FemTech, Funding and A “Record” Year?

For those of you that didn’t know (and I hope that is none of you), Equal Pay Day this year fell on April 2nd.  What is Equal Pay Day, you may ask?  It’s the date that symbolizes how far into the year women must work to match what men earned in the previous year.  That sounds pretty bad.  And it gets worse – this date is based on average earnings for all women.  For black women, Equal Pay Day falls on August 22nd.  For Native Americans, it’s September 23rd.  And for Latinas, it’s November 20th.

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This got me thinking – what other things in corporate America negatively impact women?  We are in business school, so that is probably a pretty important topic to be educated on.  Well to start, there is the fact that in the US, you are not guaranteed maternity leave.  That’s right, ladies – depending on where you work after graduation, your employer is not legally mandated to give you maternity leave.  Now, as we discussed in class this past week, as the Teds of the world, and not the Bills, we will, more likely than not, work at one of the 60% of companies that do provide some sort of maternity leave.  It may not be the year of maternity leave offered by Bulgaria, but it will be something.

You’re probably wondering what this has to do with technology.  You know, the whole point of this class, and the whole reason I’m even writing this blog post.  Well, if you were on Twitter in the past week, or just reading the news, you may have heard about Elvie, the London-based start-up that received $42 million in funding.  They recently invented a wearable, wireless breast pump.  Considering the fact that in the first year of a baby’s life, if a mother is breastfeeding, they are spending approximately 1,825 hours, or 20% of their time, pumping or feeding.  If you’re a working mother, this can have a pretty serious impact on your work day.  It’s pretty cool technology, but off the bat, it’s not really clear why this was so newsworthy.  This was Elvie’s Series B round of funding, and based on the research I did, the average amount raised in a Series B round is between $15-25 million.  Their funding exceeds this, but I figured there may be something more behind this.  And I was right.

As I kept researching, I began hearing more about FemTech.  In case you haven’t been paying attention to startups this year, FemTech is “any technology geared toward improving women’s lives.”  And in 2019, FemTech start-ups are expected to receive over one billion dollars in funding.

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FemTech funding through October 31, 2018

This includes companies like Cora, which sells organic pads, tampons and other personal care products.  For every month’s supply sold, they donate a month’s supply of product to women.  This means that in countries like India, where women and girls without access to sanitary products have to miss school once a month.  It also includes companies like Milk Stork.  Those 1,825 hours that a mother may spend pumping?  A good portion of that time is spent at work, and depending on a woman’s career, may be spent on business trips.  That’s where Milk Stork comes in – women can pump while traveling, and ship their breast milk back home, or to wherever their child is, overnight.

That one billion dollars in funding that I mentioned earlier?  That’s pretty impressive, right?  Now think about it in this context – in 2018, 2.2% of the approximately $100 billion in funding that start-ups received went to start-ups led by women.  And when women did raise capital for their start-ups, they raised, on average, 36 times less money than male-led start-ups. 

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According to Forbes, that’s a pretty foolish choice – start-ups led by women, among other things:

  • Perform better over time, bringing in 10% more revenue over a five year period than those led by women, despite receiving less funding;
  • Grow faster.   From 2007 to 2018, women-owned businesses grew by 58% when looking at the number of companies, and by 46% when looking at revenue; and
  • show a correlation between diversity, innovation, and lower turnover at a company. Specifically, companies with above average diversity saw innovation revenue that is 19 points higher than those with below average diversity, and turnover that is 22% lower.

Here’s hoping that it takes less time to close the gender pay gap in funding than it does to close the gender pay gap in salaries. And remember:

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  1. Speaking broadly, I’m doubtful that the funding gap can be closed without a parallel shift in the composition of the venture investment community. When I was reading this post, I immediately thought of Ellevest, Sallie Krawcheck’s by women/for women digital investment platform (and one of FemTech’s most notable examples in the financial services space). Just two weeks ago, Krawcheck closed on a new $33 million funding round – and did so intentionally during Women’s History Month. In addition to raising additional capital from existing Ellevest investors, Krawcheck was able to bring on a female-heavy investor pool that includes Melinda Gates’ Pivotal Ventures, Linnea Roberts’ Gingerbread Capital, Valerie Jarrett, Elaine Wynn, and Astia Angel (which, coincidentally, was founded by Amy Gips, the daughter of the late BC professor James Gips). It is this kind of female focus on both sides of the funding environment – the investors and the investees – that seems to be one of the more promising routes for increasing funding of female & FemTech start-ups and for creating a self-perpetuating network of funding from and for female entrepreneurs.

  2. This was such an fantastic blog post from the company you highlighted to the statistics you shared about female entrepreneurs. A year ago, I attended a Harvard Igniting Innovation Summit and one of the startups showcased was founded by two women, initially on the search to create a better sanitary napkin for women in the military. They shared that there hasn’t been any changes in technology to that space for years and they were hoping to be a catalyst for change. I thought their story and the ones you shared were inspiring. For my project for this class, I took a look at Theranos. Somehow the scandal got intertwined with an opinion about female entrepreneurs and female CEOs. Initially, how great Elizabeth Holmes was and how she was defying stereotypes, which then morphed into a negative opinion that somehow her actions reflected poorly on all other women in the space. I am grateful to see that the opinion is not universal.

