In the past, medical research has paid far too little attention to women’s health. For a long time, women were not admitted to medical studies, with the result that drugs were developed regardless of women’s particular needs. This situation was and is unacceptable, particularly regarding the avoidance of possible side effects and ensuring the effectiveness of medicines and applications for women.
Nevertheless, even today
there often remains a lack of relevant data for specific topics relating to women’s health, as well as the necessary funding to improve this data situation through targeted research.
The difficulties in raising sufficient capital can also be recognised for start-ups that focus specifically on the development of digital services for women’s health issues. In the venture capital context, such young companies are categorised as ‘Femtech’.
Difficulties within the financing environment for women and women’s issues
Statistically, women spend considerably more money on their health than men, use digital health applications more frequently, go to the doctor more often and attend more preventive medical check-ups. It therefore follows that investments in this area have real growth potential and should be correspondingly attractive to investors. So how can the difficulties in attracting venture capital be explained? The reasons for this are complex.
The lack of women in management positions at venture capital investors is often identified as a key factor. According to European Women in VC only 16% of general partners in venture capital companies were women in 2023, an increase of just one per cent on the previous year. Men, the people who consequently make most investment decisions, are assumed to be less interested in services and products that they see as primarily relevant to women or simply lack an understanding of problems and needs that do not affect them, which ultimately influences their investment decisions. In addition, Femtech companies are predominantly established by women. Although an unconscious bias of male investors towards women has not been proven, it is often cited in a similar way in the context of women not being promoted as a possible reason for women being disadvantaged compared to men. This is also referred to as a gender bias, which in this case could lead to men preferring to invest in male-dominated start-up teams. The statistics cannot rebut this assumption: While women in Germany were involved in an average of 19% of start-ups of growth companies from 2017 to 2021, according to an evaluation by KfW on ‘Female Entrepreneurship’, all-female-led start-ups accounted for only 2% of the total deal volume in Germany in 2021. Even mixed teams only accounted for a share of 7%.
Another problem could be the inadequate data situation mentioned above. For investors, comprehensive data is often a decisive requirement for making an investment. If there is a lack of convincing research, for example to investigate the effectiveness of certain digital therapy methods for women, this could deter investors from investing in the future. To break this cycle, a funding push is needed for issues that specifically concern women’s health.
Breaking taboos - a promising future for Femtech
Despite the existing problems, the Femtech sector is predicted to have a promising future. The difficulties mentioned above have long since found their way to the forefront of public consciousness. Women are rightly demanding that their needs be considered in all areas of society. Together with the growing importance of the personalised digital health market in recent years, considerable growth is expected for companies dedicated to women’s issues. Even today, there are already successful start-ups in this area, such as Maven Clinic and Kindbody, which have even achieved unicorn status (i.e., a company valuation of over USD 1 billion).
Women’s health is increasingly becoming the focus of political attention. The current US government, for example, recently launched the Women’s Health Research Initiative, which focuses on improving women’s health research. The fact that politicians have recognised the potential of this area is not surprising given the breaking of taboos surrounding women’s health such as menstruation and the menopause. It is to be expected that investors will also pick up on the social mood and recognise the enormous potential offered by the Femtech sector.
