Femtech Connect conference puts femtech funding under the microscope

Women founders dominate the landscape in the growing femtech sector, but their male counterparts still receive the lion’s share of investment dollars. Changing that disparity was a major focus on Monday during Femtech Connect, a national femtech summit launched by the newly minted venture firm Antigoni Studios.

“We know there’s a significant white space where women are driving really compelling innovation, and it has been undercapitalized.”
Courtney Dragani, The51

Antigoni is an Edmonton-based firm with national ambitions that claims to be Canada’s first femtech-exclusive VC firm. Femtech is the broad term for technology that addresses the health and wellness needs that disproportionately impact women, girls, and those assigned female at birth.

Antigoni’s inaugural summit included a showcase of femtech founders, a conversation with the Alberta Women’s Health Foundation, and a keynote address from Brittany Barreto, a US-based geneticist, author, and femtech founder. Barreto also owns the boutique research consultancy, FemHealth Insights, which has carried out extensive research into the global femtech industry.

Barreto’s research underscores how the femtech sector has grown dramatically over the last decade. FemHealth Insight now maintains a database of more than 1,700 femtech startups in operation worldwide, up from 1,400 just a few years ago. And while 85 percent of those startups are women-founded, they often receive significantly less investment dollars than their male counterparts, even if they’re closing more deals.

It was that research that underpinned the summit’s closing panel: a discussion with Canadian VCs on how femtech startup founders can approach raising capital and what can be done to rebalance the investment equation.

The same, but different

Courtney Dragani, the chief growth officer with The51, a VC firm that invests in women-led companies, spoke to what fund managers are looking for when they consider femtech as a potential investment.

“What we look for in femtech isn’t different from any other company in that we want some demonstration that the problem is sizable enough, and that people are willing to pay for it,” Dragani said.

Problems abound in women’s health, according to Barreto, who said that in her home country of the US, less than one percent of pharmaceutical R&D funding goes toward women’s health discoveries. In Canada, men’s bodies have been the default model for scientific and medical study; A Canadian Institutes of Health Research report shows that, as recently as 2010, fewer than 25 percent of health researchers accounted for sex in their studies. The same report says that gender was almost entirely ignored.

Those differences have led to poorer outcomes for women, who more commonly experience adverse side effects of drugs, or late and under-diagnosed illnesses. That, according to Barreto, is not only harmful to women, but to business, too.

“If you’re an investor, a stockholder investing in pharmaceutical companies that aren’t looking at female-specific data, that is a risk to your business,” Barreto said during her keynote address.

As robust as the problem set is, the market for its solutions is equally large. Consultancy firm McKinsey estimated that addressing those gaps could spur $1 trillion in global GDP development by 2040.

“We know there’s a significant white space where women are driving really compelling innovation, and it has been undercapitalized,” Dragani said. “It has the capability to outperform and we’re trying to find what those pockets are to put our capital into.”

Fixing the funding problem

Femtech Connect’s investor panel didn’t argue with the notion that VC dollars are disproportionately heading to male-founded businesses, but their solution had more to do with activating women in venture capital than any one piece of individual advice for founders looking to pitch fund managers.

“We … need to see more change in terms of who has the authority to make investment decisions,” Dragani said, noting that less than 15 percent of VC general partners in Canada are women. “It’s mostly men making the investment decisions, but once you shift those numbers to 30, 40 percent of women in those decision-making rooms, then we see notable differences in terms of where capital flows.”

That sentiment was echoed by Kristina Milke, a general partner with Sprout Fund, a Western Canadian firm investing in B2B companies. Milke said she believes more private investment from women would help move the needle.

“Women putting their money into this asset class would be super helpful. There are a lot of women who manage their household’s money and are unclear on where to put it,” she said. “There’s some education opportunities that could really help educate women with capital to think about where they would like to put their money.”

“Women are so often asked about where they want to donate, but they are rarely asked about where they want to invest,” Dragani added. “Those don’t need to be two separate lenses. You can drive change forward that’s very meaningful by putting your capital at risk rather than just giving it away.”

BetaKit’s Prairies reporting is funded in part by YEGAF, a not-for-profit dedicated to amplifying business stories in Alberta.

Feature image courtesy of Jesse Cole for BetaKit.