The First FemTech Unicorn
Flo Health, a fertility tracking app based in the UK, has recently raised USD 200 million in a Series C funding round, pushing its valuation to over USD 1 billion and achieving unicorn status. Flo Health is notable for its substantial user base, including around 70 million monthly active users and 5 million paid subscribers (read more on Techcrunch).
This round demonstrates the significant monetizable potential of direct-to-consumer women’s health products in Europe, providing a crucial and optimistic signal to the funding landscape. It’s a much-needed indication that there is substantial opportunity and profitability in this sector, underscoring the urgent need for more capital to flow into these vital women’s health initiatives.
While the company’s funding success is noteworthy, it has sparked significant discussion due to its all-male founding team, bringing to light deeper systemic issues within the venture capital and startup ecosystems.
“The funding values the startup at more than $1 billion post-money, which, per the company, makes it the first “purely digital” women’s health app to become a unicorn. That distinction is challenging to qualify, since it seems that there are no clear “purely digital” unicorns in the women’s health category for comparison.” (Fertility tracking app Flo Health raises $200M at a $1B+ valuation)
Even in FemTech it Pays to be a Man
Despite the femtech sector being highly female-dominated, male-founded femtech startups have historically raised significantly more capital than those founded by women. In the past five years, male femtech founders raised more money annually than their female counterparts, even though over 70% of femtech companies are founded by women (read more on Sifted).
“When raising capital and talking to VC investors, femtech founders unfortunately still get more attention when they are focused on subjects that male investors can connect to, according to Mauro. If their daughter was diagnosed with endometriosis or someone in their family had breast cancer, they are usually more likely to listen.” (Even in Femtech it still pays to be a male founder)
Behind the Controversy Online
The controversy around Flo Health exemplifies the biases that exist in the venture capital industry. Studies consistently show that diverse teams outperform homogeneous ones, yet the investment landscape remains skewed towards a narrow demographic. The lack of diversity at the top levels of venture capital firms, particularly among key decision-makers like the Investment Committee, is a significant driver of these issues. The majority of investment committees are still set up very homogeneously, which perpetuates existing biases and hinders the progress toward a more inclusive funding environment.
About Fund F
Fund F is the European Venture Fund that backs gender-diverse founder teams. They are a pan European early stage investor with a focus on investing in gender-diverse founding teams that are solving the biggest problems of our era through technology. We are true believers in the power of diversity. It leads to better results, better performance and a more inclusive future.