Statistics suggest that there has been a recent drop in the overall number of startup founders. What’s behind? We will explore the trend by plunging into data concerning the challenges of financing and evaluation, and by examining certain achievements specific to the industry and the success of the founders.
The femtech market and the tumultuous years from the boom of 2020 startups
In 2023, women explained 13.2% of the founders of newly incorporated startups – down 15.1% in 2022 and apparently the lowest percentage of startup founders in recent years.
This downward trend has permeated many sectors in which founders have traditionally been active, such as education, consumers, pharmaceutics and biotechnology and software as a service. Not all sectors are plagued by this same decline, because Healthtech and medical devices have increased in the participation on the part of the founders over this same period of time.
An explanation of the disproportionate increase in women in the health and medical devices could be attributed to the rise of “femtech” as an industry objective.
A niche industry focusing on women’s health problems, Femtech Includes maternal and menstrual health, fertility, contraception and menopause, among other conditions which only affect women. In recent years, the number of startups created to meet the specific needs of this market has cultivated – Between 2013 and 2023, the sector experienced a 1000% increase in the number of companies in space.
Some argue that we are in the middle of a “female revolution”, projecting the market value of the world industry in Femtech to exceed $ 103 billion by 2030, while Others are more cautious. The sector grows, but some see it as modest.
Although there was a proliferation of startups, the collection of funds in this sector has remained disproportionate. Societal taboos and the so-called “Ick” factor probably contribute to the hesitation shown by male venture capital, creating an extremely unexploited and sub-finance market.
In 2023, only 1.4% of total capital investment went to femtech. Even more amazing, until 2023Femtech startups founded by all men have collected more money per year than femtech startups founded by all women (although they are fewer).
And fundraising? Do companies led by women receive the capital necessary to grow?
In 2018, Boston Consulting Group, in partnership with Masschallenge, published a study noting that female startups received, on average, Less than half of the investment In men -based startups – but has performed even better over time, generating 10% more in overall income and a higher return on investment per dollar.
A year later, BCG published another study noting that investment in women entrepreneurs at the same level as male entrepreneurs could stimulate world GDP From around 3% to 6%, adding 2.5 to 5 billions of dollars to the world economy.
Despite these results, the support of venture capital for startups based on women has remained quite stagnated in the past 16 years. In the first half of 2024, startups founded by women received Only 2.2% of the capital Invested in all startups supported by a company in the United States, according to Pitchbook. Since 2008, the average annual percentage has oscillated around this amount, culminating at 2.8% in 2009. Although subject to more volatility from year to year, female / male co-founded startups have completed better in terms Invested amount, representing 14.8% of the total capital invested in the first half of 2024.
The rise of female investors, and what it means
Contrary to what seems to be a narrowed number upward.
And research has shown that venture capital funds with at least one female partner are several times more likely to invest in female startups than fully male funds.
Exploiting the resources of women’s investors and the knowledge of the founding women of the Femtech industry will help solve a multitude of problems in women’s health care, obstacles to access to discrimination and false declarations in medical research.
While female investors remain a minority group, the growth of female representation on the side of investors suggests that there could be an increase in the demand of those who lead research and execution agreements for startups led by women, or startups attacking problems that have disproportionate effects on women.
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