FemTech | McKinsey

women’s health enabled better outcomes for female patients and consumers,
Investors and other stakeholders along the value chain and society at large. We examine many of these opportunities and the broader context in which they have developed in a related article, Unlocking Opportunities in Women’s Health Care. In this article, we focus specifically on FemTech: defining what it means, measuring its already impressive growth and exploring its potential, resources, talent and capital to better align with women’s unmet health needs.

Understand FemTech

The term “FemTech” was first coined in 2016 by entrepreneur Ida Tin. In just a few years it has grown into a range of technology-enabled, consumer-centric products and solutions.

For the purposes of this study, we analyzed 763 FemTech companies identified as providing largely technology-enabled, consumer-centric solutions to women’s health, excluding biopharma and mainstream medical devices. We’ve included select non-digital consumer products (with material science innovations), devices (that are patient-friendly), and healthcare clinics (that are consumer-centric). We excluded companies older than 20 years or not exclusively focused on women’s health (diagnostics, nutritional supplements, telemedicine). Companies with health solutions for both men and women were included in the dataset but excluded from the funding calculations.

In just a few years, FemTech has grown to encompass a range of technology-enabled, consumer-centric products and solutions.

FemTech offers a wide range of solutions to improve healthcare for women across a range of women-specific conditions, including maternal health, menstrual health, pelvic and sexual health, fertility, menopause and contraception, as well as a range of general health conditions that affect women disproportionately or differently (e.g Osteoporosis or cardiovascular diseases). Although it is still in its infancy, our research shows that the momentum underlying FemTech is accelerating: public awareness, business creation and funding are increasing (Figure 1).

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FemTech companies are already validating their investment hypotheses. Among others, Progyny, which manages fertility benefits for employers, went public in 2019 with a valuation of over $1 billion; The current market cap is around $4 billion. And the Maven Clinic, a virtual clinic for women’s and family health, was valued at more than $1 billion in a recent Series D investment. In fact, the opportunities are becoming increasingly apparent to multiple players, including investors, researchers, vendors, payers, and legacy pharmaceutical and medical device companies.

A market of possibilities

Estimates for the current FemTech market size range from $500 million to $1 billion, depending on scope. Forecasts point to opportunities for double-digit sales growth. On the digital health front, femtech companies are currently receiving 3 percent of all digital health financing. In our scan of hundreds of FemTech companies, we found a focus on patient support for maternal health, consumer menstrual products, gynecological devices and fertility solutions. Funding reached $2.5 billion in early December 2021. In some cases, femtech companies are filling gaps that have not yet been addressed by incumbent biopharmaceutical and device manufacturers, such as in the area of ​​maternal health. However, this is clearly and promisingly just the beginning of what FemTech can tackle. There are still significant voids (Figure 2).

FemTech startups are proliferating, but meaningful voids remain.

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On the threshold of upheaval

FemTech companies could disrupt healthcare in a number of ways. First breakthroughs are already being made in a number of areas, including:

  • Improving care performance: Virtual clinics like Tia, innovative in-patient clinics like Kindbody, and direct delivery prescription drug services like The Pill Club are giving women more convenient, consumer-centric access to care.
  • Activate self-care: Trackers and wearables, offered by companies like Bloomlife, and at-home diagnostic devices, like those offered by Modern Fertility, are among the femtech solutions that are helping women take better control of their health and health-related data.
  • Improve diagnoses: Clinical diagnostics companies are pushing the scientific frontier to address unmet medical needs in areas such as endometriosis (DotLab) and preterm birth (Sera Prognostics).
  • Dealing with stigmatized areas: Companies are addressing issues that were considered stigmatized, such as menstrual health (Thinx), sexual health (Rosy Wellness), pelvic care (Elvie), and menopause (Elektra Health).
  • Providing culture-sensitive and tailored care: Solutions tailored to subpopulations are emerging for black women (like Health in Her HUE), LGBTQ+ populations (FOLX Health) and women in low- and middle-income countries (Kasha).

The categories in which FemTech is making an impact are increasing – and in some cases, they are also beginning to evolve, overlap and redefine as FemTech companies begin to scale up and look for new ways to expand. For example, Maven started in obstetrics and then expanded through the reproductive life cycle. Peppy, which was founded to provide organizations with a solution to better support their employees after bringing their newborns home, is now also tackling challenges surrounding menopause. Other companies, including models launched on a direct-to-consumer model, are now seeking regulatory approval and reimbursement as they build on their real-world experience and data to create improved solutions for a broader community by stakeholders benefit from better women’s health.

Looking ahead, early risers can carve out opportunities in distinctive white spaces, including by using technology to address women’s health challenges beyond reproductive health and helping to meet the needs of underserved populations such as low-income or minority communities. FemTech also offers significant partnership opportunities for established players in traditional sectors. For example, cosmetics leader L’Oréal recently announced a partnership with period tracking app Clue to increase understanding of the relationship between skin health and the menstrual cycle. As femtech companies gain traction and transform the competitive landscape, stakeholders inside and outside the healthcare ecosystem could well provide additional impetus.

Additionally, FemTech—and indeed improved healthcare for women overall—could help catalyze positive social change throughout the healthcare ecosystem and beyond. Think about menopause, which often occurs when women are most prone to it enter managerial positions. Its impact can affect the number of women in top positions and the quality of women’s experiences in organizations.
Using technological and consumer-centric solutions to manage menopause can serve as a model and enabler for future female leaders.

In that sense, femtech is being driven to a significant extent by female entrepreneurs—more than 70 percent of the femtech companies we analyzed had at least one female founder, compared to a 20 percent norm for new businesses. Indeed, a more inclusive, gender-aware healthcare system across the value chain could help empower more women to become inventors, investors, doctors, founders — and healthier people to advocate for other people’s health challenges. Research has shown that when male inventors set out to solve a health problem, they are more likely to solve a male-centric problem; Female-led teams solve for both.

Greater representation of women among researchers, inventors, investors and founders can create more consumer-centric products and solutions that recognize and address the specific health needs of women. In fact, the market is not only made up of female consumers, but also payers and providers looking for better products and tools to more effectively engage with female end-users. FemTech solutions not only achieve commercial success; they contribute to the conditions for further innovation. Because women are not only consumers but also primary health care decision-makers for themselves and often for their families, better health outcomes for women can lead to better outcomes for society.

As women’s healthcare becomes an increasing priority, FemTech rises to the challenge by matching capital and talent with unmet needs. In a short time, FemTech has already had impressive early successes. An even greater disruption could be at hand.

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