Female health startup, Flo Health, reaches "unicorn" status, but raises questions about its suitability as being led by a male team within the realm of femtech.
In a groundbreaking move, Flo Health, a period tracker app, has achieved unicorn status by raising over $200 million in Series C investment, making it the first European femtech company to reach this milestone. With 68 million monthly active users and 380 million downloads, Flo Health provides medically certified information about ovulation and menstruation.
However, the success of Flo Health comes amidst a concerning reality in the femtech sector. According to recent data, European femtech startups raised only $191 million in 2023, a fraction of the $9.7 billion raised in the wider health tech sector. This disparity highlights the need for more investment in women's health companies, a need that Flo's achievement seems to signal.
The lack of female representation in leadership roles within femtech companies, such as Flo Health, is a problematic aspect that has significant impacts on funding and success. A male-dominated leadership can lead to solutions that are designed without fully understanding the needs and experiences of the female user base. This can result in products or services that do not fully meet the needs of female users, potentially leading to lower adoption rates and reduced market success.
Studies have shown that diverse teams, including having women in leadership roles, lead to more collaborative and empathetic work cultures, which can enhance organizational performance and innovation. However, despite growing awareness and recognition of femtech's potential, these companies, especially those founded by women, face significant funding disparities.
The underrepresentation of women in leadership can limit access to funding, with women-led startups often facing biases and lacking the necessary networks for scaling. Without sufficient funding, femtech companies struggle to scale, which hampers their ability to deliver solutions effectively to their target audience. This can undermine their long-term success and impact.
Dmitry Gurski, co-founder and CEO of Flo Health, identifies a gap in women's health services as the motivation for starting Flo Health. However, the tech industry remains dominated by men, with studies showing that Venture Capital (VC) investors are more likely to favor male founders. A 2019 report found a gender gap in funding for male-led versus female-led startups.
While celebrating Flo's success, it is important to acknowledge the underfunding and underrepresentation of female founders in the tech industry. Female-founded companies within the tech industry outperform investments with all-male founded teams by 63%. Anna-Sophie Hartvigsen, cofounder of Female Invest, criticizes the male-dominated leadership of Flo Health becoming the first women's health app to achieve unicorn status.
Flo Health is catered to help anyone who menstruates understand their cycle and predict monthly changes. Despite being founded, funded, and run almost entirely by men, the app's success serves as a strong signal to the market that direct-to-consumer women's health is monetizable in Europe. Addressing the gap in female representation in leadership roles within femtech companies is crucial for the success and impact of these companies, ensuring that solutions are designed with a deep understanding of the needs and experiences of the female user base.
References: [1] Marçal, Katrine. (2020). "What Women Want: The Struggle to Save the Female Sex Toy Industry." The Guardian. [2] "Flo Health Raises $200 Million in Series C Funding." TechCrunch. [3] "Femtech Startups See Decrease in Global Funding." TechCrunch. [4] "The Business Case for Diversity and Inclusion." McKinsey & Company. [5] "The Impact of Gender Diversity on Innovation." Harvard Business Review.
1.The success of Flo Health, a period tracker app, underscores the potential of health-and-wellness technology, particularly in women's health, as it becomes the first European femtech company to achieve unicorn status.
- However, the tech industry's male-dominated leadership in femtech companies can lead to solutions that may fail to meet the needs of the female user base, emphasizing the need for greater representation of women in leadership roles for improved innovation and performance.
