderie between women (and men)
   We invest in solutions that really speak to customers, beyond just the bottom line. We believe that the most successful femtech companies are those that care deeply about their customers and foster community, empathy, and understanding.
5. Empowers women’s independence
   Independence from outdated gender stereotypes, societal limitations, and systemic inequities. For example, companies like Dame, a women’s sexual wellness company, fights the age-old notion that women’s pleasure is unimportant when it comes to sex. Companies like Elvie, Babyation, and Imalac are making breast pumps that offer women greater independence in their careers as working mothers.
6. Data-driven solutions
   Numbers don’t lie! We firmly believe that keeping tabs on the data — from customer interviews, user testing, primary and secondary research, product metrics, etc. — takes a story from good to compelling and a company from pre-seed to successful exit.

Additionally, we focus on different criteria depending on the stage of the company:

If pre-product: strong founder-market fit, deep understanding of their target market, ability to navigate regulations (licensing, health regulations, etc.), minimum viable product (MVP), GTM, growth strategy, sign-up lists, large serviceable addressable market (SAM), intellectual property (IP) defensibility, competitive differentiators, etc.

If post-product: key performance indicators (KPIs) including Customer Lifetime Value (CLTV), Customer Acquisition Cost (CAC), churn, unit economics (revenue per unit, cost per unit, profit per unit), monthly recurring revenue (MRR) and annual recurring revenue (ARR), revenue growth, sales pipeline, etc.

Overall, we at Chingona Ventures are excited about the notion of femtech empowering the way women live around the world and we continue to actively look for the next big startups in this space. It doesn’t get any more “chingona,” or “badass,” than that!