Nana Ewusi-Emmim had always planned to breastfeed her children because, after all, breast is best. But within a few weeks of the birth of her first child, she took her son to the hospital to determine why he was crying incessantly.
“They basically told me I’d starved him,” Ewusi-Emmim says. She hadn’t intended to, but she wasn’t producing enough breastmilk. Hospital staff told her she’d have to use formula.
But Ewusi-Emmim wanted a different answer. At the time, she was working on her MBA at the University of Utah and decided to sign up for a class on starting new ventures. Her homework required her to speak with pediatricians and other specialists to get a sense of the market.
“It was almost like everyone wanted something better,” she says, “but they were waiting for the big companies to come up with it.”
Big companies, according to founders in an emerging business sector colloquially known as FemTech—that is, technology companies that cater to women’s needs—have long neglected the unique interests of slightly more than half of the world’s population. The absence of products that solve uniquely feminine problems has led to the emergence of a whole new industry in recent years, with dozens of new companies emerging in Utah alone.
There’s just one problem, say these founders: the business of venture capital remains predominantly male. Many investors often fail to see the potential of women-specific businesses, most of which are tied to a single product that may lack the ability to scale up to a larger audience.
But some newcomers to the space have a different perspective. It’s not just that investors lack experience with women’s needs, they say. The founders behind FemTech companies often lack previous business experience themselves, and that may make it difficult for these emerging entrepreneurs to understand what today’s venture capitalists are seeking.
“A lot of FemTech starts with a good idea, but it has a tight, tight application,” says Steven Hane, CEO at Prima-Temp, maker of the Kindara fertility app. “Investors are going to say, if it’s a tight application, I have to exit fairly quickly.”
Feminine revolution
At the time of her trip to the hospital, Ewusi-Emmim says, there were essentially two products on the market designed to increase breast milk production. Both devices were similar in form and function—they attached to a woman’s breast and stimulated the production of additional milk. But neither were particularly comfortable, nor convenient, for a woman to use.
“I did try them,” Ewusi-Emmim says, “but it’s too bulky and messy. It’s basically useless. We buy [these products] because we’re desperate.”
So Ewusi-Emmim set out to create her own support device, redesigned to simplify the technology and make it more comfortable to wear.
Ewusi-Emmim’s story is typical among FemTech founders, many of whom were working in other fields when they encountered a problem, and discovered that other entrepreneurs have put very little effort into solving it.
“When Thinx launched in 2014, there had been no innovation in the period solutions space since 1937; the most recent since that was the menstrual cup, and even that only recently went more mainstream,” says Maria Molland, CEO at Thinx. “Since 1937, someone has invented computers, lasers, iPhones, and video games, but no innovation for half of the world’s population that menstruates every month.”
This has changed dramatically in the past five years, says Tracy Warren, a general partner at Astarte Ventures, a venture fund focused on FemTech.
“We’ve seen a real explosion of startups in the space,” Warren says, driven in part by “a pent up need and demand for products, and a very significant market opportunity.”
Fighting for funding
Yet, there is still a significant gap between the number of promising FemTech ventures, and the availability of capital for such companies. Banking and venture capital are even more skewed than entrepreneurship toward one side of the gender spectrum, and that can make things difficult for FemTech founders looking for funding, Warren says.
“I think, not to be crass, that a lot of the money is tied up in the hands of people who can’t relate to women’s issues,” Warren says. “Who is going to champion a deal in better breast pumps, or vaginal dryness?”
The answer, Warren believes, is women—an idea that led her and her cofounder to launch Astarte Ventures before the term FemTech was even coined. With more female leadership in venture capital, more women-oriented businesses will get funded. In time, the success of those first companies will draw investment to similar startups.
“It’s kind of complicated,” she says. “You need success to bring in capital, and to get capital you need success. It becomes a chicken and egg thing.”
Success has also come to FemTech through alternative means. Thinx, Molland says, initially used crowdfunding to produce its first pairs of period-absorbing, leak-proof underwear. “Traditional venture capital funds, largely led by men who didn’t understand our product or market for it, made raising money difficult,” she says. Over time, the crowdfunding campaigns lent credibility to the Thinx product and brand, which opened up larger funding opportunities.
Locally, Ewusi-Emmim has pursued a similar approach. After attempting to pitch her new design to the two companies already producing lactation support devices, she founded her own company, NipaYe, and launched a crowdfunding campaign in hope that would-be customers will see value where investors do not.
Venture capital may not be the best solution for FemTech, says Ewusi-Emmim, who sees investors as having different goals in mind than female inventors like herself. “This product I am working on, in terms of the tech aspects of it, it’s very simple. I just want to help mothers. I’m not trying to be a millionaire,” she says. VCs, on the other hand, “want a product that will make them big money.
“I feel like mothers, when we come out with a product, most times it’s pretty basic, even though it’s going to make a big improvement.”
Breaking down barriers
Molland, CEO at Thinx, believes women are increasingly shunning traditional venture-backed, mass-market products in favor of products made for women, by women, which are often viewed as more trustworthy.
This same desire for empowerment drew Kathleen Bailey―who had recently gone through a career relaunch program―to SHERO, a local startup that happened to be looking for a new CEO who could take the company’s biodegradable menstrual pads to market.
