Zoe Chew

June 29, 2022

Rise of Femtech: A $50 Billion Market Opportunity

⭐️ Premium Post

Issue #17

Femtech has a massive total addressable market across multiple billion-dollar industries such as (1) D2C and e-commerce, (2) digital health, (3) at-home test kit, and (4) employee health.

The rise of femtech has elevated equal access to healthcare and well-being for all. Women’s unique health issues are being addressed by companies like Allara Health which treats polycystic ovary syndrome (PCOS); Feminade for hormonal tests, Maven Clinic for pregnancy care, and Carrot Fertility for fertility care.

In this tech report, we’ll analyze top startups in femtech, and:

- how they are differentiated

- how they tap into validated market needs

- new monetization approaches

- where the future demand is heading

- how builders & funders can capitalize on these market trends and win.

1. Top 9 femtech key trends:

(1) VC funding in femtech is growing:

  • Globally, femtech startups raised $2.5 billion in Q4 2021 — up 3x from $750 million in 2020.
  • Top categories for femtech funding: Primary care ($668 million), Pregnancy and parenthood care ($316 million), and Fertility support ($220 million). 
  • Femtech funding is making positive progress, however, a significant funding gap still exists–with only 7% of digital health funding going to women’s health.

(2) Rise of femtech unicorns and top funding round:

(3) Direct-to-consumer femtech is becoming the target for acquisition:

(4) Menopause market is gaining significant traction:

  • Menopause market is becoming a new target for new femtech players — a $600 Billion dollar market by 2025.
  • Vira Health offers cognitive behavioral therapy, pelvic floor exercises, and diet changes closed $12 million.
  • Elektra Health offers evidence-based education, a supportive community & expert care from board-certified doctors.
  • Caria offers expert support, community, health tracking, and analytics to help women manage menopause.

(5) Connected femtech where wearable device meets software:

  • Femtech companies are using a “smart connected device” approach to offer women’s wellness solutions. 
  • Joylux, a menopause-focused company offers pelvic floor training devices to improve bladder control, sexual function, and vaginal dryness. Users can connect the device to an app for guided pelvic floor exercises.
  • Elvie offers wearable, in-bra electric breast pumps that connect an app to monitor real-time milk volume and pumping insights.
  • Perifit gamified pelvic floor training through a Kegel exercise device, mobile app, and interactive game.

(6) Rise of B2B-focused women’s health benefits:

  • Employers are adopting women's healthcare benefits to retain workforce talents. New players are entering the space by positioning themselves as health plan platforms.
  • Carrot Fertility helps organizations offer fertility benefits to employees, including egg and sperm freezing, IVF, donor and gestational carrier services, adoption, pregnancy, etc.
  • Ovia Health helps employers to integrate family health benefits for a diverse workforce, i.e. fertility and family building, maternity, women’s health, LGBTQ+ parents, and more.

(7) Women’s self-care apps are leveraging digital care management:

  • Menstruation apps are innovating beyond tracking period, ovulation, and PMS (premenstrual syndrome) health.
  • Flo Health offers AI chatbots to answer women’s health symptoms and provide personalized recommendations.
  • Grace Health offers medical expert support through chat features. The company has 3.7M app users and 4.7 user ratings on the Play store.

(8) Environmental-friendly women’s health products: 

  • New companies are creating eco-friendly, bio-degradable, and environmentally sustainable women’s wellness products.
  • Planera offers flushable period pads.
  • Pharmista Technologies is building eco-friendly pregnancy tests.
  • Lia offers flushable, biodegradable, and plastic-free pregnancy tests.
  • DivaCup, Lunette Cup, and The Flex Company create menstrual cups–reusable period products that reduce waste.

(9) Breaking the taboo of sexual health through sex tech:

  • Startups are closing the gender equality gap in sexual health by making intimacy more inclusive, non-discriminatory, and pleasurable to women, LGBTs, and minorities.
  • Lioness is a connected smart vibrator to help women optimize intimacy.
  • Vibease offers the longest distance remote control vibrator.
  • Maude is a D2C startup focusing on inclusive sexual wellness products for all types of bodies.
  • MysteryVibe embraces diversity in its sex toy offerings.

2. Market maps, players & competitors database

👉 View the database here

3. What problems do they solve?

(1) Severe shortage of medical professionals:

(2) Fertility treatment is expensive:

  • 1 in 5 women struggles with infertility. In the U.S., in vitro fertilization (IVF) costs $12,000 to $17,000 (excluding medication) and $25,000 with medication costs. Couples usually go through 3 to 6 treatments to conceive.
  • New femtech players strive to bring down the IVF costs through employee benefits (Carrot Fertility, Progyny), wearable devices (Ava Fertility), and a precision approach (OOVA).
  • Kindbody makes fertility care more affordable: $250 for a full fertility assessment; $6,000 per egg-freezing cycle.

