Women's health tech attracts investment opportunities

• Start-ups, such as Clairity, which focuses on breast cancer imaging, are targeting women's health concerns.
• The amount of Venture Capital funding for Femtech increased by three times in the past five years, reaching $1.9 billion in 2021.
• Firms focused on gynecology, fertility and maternity have garnered the largest funding
• Women's health tech is being sought by large employers to close the health spending gap between male and female workers.

Developing personalized medical care for Dr. Connie Lehman is like deciphering clues from a breast cancer scan.

Dr. Lehman, the chief diagnostic radiologist and director of breast imaging at Boston's Mass General Hospital, explained how digital images of a woman's breast tissue contain a wealth of information that deep learning technology can extract and use to predict the future in ways we haven't been able to before.

Dr. Lehman has created a program using artificial intelligence and breast scans to provide a more precise evaluation of a woman's individual risk of developing breast cancer, beyond conventional biomarkers and risk assessment models, which she claims exclude many women.

Our patients of color have been neglected in healthcare due to risk models that were constructed based on European Caucasian women.

She attracted investors and launched her own company, Clairity, with the help of Texas-based Santé Ventures.

Carrie Ivers, CEO of Clairity, stated that women make up a significant portion of the population and have a significant impact on healthcare spending. She expressed excitement about partnering with a company focused on women's health, as this area has considerable potential for growth.

Femtech investment growth

Since 2015, the amount of venture capital funding for Femtech, which focuses on women's health conditions, has tripled from approximately $600 million to nearly $1.9 billion last year, according to Pitchbook data.

Despite the fact that women's health is a critical area of concern, the overall investment in it remains inadequate. A McKinsey report revealed that only 1% of pharmaceutical research funding was allocated to female health conditions beyond breast cancer in 2020. Similarly, only 2% of medical tech funding was dedicated to non-cancer-related women's health conditions.

Last year, two significant Femtech deals were made in maternity-oriented start-ups. In May, Modern Fertility was acquired by Ro, a male-focused digital health platform, in a reportedly valued deal of $225 million. In August, Maven Clinic, a virtual maternity and women's health service firm, raised over $100 million from investors, including Oprah Winfrey, in a deal that valued the company at over $1 billion.

Femtech for driving health equity

Femtech funding expansion is being driven by large employers adopting services focused on maternal and family health, according to Deena Shakir, a Maven investor and board member.

According to Shakir, a partner at Lux Capital, providing prenatal, maternal, and pediatric care is not just a nice-to-have but a necessity for retaining women in the workforce. Employer budgets for these services are therefore becoming increasingly large.

The U.S. Department of Labor reports that women of child-bearing age incur health expenses that are 80% higher than men. Employers have a financial stake in reducing the health disparity for their female employees, as they bear a significant portion of the associated costs.

Samantha Purciello, a senior associate at Mercer, stated that there has been a significant increase in the past five years of offering family-friendly benefits that extend beyond fertility services. She believes that this is due in part to organizations prioritizing diversity, equity, and inclusion initiatives.

The majority of Femtech companies addressing health issues are led by women, according to Clairity's Lehmann. She explains that these companies tend to have more equitable healthcare approaches and invest in domains that benefit both men and women.

The next challenge for Clairity is to obtain FDA approval for its breast cancer screening program, which the company has already submitted its application for and hopes to achieve later this year.