2019 was a record year for FemTech (female technology), a term generally applied to a category of software, diagnostics, products, and services that use technology to focus on women’s health.
FemTech does not refer to “male or unisex products that have been shrunk in size, painted pink and remarketed to women,” says attorney Ariella Dreyfuss, Partner at Barnea Jaffa Lande & Co. and a FemTech enthusiast. “FemTech is essentially a palatable term, a euphemism, to describe tech products and services in the field of female health: digital health apps, consumer health tech products and medical devices that address menstruation, menopause, fertility, breastfeeding, incontinence, contraception and female cancers.”
Historically, investment in the FemTech industry was lacking, mainly due to the lack of awareness and clear revenue models. According to Pitchbook data, in 2019 a record $563 million was invested in FemTech solutions – not just in digital health technologies, but also in technologies aimed at improving women’s wellbeing in general. The 2019 figure is up from $530 million in 2018; in 2014, the investments totaled $199 million.
Women entrepreneurs are behind the FemTech boom
“Undoubtedly, the acknowledgment that there was money to be made played a role” in the FemTech turning point, Dreyfuss says, especially the 2018 prediction by Frost & Sullivan that the FemTech market will hit the $50 billion mark by 2025, along with the recognition of women’s purchasing power and the “she-conomy”.
At the same time, as Dreyfuss points out, “increased public debate around the need for diversity throughout the corporate world, female empowerment and the LeanIn and MeToo movements stimulated attention, support and mentoring for female founders, who are typically, though not uniquely, the entrepreneurs behind FemTech, opening previously closed doors.”
She adds: “Finally, years of hard work by early FemTech founders bore fruits and publicity with their products reaching the market and high-profile investment rounds, which in turn spurred on a new wave of FemTech entrepreneurs, who saw what they could be and achieve”.
According to StartUp Health, women’s health startups raised $425 million globally in 2019, 35% more than in 2018, in 43 funding rounds – 79% more compared to the previous year. Roughly 40% of funding went to patient empowerment solutions, which give patients more control over their health – i.e. telemedicine services for women, or direct-to-consumer delivery of women health products, as well as various tracking apps and devices. According to another study, there are approximately 3,000 women’s health related app-based products globally, most of which are in the fields of fertility, pregnancy and early maternity, but do not provide an entire lifecycle support.
Increased interest in women’s health solutions in Israel
In Israel, there are 107 companies providing women-focused solutions (a number that hasn’t changed in two years). Out of this number, 75 companies are health related, including 36 in the digital health domain. The remaining women’s health related companies are either in medical devices or in pharma.
It’s important to note that one-third of all FemTech companies were founded by women, much higher than startups in general.
Roughly $89 million was invested in the Israeli FemTech segment in 2019, 2.5 times more than in 2018; however, total funding was dominated by investments in smartphone urinalysis company Healthy.io ($78 million, 88% of the total sector funding). Israeli startup Healty.io provides urine tests for pregnant women (FemTech); urinary tract infection tests for women (FemTech); but also an early detection solution for chronic kidney disease, which is designed for the general population. Similarly, AI-based cancer diagnostic system Ibex Medical Analytics, which recently raised $11 million in round A, does not serve women only. Therefore, it’s not obvious that investors invested in these companies solely for their FemTech solutions.
In addition to successful funding rounds, two new Israeli FemTech startups were founded in 2019: women’s safety app SafeUp, and holistic women’s health and wellness platform Hela Health – both founded by women.
Despite limited investment to date, there are first signs of increasing interest in Israel’s FemTech industry: the first FemTech hub Eve was founded in 2018; the first FemTech micro-fund is now being launched by Neome, a collaborative investing community for women; and last year, the Women’s Health Congress was launched and is being held the second time this year.