UK-based startups accounted for 36% of Europe’s total femtech funding in 2023. Despite this seemingly positive statistic, there are only 15 VC-backed femtech startups in the UK – which is all the more surprising when you consider the sector is serving almost four billion women globally, and women are 75% more likely to use digital tools for healthcare than men.
So, why are UK femtechs finding it so hard to get investment? We took a deep dive into the UK market.
Investors still ‘fundamentally uncomfortable’
Valentina Milanova, founder of gynaecological health company Daye, believes most investors feel “fundamentally uncomfortable with the topic.”
“When I walk into a room and start talking about the vaginal canal and menstrual bleed, most male investors blush or look to the ground,” Milanova tells UKTN.
“Other investors see femtech as an impact investment space, which fails to account for the fact that over 80% of healthcare decisions are made by women and solving gynaecological health issues is a meaningful way to generate revenues and shareholder value, given the pervasiveness of under-addressed gynae health concerns.”
This is an experience shared by Kalila Bolton and Holly Jackson, co-founders at women’s sexual wellness platform SheSpot. Jackson says that for her startup’s £275,000 seed round, which closed in December, the nature of the space was too uncomfortable to engage with for some of the investors they reached out to.
A reluctance to engage in discussing femtech was further demonstrated by the multiple investors who declined to talk to UKTN for this story.
However, Jackson adds that many angels instantly understood and shared SheSpot’s mission, opening up the conversation and further investor appetite. The round was closed with a diverse group of angels on the cap table – many of whom were new to femtech.
“There are a number of factors at play impacting the funding gap, but I think they’re all underpinned by residual stigma and taboo around women’s health – especially when it comes to sexual health and wellness,” adds Bolton.
Femtech still considered ‘niche’
It’s difficult to comprehend that in 2024, UK startups focusing on women’s health and sexual wellness could be viewed as taboo. However, poor understanding of the space is leading to misconceptions about the industry, according to those living and breathing it.
“Some of our fellow femtech brands have experienced rejections from investors on the basis that the space is oversaturated, or that the industry is too much of a ‘niche’,” says Bolton.
“This reflects the challenges many investors have in differentiating between the different femtech solutions – which in reality have vastly different use cases and customer segments with enormous potential.”
This is an experience shared by Jo Goodall, co-founder of teen wellness and health app Luna. She says there is still some belief that investing in products and services just for women is too niche and that the return is too low for a fund – which adds to the endless cycle of femtechs not having the support to reach their full potential.
“[Low investment figures] is likely something to do with the fact that investing is heavily skewed towards men, and the “comfort bias” of investing in what you know or have experience in means that these investors don’t see the huge opportunity,” says Goodall.
“We raised £600,000 in May 2022 and are wrapping up a £850,000 round now – people are realising that what we are tackling is a global issue and is affecting teenagers across the world.”
‘Change across the board’ needed
What is the answer to a challenging investment environment for the UK’s femtechs? Heather Delaney, managing and founder of global communications consultancy Gallium Ventures and counsel to female health app Flo Health, believes more needs to be done across the whole sector.
“There needs to be change across the board, getting proper representation for women in VC C-suites to directly reflect the consumer market, and educating male-dominated VC boards about the values and opportunities of female-focused industries,” says Delaney.
“At a government level, there needs to be a focus on better understanding women’s healthcare issues, and the media [needs to be shown] how and why femtech products are genuinely of interest to their audiences.”
Delaney says femtech founders and funding are on opposite lanes of a two-way street and to make it work, they need to meet along the way.
“From the startup perspective, there are steps femtech entrepreneurs should take to attract investment – and that is banging down doors,” says Delaney. “They shouldn’t wait until it’s perfect to take their shot. Try, fail, get feedback, learn, try again.
“VCs, on the other hand, need to look at the cold hard facts and understand that this is not a niche market – this is an area of business ripe for the picking.”
When done right, Delaney says this can be a win-win-win situation: consumers have a wider variety of choices, founders can bring their ideas to life and grow their business, and investors increase their returns, unlocking untapped potential on the market.
Read more: Money talks in business. For women’s health, not everyone is listening
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