Heal Capital | Femtech Roundtable: Market Access for Femtech Founders
International Women’s Day
On March 8, International Women’s Day, Heal Capital kicked off its very first Femtech Roundtable focusing on market access for Femtech start-ups. This is the first in the series, and its overarching motivation is to further advance Femtech in Europe, addressing women health disparity and providing accessible and progressive solutions. The Roundtable included experts in the field from a variety of relevant backgrounds. Together they shared their insights on the field, the challenges facing the market, and some of their most valuable lessons.
Introduction
International Women’s Day is a day of reflection on all that has been achieved by and for women. It also acts as a reminder to all that remains to be done to ensure equality. Within the field of health and wellbeing, women still face alarming disparity in comparison to their male counterparts. However, with the advancement of digital health, the field of Femtech is beginning to flourish.
Before diving into the discussion and market overview, it is necessary to establish what Femtech is. Hana Besbes, from Heal Capital, defined Femtech as:
‘Software, services, diagnostics or product/devices that through technological advancements address women’s medical needs and improve their health and wellness in areas that are unique to women.’
Femtech in general health can be broken down into 5 major segments: Period, Contraception, Fertility, Parenthood and Menopause. Many start-ups are working hard to take over a particular segment.
Hers, a US-based e-commerce company, has taken a step towards the contraception market, offering women birth control prescriptions delivered to their door. Daye, a UK start-up, has created a platform that focuses on delivering safe, sustainable, CBD-infused pain-relieving tampons, innovating menstrual pain treatment and it further plans to offer more science-rooted women health products soon. Kinderheldin is German-based telemedicine start-up aimed towards expecting mothers and parents of young children. In between these 5 core areas are numerous unmet needs in women’s health from PCOS to endometriosis, vaginitis, and vaginismus. Femtech is still in its infancy, but as investments in the field grow and more start-ups become established, many of these subjects will find some resolution.
The Rise of Femtech
What is shocking is that despite so many possibilities in the field of Femtech, it has taken so long to procure any investments. Even for some today, it is deemed too taboo. Femtech founders found themselves speaking in front of investment boards consisting entirely of men, most of which failed to grasp the relevance of such start-ups. Despite resistance found in the VC scene for investing in Femtech start-ups, this market sector shows enormous potential for three crucial reasons.
To begin, women are more inclined towards technology. In fact, women are 75% more likely to use digital tools for healthcare than men. Women are also more likely to go on online for healthcare information.
Along with their openness to technology, women are the top spenders when it comes to healthcare. Women consumers make 80% of buying and usage decisions in healthcare and they account for 56% of health spending. In any other business sector, it is common sense to target products and services to the biggest spender. Yet, despite women in the workforce spending 29% more per capita on healthcare than men, they face a lack of concern for some of their biggest pressing health concerns.
The most important reason, Hana argues, is that to this day,
‘Women’s medical issues are underserved and understudied.’
In the general medical/health landscape, women lack representation in studies, they make up only 19% of participants in clinical trials and let us not forget that the majority of health studies are done through the lens of the male body. Nearly ¾ of medical papers do not account for sex-differences in outcomes, despite the fact that in many cases women experience different symptoms then men. That is one of the reasons why it can take up to 5 years for a woman to be diagnosed with an autoimmune disease. Meanwhile, for female-specific diseases, like endometriosis or PCOS, it can take up to ten years for a correct diagnosis, despite around 10 -15% of women having one of these illnesses.
Receiving an accurate diagnosis for either of these conditions can have a significant positive impact for women. To begin, it can validate their pain, discomfort, and emotional duress. With endometriosis women can experience extreme cramping, bleeding, and pain. To make matters worse is that many times this is written off as minor period cramps. PCOS, caused by hormonal imbalance, in another disease that is the leading cause of infertility, and is linked with an increased risk of diabetes and depression. Femtech is an opportunity to right the imbalance that is ongoing in the healthcare system, creating platforms and products that are tailored to women and their most pressing health needs.
The Gynaecologist Praxis of the Future
As digital health becomes integrated with our healthcare system, the digitalisation of women’s health ecosystem will also unfold.
Dr. Maike Henningsen is a gynaecologist in Germany that has kept a keen eye on this digital transformation. She argues that there will be some significant changes in the role of gynaecologists and their interaction with their patients. These changes happen on two major levels: medical focus and digital transition.