  3. licarima · ·

    Working in the talent space has brought me more and more into the light on how far behind the business world is in gender equality. I work for a company where our compensation team has spend out and analysis ensuring that there is equal pay practices. When I first joined the company I was analyst on a project that looked that the data from our employee opinion survey and when understanding the demographic information behind the results, my analysis led to immediate change in the parental leave policy giving 20 days paid leave to all parents. Back to this post, I have seen many successful women in business and work under several, and it is great to see this continue. I am not at all surprised by around Forbes start-up posts. Awesome post!

  4. Olivia Crowley · ·

    Reading this post was both fascinating and inspiring, so thank you for that. While I’m not sure Zola is a FemTech company, I remember reading a lot while working on my class presentation about how its founder, Shan-Lyn Ma, is investing a lot of time and money into growing other women-led companies. In fact, I remember reading that she recently signed on to help back a new New York-based venture firm called Female Founders Fund, or F3. Other high-profile women who are now part of the F3 team include Stitch Fix founder and CEO Katrina Lake, Soulcycle founder Elizabeth Cutler, and Melinda Gates, the co-chair of the Bill & Melinda Gates Foundation. As of last year, the firm is said to manage over $35 million of capital between two female partners, Anu Duggal and Sutian Dong. Funds are dispersed across women-led companies in a variety of sectors, including enterprise and consumer tech. Not only does this give me hope for the future of women in tech, but for women everywhere, and every aspect of their lives.

  5. I recently attended a dinner with a keynote speaker, Jacqui Canney (speaking to our class in 2 weeks), who discussed her excitement to tell her (male) boss that she was pregnant with her second child. To her surprise he responded “Well that is just no good for me”, or something along the same lines and dismissed his backing of her for a higher up position in later weeks. Her prvious boss, a woman, was ecstatic when she told her she was pregnant with her first child and offered her support throughout her entire career as a mentor. I think the idea that a woman cannot be both a mother and a successful business executive is a stigma that must end soon as they are some of the strongest and most dedicated people around. I was excited to hear about the women’s soccer team finally receiving the same pay grade as the men’s team, even though they have been the more successful team both in the sport and generate buzz about the US teams. I’d never heard of some of the start ups you mentioned but love the idea of women supporting women and banding together to make all of our lives a little bit easier. Love this post!

  6. Great post. The topic of women in tech/ startups came up quite regularly during our Tech Trek visit to SF in March. Honestly, I was fairly impressed at how thoughtful at least the people we talked to were being about it.

  7. MiriamPBourke · ·

    Great post Kate! I’m always watching this space and find it fascinating (and annoying)! I have so many issues with the VC community and their allocation of money. While I agree that feminine care products are vitally important it really annoys me that the majority of the 2.2% is going to what they call the ‘pink and fluffy’ spaces. That is clothing, jewellery, makeup etc. What’s even more annoying though is the likelihood of you receiving venture funding is far increased if you have a male on your team (http://fortune.com/2019/01/28/funding-female-founders-2018/ !) ..its crazy !! I am hopeful that this can change though as we see more and more women rising to the top of companies, and as you said, doing so very successfully, but I’m not sure the gender pay gap will ever get closed without mandatory maternity & paternity leave.

  8. mckeanlindsay · ·

    Great post! The information on equal pay day for Black women, Native Americans, and Latinas, as well as the information on the relative performance of start-ups led by women was pretty eye-opening. I do think that in this modern day and age, technology is making it easier for women to both raise children and have ambitious and successful careers; however, I also think tech can go further in directly exposing the inequities women are facing in real time. Hopefully, companies will soon start employing some transparency and competitively force this upon the rest of the marketplace.

  9. huang91j · ·

    This is so powerful and I’m so glad your topic is on this. It’s ridiculous that we still do not have equal gender pay and it makes no sense why we have not improved upon this as quickly as we should be as a society. I’m so glad companies like this exist to help women who are in careers where taking extra time away may affect their overall performance. While this provides convenience, it’s also bizarre to me how not every company in the US provides maternity leave; it’s absolutely crucial for a mother to bond with her child and not have to worry about their job being on the line if they don’t return a few days after giving birth. In the world of tech, whether you’re a guy or girl, anyone should have the same opportunities to leverage the tools to start a business, work on projects, and collaborate in a way to propel one’s career regardless of gender. I am optimistic that with our advancements in tech, it is making things easier for women and we start seeing some inequities disappear sooner rather than later.

  10. kgcorrigan · ·

    Great post! There is a podcast produced by The Skimm that I listen to every now and then in which the co-founders interview other women entrepreneurs, some of whom are among the ones that Julianna mentioned in her comment (Sally Krawcheck being one). In all of the interviews I’ve listened to, the resounding sentiment seems to be that that women need to help other women, especially in the start-up world. And when they do, the results are awesome! I’m impressed by the statistics that those women have shared, as well as the ones you included in this post, regarding how well women-led start-ups perform. I am hopeful that with more women in funding positions being able to help women entrepreneurs, we will start to see the gap shrink.

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