Rise in Women’s Health Funding
The level of institutional capital raised by digital health companies focused exclusively on women’s health has steadily increased since 2011, when Rock Health first began tracking digital health funding. In fact, while no companies that were focused on women’s health raised greater than $2 million in 2011, nine have already raised a total of $82 million through the third quarter of 2015—a considerable jump from the $29 million raised by women’s health companies in 2014. The largest round went to Progyny, which secured $34 million in a Series C from Kleiner Perkins Caufield & Byers, TPG Biotech, SR One and Merck Serono Ventures.
Concurrent with the entrance of big-name US investors into the women’s health scene, investments have grown internationally. With its unique product design, inclusion of physician-reviewed informational content, and smart algorithms, Berlin-based Clue has raised $10 million since its founding in 2013—becoming the fertility tool of choice for over a million women across 180 countries. Browsing the Apple App Store further supports a rise in women’s health tools: a search for “fertility tracker” alone yields over 140 results. This influx of women’s health apps likely triggered Apple’s most recent update to HealthKit, which now allows women to track their reproductive health data and provision access to apps such as Clue.
Drivers of Funding Growth
Women are not being fulfilled by existing technologies.
The increased attention that entrepreneurs and investors are paying to women’s health can be linked to the large market opportunity when targeting a highly engaged healthcare consumer group with significant unmet needs. Women make 80% of healthcare decisions for their families and shoulder most healthcare-related responsibilities such as researching information, selecting insurance plans and providers, and determining which treatments options to follow. As a result of this “Chief Medical Officer” role, women are also higher utilizers of healthcare services. In 2012, physician office visits per 100 persons reached 342 amongst women versus 258 visits amongst men. CMS has also reported that per capita healthcare spending for working-age females is 29% higher than male per capita spending, and females between the ages of 19 and 44 spend 70% more per capita compared to males in the same age group—largely driven by costs associated with maternity care.
The proactive role moms play in healthcare is further corroborated by our recent consumer adoption report, which showed that women between the ages of 35 and 55, compared to women in other age groups, scored high on the “consumer index.” The consumer index is defined by responses to attitudinal questions around willingness to pay out-of-pocket for healthcare expenses and feeling responsible for and actively taking care of one’s own health.
Despite adopting a take-charge approach towards their own and their family’s healthcare, women who then seek out actionable health information, diagnostic tests, and treatments are often frustrated due to the complexities of the current healthcare system and the wealth of information, yet lack of seemingly trustworthy resources and products that cater to their specific healthcare needs. To address these gaps, entrepreneurs have increasingly leveraged digital technologies to offer decision support tools and personalized products to help women predict and prevent healthcare conditions and complications. The eagerness many women have to openly discuss their healthcare challenges and willingness to problem-solve alongside industry players make them an even more attractive consumer target.
Women are really motivated to provide feedback and are open to talking about their frustrations. I am overwhelmed by the number of women who reach out to me, unsolicited, wanting to test our products.
Demand-side factors have been key to accelerating women’s health investments, but supply-side trends cannot be ignored. Given the significant role that an entrepreneur’s personal journey and first-hand experiences of pain points play in startup ideation, it is no surprise that many female entrepreneurs are passionate about addressing women’s issues. In fact, over a quarter of funded women’s health companies have female CEOs, compared to only 7% of all digital health companies funded since 2011.
Pathways for Entrepreneurs
Developing breast cancer diagnostics, predictive analytics tools for fertility, or prenatal monitoring systems requires engaging a unique consumer group with specific healthcare needs. Still, the challenges faced by women’s health entrepreneurs are not dissimilar to those faced by other entrepreneurs in digital health. Just like other digital health entrepreneurs, entrepreneurs addressing women’s health issues are required to navigate the regulatory landscape, craft their story, fundraise, develop strong payer and provider value propositions, as well as develop a deep understanding of consumer preferences (in the case of women, this may be building a strong sense of trust and community). Similarly, women’s health entrepreneurs need to not only capitalize on macro trends, such as the growth of personalized medicine and healthcare consumerization, but also develop differentiated products and business models in order to deliver superior value to the buyer and end-user.
We have a foothold in maternity and will continue to offer decision support tools that help healthcare payers better connect with and support mothers and their families.
Perhaps most encouraging for digital health entrepreneurs is the availability of multiple pathways to address women’s health issues. Some companies, such as Glow and Wildflower Health, choose to focus on the “she-conomy” and build out their product lines to support women through the stages of their lives, from fertility and birth control to maternal and postnatal care. Entrepreneurs also have the opportunity to consider women’s health as an entry point rather than the be-all and end-all of their businesses. For example, Cyrcadia Health, which sells its wearable technology for breast wellness screening, is excited about the potential to expand outside its core demographic and develop technologies to diagnose other types of cancers. Additionally, more and more digital health companies are investing in building women’s health verticals within their existing organizations. Cue tracks a molecular-level fertility indicator in addition to testosterone and inflammation levels, while Doctor on Demand offers video visits with Board-Certified Lactation Consultants. It is too early to definitively evaluate the merits of each of these pathways, but as women’s health continues to account for a growing proportion of total digital health funding, one thing is certain: digital health entrepreneurs addressing women’s health have much to look forward to.