With regards to the medical focus, Dr. Henningsen argues that
‘Gynaecologists will become more specialised, focusing on complex diseases, often narrowing their focus to one single disease.’
Offices in the future will offer specialisations, focusing on diseases like PCOS and endometriosis, or on conditions like menopause or menstrual pain. Part of the reason behind this shift is attributed to the fact that gynaecology is becoming more a female-dominated field. Up until the last few years, men have deeply shaped this sector, however that is rapidly changing. With this demographic shift, issues like menstrual pain or diseases like endometriosis will become more easily validated.
As can be expected with digital health, more gynaecologists will focus on encompassing digital solutions into their care. The standard transitions will no doubt encompass options like video consultations, electronic health records, and more. However, gynaecologists can expect a new major role in their career. As more Femtech start-ups develop, gynaecologists will need to validate these tech solutions, connect them to viable patients and orchestrate the various digital care solutions for their patients.
How to Go-To-Market
Femtech is rapidly evolving, despite the resistance and hurdles it has faced in the past. In the recent years, Femtech has seen gradual change, differentiating between two waves of Femtech products and services.
The first wave of Femtech predominantly focused on wellbeing and lifestyle. Many early Femtech start-ups typically applied a Business to Consumer (B2C) business model. A prime example of first wave Femtech products/services would be the app Flo. Flo is a period-tracking app that includes a symptom checker and offers courses to subscribers revolving around sexual health, pregnancy, and overall wellbeing. The Belarus company was founded in 2015 and recently reached has over 100 million subscribers.
Lina Behrens, Managing Director at Flying Health, has been keeping a close eye on the Femtech scene. At the roundtable, she remarked:
‘What we have seen over the last few years since Ida Tin coined the term Femtech, is a shift from lifestyle to serious health.’
The shift into ‘serious heath’ signifies the arrival of the second wave of Femtech, going beyond wellness/lifestyle to tackle more complex health issues like fertility or chronic conditions like PCOS and endometriosis.
With the push to more ‘serious health,’ the Femtech field has begun developing more deeptech/medical grade products. While B2C approach is still widely applied in the second wave, Lina remarks that there is a growing trend of applying B2B and B2B2C business models. As the second wave has begun, many new start-ups have been showing up like Gyntools, Endodiag, Syrona Health, Overture, and much more.
Second Wave Examples
B2C: Many women today are looking to gain more insight into their health and Inne minilab allows them to do exactly that. Inne is a hormone-based minilab that women can order directly to their door. It provides a saliva test so that women may track their fertility and make their own decisions. There is the one-time purchase of the medical device (minilab) along with various subscription plans (3-month, 6-month etc) to receive inne Strip. The lab connects with personal mobile device and provides rapid updates.
B2B2C: Syrona Health is a spin out from Cambridge University that established evidence-based research to create an app for women with a focus endometriosis. Syrona Health is marketed towards businesses who in turn offer it employees. The app allows women to track their symptoms, get doctor-approved insights, and access the endo-community. It further expands its reach by addressing problems linked with endometriosis, like pain management, fertility, and impact on mental health.
B2B: Gyntools is a prime example of a B2B approach with a medical grade tech approach. It offers clinics a sophisticated diagnostic tool that can aid with vaginitis. Vaginitis is a common cause for tens of millions of clinic visits each year, however 40% to 50% of first visits ends with a misdiagnosis and thus incorrect treatment and health complications. Gyntools is offering clinics a solution with its new tech.
Serious Health Challenges
However, with this swing into serious health comes new challenges and obstacle. As this looks to address more serious biomedical health concerns, it faces a multitude of barriers to ensure patient safety. To verify that Femtech start-ups address patient pain points, regulatory checkpoints, and provide clinical evidence, a collaboration with gynaecologists would be an optimal solution. This is also compounded by the fact that gynaecologists will be essential in giving the start-up access to consumer/patients. This approach follows a more B2B2C or B2B model.
Dr. Maike Henningsen has been watching this new trend unfold and has supplied a few key points to address. Here are some of her key highlights for Femtech start-ups focusing on the latter bio/deeptech approach.
1. The start-up should be well connected and familiar with the Healthcare system, working alongside it.
2. The start-up team should have at least one person that can provide expertise on their focus area.
3. Collaboration with experts/physicians/gynaecologist will greatly improve the chances of a start-up being accepted and overcoming any regulatory issues.