(3) Lack of treatment for hormonal conditions:

  • Hormonal disorders can cause intense period cramps, heavy menstruation, cystic acne, infertility, obesity, diabetes, heart disease, and cancer in women.
  • For example, 20% to 70% of women of reproductive age have uterine fibroids; 6% to 12% of women have PCOS (Polycystic Ovary Syndrome); 10% of them have endometriosis
  • Feminade solves this with advanced hormone test kits, connects patients with holistic doctors and registered dietitians. Allara solves this by providing access to medical doctors, digital assessments, and prescriptions.

(4) Broken primary care model:

  • Conventional genealogical examinations are invasive (i.e. require physical exams and needle injections). Results often aren’t documented, stored, and shared digitally with patients.
  • New companies are making genealogical care non-invasive, safer, and hygienic.
  • Illumigyn uses remote gynecological screenings where women can be examined in the comfort of their homes by a trusted practitioner. DotLab offers at-home test kits to treat endometriosis. 

(5) Increased maternal death rate:

  • Lower-income countries have the highest maternal death rates. Whereas the U.S has the highest among other developed countries. In 2020, 861 women died during or within 42 days after they gave birth — not including post-childbirth complications.
  • New startups are saving mothers’ lives through preventative care. 
  • Oula provides full-service pregnancy care to reduce childbirth complications. Seven Starling tackles postpartum depression through online therapy. Poppy Seed Health offers on-demand 24/7 text access to doulas, midwives, and nurses.

(6) Severe inequalities and gender bias in medical research:

  • The medical industry favors male-only research and diagnosis — women were excluded from clinical research until 1993. Less than 2.5% of scientific research funding goes to women’s health.
  • As a result, women are diagnosed on average 4 years later than men for the same disease; are diagnosed 7 to 10 years later than men for heart disease, and suffered negative drug-related adverse reactions almost 2x more than men.
  • Biotech companies exist to dedicate R&D specifically to women’s health — making biology-specific diseases more treatable. Dot-Lab (diagnosis in endometriosis); GRAIL (early-cancer detection in women); KaNDy Therapeutics (non-hormonal therapy for menopause).

4. Business models & monetization:

(1) Full-stack digital health model:

  • Companies create integrated, end-to-end layers of (1) digital patient care using telehealth (2) medical networks (3) built-in tech stack to manage payment, appointment, storefront, revenue management (4) connection with other stakeholders in the ecosystem.
  • Most common in companies that offer all-in-one virtual clinics for women’s health. Example: Synora Health, Diana Health.
  • A full-stack model is able to generate multiple revenue streams because the startup has the tech capacity to roll out additional products. Without relying on intermediaries or third-party vendors, full-stack startups take all the profits and bypass commission fees.

(2) Direct-to-enterprise:

  • Companies help consumer-facing users access women’s healthcare for free by selling directly to employers and health plans in the form of sponsored healthcare.
  • This model typically employs a commission fee or charge organization for access to platform features.
  • Maven Clinic partners with Fortune 15 companies and payor-sponsored clinics. The company achieves a near 100% retention rate through its comprehensive approach: everything from fertility, pregnancy, mental health, pediatrics, and family care.
  • Carrot Fertility creates a suite of tools to help employers offer workers fertility benefits: Carrot Rx (telepharmacy), Carrot Pregnancy, Carrot at Home (a telehealth platform), and Carrot Card (employer-sponsored card).

(3) E-commerce/D2C

  • Direct-to-consumer (D2C) femtech brands employ an e-commerce model that offers consumer packaged goods (CPG), digital storefronts, curated or proprietary feminine products, and unique branding.
  • Common product categories include birth control pills, skincare, supplements, hygiene products, and sexual health test kits.
  • Example: Ease Healthcare, Aara Health, Favor, Womaness, Yoppie
  • This model allows businesses to own the platform, product innovation, customer engagement data, marketing, and revenue streams, and deliver an exceptional user experience to the end consumers.

(4) Content Subscription

  • Companies offer text, audio, video, or community-based content in the form of a subscription-based business model.
  • Types of paid content include: video courses, evidence-based content, teleconsultation with medical experts, online workshops, private support groups, accountability meetings, etc.
  • Example: Veera Health costs $880/year for PCOS reversal online program; Flo Premium costs $49.99 to access women’s self-care content from the mobile app; Proactive For Her costs $178 for vaginismus healing programs. Parla’s Endometriosis program costs £176 including 6-week live webinars and weekly check-ins.

