Investors waking up to growing femtech potential

There are tech startups focused on teens, tweens, millennials, baby boomers and just about every other market niche.

Dog lovers and cat fanciers? They’re covered, too.

And yet relatively few new companies are focused on women — surprisingly few, considering the fact that women are half the people on our planet and they wield the largest purchasing power in the world.

One large need in the women’s market that has been almost entirely ignored until now is technologies that focus on feminine health.

“Women represent as much as $20 trillion globally in annual consumer spending,” said Josh Makower, a general partner at New Enterprise Associates. “Yet so many healthcare needs of women remain unaddressed.”

Makower says that creating novel and effective solutions to these needs represents a huge opportunity for innovators and investors alike.

“And now, driven by this enlightenment as well as a wave of great female entrepreneurs, we’re finally seeing an acceleration of startups focused in the femtech area,” he said.

Femtech startups have raised more than $1.1 billion in total funding, according to CB Insights. They make everything from fertility tracking apps to innovative tampons.

NEA has invested in several femtech startups. It led a $22 million round in Nuelle, which makes Fiera, a device designed to “ignite arousal” in women. Looking a bit like a computer mouse, the $199 Fiera ($249 with a remote control) applies a combination of vibration and gentle suction that is intended to help women get in the mood and enjoy a more satisfying sexual experience.

“Women experience the same challenges with sexual arousal as men do, perhaps with even a greater prevalence and often coupled with changes in libido,” Makower said. “Yet men’s sexual needs are the only ones highlighted in the ubiquitous Cialis and Viagra ads. It seemed to us that women’s sexual concerns were ignored.”

NEA also led an $8 million round in ThirdLove, which makes bras that come in half-cup sizes, along with a smartphone app intended to render more accurate cup-size measurements. It also invested in Willow, a maker of Willow Pump, a “reimagined” breast pump with no cords or dangling bottles that fits easily inside a woman’s bra.

Makower, who is a physician as well as a VC, is founder and chief executive of ExploraMed, a medical-device incubator in Mountain View, California. Both Nuelle and Willow emerged from ExploraMed. Willow was developed by Makower and ExploraMed project architect John Chang.

“When John and I sat down to think about what our next company in ExploraMed should be, we decided to do something for moms and babies,” Makower said.

“As we began to do our need-finding, all we heard was how bad the existing pumps were. We quickly learned that while breast-feeding has almost magical benefits for moms and babies, many women stop early because of the challenges. So we developed a vision that women need a mobile, quiet, easy-to-clean, discreet solution.”

The fact that two men were sitting down to found a startup that makes breast pumps for women may reflect the fact that there are so few women VCs and that so little investment is directed to women entrepreneurs.

Makower laments the challenges this situation poses.

“Most of the investment community is male, and many cannot appreciate women’s needs,” he said. “I’m proud of the investors who joined us in funding these companies, but we faced a lot of rejection.”

He adds that the VC community still considers many of these products taboo.

“Many VCs were afraid of what their limited partners might think,” he said. “These concerns not only came from men, but also from women not wanting to support these projects and face humiliation by their male peers.

“In sum, we still have a long way to go on this front, but I am confident that once we start delivering some real liquidity and success, much of this will fade away and we’ll finally open up the space for greater innovation and investment.”

Makower said Nuelle’s promotional challenges, so far, have been beyond any he might have imagined.

Facebook and Google blocked the company from using their marketing tools, lumping the Fiera product in the category of sex toys. But Makower is hopeful that resistance to femtech will fade.

At CES 2017 Willow received an overwhelmingly positive response, winning seven awards at the show. He expects Willow and Nuelle to exit via M&A to large healthcare/consumer-products companies that sell products to women.

Nisha Dua, partner, BBG Ventures. Photo courtesy of the firm.

Nisha Dua, a partner at BBG Ventures, also says femtech’s moment has arrived.

Given women’s enormous spending power, investors are waking up to the potential of startups that target women’s health.

“Women are dominant consumers across multiple categories and they drive huge markets,” Dua said. “As VC investors, we’re looking for big opportunities and women drive big opportunities because there are certain products they use on a daily or monthly basis.”

Such as tampons, for example. That is why BBG is an investor in Lola, a startup that sells organic cotton tampons and liners via online subscription and has raised $11.2 million in funding.

Dua notes that women use such products every single month for at least 30 years of their lives. And yet the tampon has seen very little innovation over the years. Now it’s a focus because more women have become entrepreneurs and they’re solving problems they’re familiar with, such as with tampons and other women’s health products.

“We still need to fund more female entrepreneurs, but investors are sitting up and taking greater notice,” Dua said. “And you have investors looking for big new markets that haven’t been addressed yet, and tampons are a perfect example of that.”

The tampon market is forecast to reach $6.2 billion worldwide by 2020, according to research firm Global Industry Analysts.

Lola follows a subscription model, similar to Dollar Shave Club, delivering tampons in the mail. The company was founded by two women, Alex Friedman and Jordana Kier. Their pitch to customers is convenience, plus the fact that although the major-market tampons all use some percentage of artificial fibers, almost no research has been conducted on the health effects of those fibers.

Lola competitors include Flex Co, which makes a tampon alternative users can wear during sex. It recently raised a $3 million seed round led by Vivek Ranadive’s new fund, Better Our World Capital.

Another startup in the space is Thinx, which makes underwear for women having their period. Its reusable underwear holds up to two tampons.

“This is an industry dominated by a few big players, and it’s a market ripe for change,” Dua said. “Lola’s two founders had an exceptional vision and they’ve been able to connect emotionally with consumers.”

No crop of startups these days would be complete without big-data plays, and femtech has these as well.

One is Clue, a period tracker and fertility app. It recently closed a $20 million Series B round led by Nokia Growth Partners and existing investors Union Square Ventures and Mosaic Ventures. Clue applies machine learning to data on the female cycle and gives users a way to predict their periods, fertile windows and premenstrual syndrome.

Other fertility apps include Natural Cycles, which raised $6 million Series A funding round led by Bonnier Media Growth; and Glow, which raised a total of $23 million from Formation 8, Founder’s Fund and Andreessen Horowitz.

“The Clue product is not a pink frilly thing,” said Mosaic Partner Simon Levene, who now sits on the Clue board. “It’s designed as a powerful utility that helps women collect and store their data for themselves and also to share with their loved ones and medical professionals. The founder of Clue is a woman, and in this space you want to back women who understand their own needs.”

Dua from BBG said she’s glad to see VC opinions evolving this way.

“Yes, venture is made up of traditionally male investors who don’t like to invest in what they don’t understand,” she said. “It’s hard for them to have a deep dive and an honest conversation about a company focused on menstruation. But that’s changing dramatically.”

Tom Stein is a Palo Alto, California-based contributor. He can be reached at

Photo of a female programmer surrounded by code courtesy of Cecilie_Arcurs/iStock/Getty Images.