Women’s digital health startups reap record venture capital funding on COVID-19 surge

Once considered too niche or risky by the venture capital community, women’s health startups have seen a surge in investments as the COVID-19 pandemic pushed more services online.

Funding for women-focused digital-health startups rose 105% last year to $418 million and was spread across 22 companies, nearly twice the number from a year earlier, according to Rock Health, a San Francisco-based seed and early stage venture fund.

The firm tracks deals of $2 million or more among U.S.-based digital-health companies. It counts 55 companies in the “femtech” category, which includes those that tackle issues such as reproductive health, maternal care and chronic disease.

“The health care market is a $4 trillion industry,” Rock Health CEO Bill Evans said. “Women’s health is a small piece of that, but there are significant unmet needs among women today that are more overlooked than other areas.”

Women make 80% of health care decisions in the U.S., according to the Department of Labor, and spend 29% more per-capita on health care than men. The pandemic brought health to the forefront and with it an explosion in digital health solutions, from telemedecine to wearables and digital health tracking. These developments amplified the opportunity to target women’s health needs.

The biggest investments in women’s digital health last year included $121 million for Sema4, a Stamford, Connecticut-based startup that conducts prenatal testing, carrier screening and hereditary cancer testing; $55 million for wearable breast pump-maker Willow of Mountain View, California, and $45 million for virtual health hub Maven Clinic, based in New York, according to Rock Health.

Despite the recent jump in investor interest, femtech startups still only accounted for 3% of overall digital-health funding in 2020, according to Rock Health. “Proving the return on investment is the hardest thing for most health care companies – proving it for women’s health is harder even if we may have overcome the barrier of belief that women’s health opportunities are significant,” Evans said.

New York-based Tia – which raised $24 million in venture capital last May – aims to capture the full spectrum of women’s health from primary care, gynecology and therapy to nutrition counseling and acupuncture through its hybrid model of virtual and in-person clinics. For $15 a month, patients have access to Tia’s one-stop shop of in-house physicians, unlimited messaging and centralized medical records.

“The health care system was designed to treat specific conditions. Women aren’t symptoms, body parts or CPT codes. We’re a whole people,” Tia co-founder and CEO Carolyn Witte said.

Before the pandemic, Tia’s virtual offerings were limited to chat messaging. When COVID-19 hit, the company shifted gears and launched a comprehensive suite of telehealth care. “Suddenly, we were faced with this opportunity that happened overnight,” Witte said. “The future of this space means designing care so that virtual can be a better-than version of in-person care. However, we’re cognizant that procedures like mammograms can’t be done online.”

With one physical clinic open in New York City and another launching in Los Angeles this month, Tia plans to open at least two additional clinics this year and 10 more in 2022.

Oula Health, a pregnancy care startup based in Brooklyn, launched in December. The company provides midwives, obstetricians, doulas and lactation consultants through a telehealth platform in addition to regular in-person prenatal visits at its brick-and-mortar clinic.

Oula’s platform gives women another option to hospital birth through its obstetrics and midwifery care that treats birth as a natural life event, with medical interventions only when necessary. With an in-network model, the company charges no membership fees and accepts most major insurers in New York, including Medicaid.

“We’re really trying to flip the maternity care system on its head,” co-founder and COO Elaine Purcell said.

In October, Oula raised seed funding of $3.2 million led by Collaborative Fund, with participation from Female Founders Fund, Metrodora Ventures, a venture capital firm co-founded by Chelsea Clinton, and health care founders including Kate Ryder, CEO of Maven Clinic, and Tom Lee of One Medical.

COVID-19 solidified the opportunity to fill a gap in pregnancy care as telehealth adoption exploded, Purcell said. Still, getting some male investors to buy into the concept wasn’t easy.

“It was a challenge,” Purcell said. “They personally hadn’t gone through it and couldn’t fully understand the birth experience and the need to change the status quo.”