“The company started when an NGO in Guatemala contacted a University of Utah professor to try to develop this kind of product for the women they serve,” Bailey says. The company had a strong empowerment element to it, “with the ultimate goal of providing this to women everywhere.”
Bailey believes there is a broad market for SHERO’s products here at home, as well as abroad, because of the company’s values and the fact that it is led by women. “Millennials, including millennial women, are really interested in products that match their values, and as values shift toward more sustainable solutions, that can drive innovation in particular products that really haven’t seen a need to change in the past.”
SHERO hasn’t pursued venture capital but has won a handful of pitch competitions. For the most part, Bailey says she hasn’t got the sense that the feminine nature of their product has turned off investors.
“There was one time when our team traveled out of state to one of these pitches and was told that this wasn’t the kind of product that this particular judge was comfortable hearing about, but that was actually a woman,” Bailey says. According to her, FemTech is “just not going to resonate with every female, and it’s not the case that men are just plain uncomfortable with it.”
Warren believes this dynamic is key to driving the expansion of FemTech. It’s not a taboo that has prevented innovation in women’s products—solutions for erectile dysfunction have been openly advertised and funded for decades. The central issue, she says, is societal ideas about the potential of women.
“What was long perceived as the norm, is that a lot of things that women suffer… are just part of being a woman,” she says. “It was long dismissed as not a health issue. You get older, you leak. You have cramps… Why would women not enjoy sex after 40? No male would stand for that.”
But to garner funding in the current market, Warren says, FemTech founders will have to find a way to make their stories relatable among men as well.
Reimagining women’s issues
All three cofounders of PreOv, a Utah-based fertility tracker, “waited a little longer to have kids,” says Jeanna Ryan, one of the trio. Ryan and her husband had hoped to have a baby before Ryan’s planned return to school, but nature, as it happened, didn’t have it in the cards.
In an attempt to plan their pregnancy, Ryan tried a myriad of trackers and other fertility products. “It was so much work to get pregnant,” she says. “You have to wake up every morning and check your temperature before you get out of bed… If you’re busy and in a career or even if you’re busy with other kids you’re tending to, nobody has time for this.”
But Ryan was also surprised at the extent to which the episode, and the struggle to get pregnant, impacted her husband and her marriage. Ryan was able to become pregnant with the help of the trackers, but the pregnancy ended in a miscarriage. The grief—and the realization that she and her husband were going to have to do all that work yet again—spurred her to create PreOv alongside three other friends whose families had also struggled with fertility.
“For us, losing the baby was tough,” Ryan says. “I’m Buddhist, and my husband is Catholic, so we have very different upbringings. We just approached it very differently. We were very supportive of each other and our different beliefs, but it was just hard.”
Doubts constantly ran through her mind, Ryan says. Did she do something that caused them to lose the baby? Did her husband secretly think it was her fault? Later, she learned her experience was not unique when she happened upon a research study that found infertility caused stress tantamount to a couple going through a divorce.
Ryan believes PreOv’s focus on making fertility a joint effort, rather than a women’s issue, will help it compete with other products on the market. “Right now a lot of products require the woman to do all the work,” Ryan says, “but we’re hoping to support the couple.”
Profit pains
Women entrepreneurs, Hane believes, have mastered the art of telling a good story and understanding their audience. “They’re thought leaders, opinion leaders,” he says. But there’s a second leg required to land a pitch for capital—you need a believable go-to-market plan. This can be where some FemTech struggles.
“The issue is, it’s not hard to get anybody to look at a pitch and say, yeah, a lot of people could use it,” Hane says. “I’ve heard that one—that it’s only half the population. But I say, that did okay for Viagra.”
The challenge for most FemTech ventures, Hane says, is reaching relevant customers, especially in the face of rising acquisition costs. “When you look at the role of CEO, whether it’s a man or a woman, you have to break into parts the public-facing side, and the execution side,” he says. “The thing I look at is, where does the balance sit? With FemTech, the public-facing is so energized that you can get out of kilter around ‘isn’t this great’ and the scale can tilt away from ‘yeah but we still have to execute.’”
“Investors want to make money,” Warren agrees. “It’s not emotional, it’s financial.” And while companies across all categories struggle in this respect, “there are a lot of categories within FemTech, and a lack of understanding of that market segmentation and the ability to show a way to get to profitability on a reasonable amount of capital. If FemTech companies can’t meet that standard, they’re not a good investment.”
Besides a rock-solid business model, Hane says, investors today are looking for scale. Not just products sold, but the potential to adapt to markets and build something on the scale of Facebook or Google. The value of Prima-Temp’s Kindara, with its ability to predict fertility, was immediately apparent, Hane says. But what really got him going about the company was the potential beyond the initial product launch.
“We have this unique position to continuously gather body temperature information,” he says. “What else can you do with it? Chemo research.” Insomnia, weight, and metabolism management.
Kindara, Hane says, is not a product, it’s a “women’s digital health platform.” Bailey similarly envisions Shero moving beyond menstrual pads and expanding into more sustainability-themed products that build on the company’s proprietary biodegradable materials. If FemTech is going to solve its funding problem, Hane believes the solution is in thinking much bigger—something he believes women are already adept at doing.
“Women don’t want to buy medicine,” he says. “Women want to buy health.”