Women’s health funding: Promising signs, yet 'woefully behind'

In the world of women’s health funding, the majority of founders, investors and advocates say the progress made in the last two years isn’t enough.

“We’re in the early innings,” said Gina Bartasi, CEO of fertility startup Kindbody. “We’re seeing more investments and more resources but we’re still woefully behind.”

While some areas of women’s health -- such as fertility and menopause -- have seen increased investment, those in the industry say the sector is still largely underfunded. Frustration also stems from a lack of opportunities for women-led companies and companies focusing on women's health.

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“Yes, there’s momentum,” said Andrea Ippolito, CEO of breastfeeding startup SimpliFed. “But no matter how much momentum there is, if investment dollars aren't going to women, who tend to innovate more in the women's health sector, then it's still facing headwinds.”

Women’s health-focused startups in the U.S. received $952.5 million last year, down from $1.06 billion in 2021, according to market data and research company Pitchbook. The drop-off from 2021 to 2022 was smaller in women's health than in digital health as a whole.

Progress is impeded by challenges with reimbursement, bad user experience and misguided perceptions about the category as a whole, experts say. The women's health space is perceived by some investors and buyers as small, said Stephanie Palmieri, partner at venture capital firm NextView Ventures.

“I think we can certainly say that the growth of venture dollars going into women-led companies has certainly been disappointing,” Palmieri said.

Fertility is booming

Fertility startups have seen the steadiest stream of investment. In 2022, there was $854.5 million invested in fertility tech companies from venture capital investors, according to Pitchbook data. Nearly 20% of women age 15 to 49 are unable to get pregnant after a year of trying, according to data from the Centers for Disease Control and Prevention.

Kindbody provides fertility consultation, egg freezing, in vitro fertilization, embryo banking, embryo storage and other fertility solutions for employees. The company scored a $100 million investment in March from investment firm Perceptive Advisors and in May added $25 million from Morgan Health, a JPMorgan business unit focused on employer-sponsored healthcare.

“We've seen a demographic shift of women who are delaying pregnancy,” said Dr. Cheryl Pegus, managing director at Morgan Health Ventures and a board member at Kindbody. “We've seen LGBTQ+ couples who are looking at having children. And so services that should be part of your normal well-being are being built and grown out in different ways.”

The rising interest in fertility is seen in both public and private companies. Progyny, a publicly traded fertility services company that works with employers, recorded revenue of $786.9 million last year, a 57% increase from 2021.

“Companies are recognizing it’s an unmet need that has to be addressed,” said Progyny CEO Pete Anevski.

Company founders and investors are recognizing the market's potential in the U.S. and abroad. Lorin Gu, founder of investment firm Recharge Capital, launched a $200 million fund focused on women’s health last week with a particular interest in fertility companies in emerging markets. Tel Aviv, Israel-based fertility startup AIVF received a $25 million Series A funding round in June 2022. Founder Daniella Gilboa said an increase in innovation and virtual care during the COVID-19 pandemic helped spark the rising interest in fertility startups.

“It’s easier for startups than it was five years ago,” Gilboa said.

Menopause gets its moment

The number of companies targeting menopause has increased in line with demographics and an aging population. Dr. Alice Zheng, a principal at venture firm RH Capital, estimated approximately five menopause startups existed four years ago. Today there are about 100.

Gennev, a virtual provider of menopause services founded in 2015, was one of the early companies in the space. Founder and CEO Jill Angelo, who spent 14 years at Microsoft before starting Gennev, saw a need in the market for women whose careers were getting sidelined as they dealt with menopausal symptoms.

“Every single woman goes through menopause,” Angelo said. “Around 80% of all women experience some sort of menopause symptom that debilitates for life, whether that's sleep deprivation, hot flashes, anxiety, weight gain, extreme mood swings, skin and hair changes, or problems with sex and libido.”

Despite progress, Angelo said there remains the issue of buy-in from employers and health plans and menopause startups need to follow the playbook started by mental health companies to get more adoption from employers and health plans. Gennev is just starting to work with payers after seven years of patients paying directly, she said.

“Mental health was highly stigmatized, and nobody talked about it until certain influencers or people of power started talking about it as a real issue. Then it became accepted. And once that tidal wave begins, then the workplace must react and respond to it,” Angelo said. “We’re in the early stages of that with menopause.”

Structural barriers around payment affect the growth of many areas of women’s health, particularly menopause and fertility. Lack of reimbursement often forces women to pay for services out-of-pocket expenses, experts said.

“There are 20 different types of Viagra that get reimbursed,” Ippolito said. “We're just looking for the same. We’re looking for parity.”