5. The next big things

(1) The future of IVF (In Vitro Fertilization) is “needle-free”:

  • Conventional IVF treatment is invasive (hormone injection and daily blood draw), has intense side effects, and is risky (increases breast cancer and uterine cancer risks).
  • New Hope Fertility uses oral pills, vaginal suppositories, and nasal spray without any injection. New Hope has achieved a 58% conception success rate, 5653 successful cycles, and 15,000 newborn babies.
  • More femtech companies will introduce non-invasive IVF treatment to meet the demand of the millennial generations who’re inclined toward late pregnancy or for the rise of non-traditional families (i.e. LGBTQ+ parenthood or solo motherhood).

(2) D2C gynecological care:

  • Cervical cancer is one of the top five cancers for women, however, traditional gynecological care is inefficient. Patients are required in-personal visits for cervical examination, screening isn’t documented and additional procedures are required.
  • Illumigyn is a remote gynecological imaging platform where women can be examined in the comfort of their homes by a trusted practitioner. Illumigyn uses HD pap smears test, superior magnification for accurate diagnosis, digitally store medical information, and online follow-up consultation.
  • As cancer prevention awareness is on the rise, more “at-home gynecological examinations” that leverage the direct-to-consumer model and remote patient monitoring tech will pop up in this space.

(3) Rollup companies in femtech:

  • Rollups refer to the aggregation of smaller companies into larger company entities. The rollup model is already happening in the e-commerce space, where Thrasio is the fastest unicorn that uses this model. 
  • As the femtech acquisition is on the rise (Modern Fertility, Theramex, Fleur Marché)— more femtech companies will look to aggregate women-focused brands, expand product lines, increase the addressable market, and reach a wider customer base.
  • Platforms that look like “Thrasio for femtech brands” will emerge. They can start by buying out profitable (~$1M) third-party sellers on Amazon, offer expertise to scale the brands, provide clinical research, tech stack, integrated women’s health ecosystem, analytics, and marketing.

(4) Emerging trend — microbiome and women’s health:

  • Vaginal microbiome and pH levels have great implications on women’s reproductive health including infection, infertility, premature birth, and cervical cancer. However, this segment is poorly understood due to the lack of clinical research.
  • As the self-testing market is reaching $8.11 billion dollar by 2027, companies that offer “at-home microbiome test kits” will be well-positioned for the femtech space. 
  • Startups in this emerging space: Envy, Juno Bio. Users can order the test kit, perform vaginal swabs to collect cell samples, send the samples back to the labs, receive digital reports & consultations, and contribute anonymized results to further clinical studies on women’s health.

(5) More femtech solutions targeting the millennials and Gen Z:

  • Millennial women have increased demand for wellness in these areas: supplements, stress, mental health, and sleep. They spend 2 hours on average researching vitamin products, and actively seeking products that are more affordable, effective, and searchable.
  • As millennial consumers are driving $4.2 trillion in global wellness spend, femtech solutions that address the health concerns of this age group will thrive.
  • Product categories that attract younger women: Menstruation health (irregular periods, PMS, vaginal health, sexual health), Hormonal health (thyroid issues, estrogen dominance, skin issues), mental health (depression, anxiety & loneliness).

(6) OS for femtech virtual clinics:

  • The digital health market is driving the demand for “operational stacks”. We’re seeing companies that focus on provider tools to help virtual clinics build, run, manage and scale their health tech platforms.
  • Example: Medallion helps with ​​credentialing, licensing, and monitoring of provider networks. Quil is a care management platform to optimize patient care delivery. Mend increases efficiency and profitability by reducing missed appointments.
  • New solutions will look like a “plug-and-play tech stack” for virtual health clinics. Any telehealth company can leverage API, automation, and workflow–without building core features from scratch.

(7) Untapped market–chronic health conditions:

  • The cancer therapeutics market size is worth $553 billion by 2024. However, only 1 percent of existing femtech companies tackle chronic health conditions in women.
  • Potential segments to focus on: (1) prevention care: breast cancer, ovarian cancer, cervical cancer; (2) cancers affecting women disproportionately: lung cancer, heart disease; and (3) osteoporosis that could potentially lead to fractures, morbidity, and death.
  • New players can provide AI-based cancer assessment, genetic/DNA testing kits, remote cancer prevention screening, precision blood analysis, holistic cancer reversal programs, etc.