4. Acceptance from gynaecologists and other relevant professionals will be based on well-supported studies.
5. While establishing strong ties with the medical community is essential, addressing the patients adequately should not be overlooked.
For those who are left frustrated regarding getting a physician aboard, keep trying. Dr. Henningsen states that within the field of Femtech
‘There is a wind of change, doctors are now more open to this and are very interested. Don’t stop reaching out to them.’
She also warns that founders should not expect physicians to come up with plans to monetize your healthtech solution or how to enter the market. This is for you to discover for yourself!
Where to Start as FemTech founder
Now before we send you off with all this information, we asked Dr. Paul Hadrossek, founder of Femtech start-up Kinderheldin, to share some of his most valued lessons of being a Femtech founder. Here is what he shared with us!
1. Ask yourself about the goals: What is your product, where would you like it to go and what is driving your perseverance? Ask yourself what and why.
2. Plain vanilla most likely beats Rocket science regarding first steps in the healthcare system: it’s easier to start with a simple solution, bring it into the market and then grow and evolve outside of it.
3. Do not only talk to your users — talk to every stakeholder: this includes insurances, doctors and whoever may be involved in the field of your solution.
4. Know more about regulatory for your specific solution than the insurance companies if reimbursement is one of your goals.
5. Reimbursement alone is not the holy grail for Femtech Start-ups: Chose your path to a suitable business model wisely, reaching reimbursement takes a lot of time and effort.
The Venture Capital View on FemTech
Based on the previous paragraphs, you can surely imagine why Heal Capital is excited about the Femtech scene. Hana has developed Heal Capitals investment thesis for Femtech. Our prime focus will be on reproductive health (including menstrual health and non-hormonal contraception), uterus health (i.e. sexual and vaginal health), and menopause.
Within these focus areas, Hana is looking for a second wave femtech start-up that goes beyond minor improvements in the patient journey, but rather revolutionises and re-imagines the entire journey by owning it. With this in mind, she is hoping to find the Femtech VIMPRO: i.e. a vertically integrated model that can create an end-to-end patient journey focused on addressing one of the previously mentioned focus areas. The ideal VIMPRO would include a deeptech approach/medical grade solution and is further backed by evidence-based research that can be used to validate it to the clinicians and regulatory system. Currently, there is no clear FemTech alternative Care Champion in Europe, which creates the exciting opportunity to build a new category leader.
About the Authors
Prof. Dr. med. Maike Henningsen: is medical doctor in gynaecology and obstetric, and professor of Digital Health at University of Witten/Herdecke. Dr. Henningsen was trained at Universitätskrankenhaus Hamburg Eppendorf, completing her PhD and doctorate with specialisation in the field of female medicine and oncology. Dr. Henningsen has been engaged as mentor and advisor for FemTech and digital health startups, as part of the Health Pioneers Institute, and beyond, providing a physician’s perspective while designing and developing the product.
Lina Behrens: is the Managing Director at Flying Health, the leading ecosystem for Next Generation Healthcare. Flying Health helps industry leaders and startups to navigate the healthcare system of tomorrow and creates innovative value chains. FemaleOneZero named her one of the 20 women in Digital Health in Germany and she was selected as one of the finalists in the Digital Female Leader healthcare category in 2020 by Global Digital Women.
Dr. Paul Hadrossek: In 2017, Dr. Hadrossek founded the telemedicine FemTech startup Kinderheldin together with Fabian Müller and Heartbeat Labs targeting the needs of pregnant women and parents. Kinderheldin currently cooperates with more than 55 German health insurance companies and with clinics, large employers and cities. Dr. Hadrossek additionally advises other companies and startups in the healthcare field regardin innovation, digital business models and market access strategies.
Hana Besbes: is an Investment Professional with Heal Capital. Prior to Heal, Hana was an active Angel Investor, invested in 35+ startups, including Digital Health and FemTech, and is an advocate of female founders in tech. Hana is a former top-tier strategy consultant with BCG and Roland Berger with > 6 years across Europe and MENA, and skilled in building digital business models and scaling them. Hana combines business savviness with a strong technical background as Dipl.-Ing. Electrical Engineering, MSc Telecommunications.
