FemTech Is Taking the World by Storm - Except in Israel

Investment in tech aimed at women's health has doubled globally - but dropped by 25% in Israel: ‘When I started raising money for my home gynecological startup, they asked: Who needs it?’

Corin Degani
Corin Degani
The global investment in FemTech is rising. However, Israel is still stuck. Will Israeli tech manage to join the gendered tech revolution?
The global investment in FemTech is rising. However, Israel is still stuck. Will Israeli tech manage to join the gendered tech revolution?Credit: Serhii Bobyk/Shutterstock
Corin Degani
Corin Degani

Five years have passed since the term “FemTech” was coined – and now the sector is beginning to gather momentum and realize its massive potential.

A new report from global consulting firm McKinsey shows a major increase in the number of investments in the industry and the number of articles about it – but this is still small change compared to the investments in other sectors of hi-tech.

The figure that stands out the most is the jump in investment in so-called femtech all over the world: $2.5 billion in 2021, compared to just $13. billion in 2019, the year with the previous high. In 2020, most likely because of the coronavirus pandemic, total femtech investments were less than $1 billion. The number of deals last year was almost 300, similar to 2019.

One of the women behind the report is Gila Tolub, a partner in McKinsey’s Tel Aviv office and a consultant in the fields of healthcare and pharma who heads the firm’s Tech Hub in Israel. “In 2016, the term was first coined; in 2017 only 25 articles were written about femtech. In 2021, there were 700 articles on the subject, which illustrates the significant rise in awareness and activity.”

Gila Tolub, a partner in McKinsey’s Tel Aviv office and a consultant in the fields of healthcare and pharma who heads the firm’s Tech Hub in Israel.Credit: Ronen Goldman

Femtech is the name for the digital medical sector with firms in software, hardware and services aiming to improve the health and quality of life of women. Tolub explained how McKinsey conducted its research: “We looked for data on femtech companies that meet the definition we decided on: Companies with a technological component (for example, a digital solution) a product that turns directly to customers (as opposed to a product that is sold to hospitals) and which meets the urgent needs of women. Everything related to the beauty industry, for example – was left out.”

“We found some 760 companies, and divided them into categories. This allowed us to see which areas have a concentration of innovation, and where there are lacunas where innovation is missing,” said Tolub. McKinsey divided them up into two main groups: Services and support, and products and devices. This mapping showed that the two groups have a concentration of companies focusing on pregnancy, and among the products and devices group there is a concentration of products related to menstruation.

GalsBio's smart tampon and cup also hopes to support diagnosisCredit: Gals Bio Ltd

At the same time, there are areas which have a lot fewer companies: “30 percent of the companies are involved with pregnancy healthcare and 14 percent with fertility. In comparison, only 4 percent concern menopause, and only 2 percent with gynecological infections. It shows us where the opportunity for innovation is,” she said.

Israeli countertrend

Does the optimism surrounding the global femtech market apply to Israel, too? According to the data from the Startup Nation Central platform from 2021, Israel has about 130 startups whose target clientele is women, including 90 in the field of women’s health – a number that has changed very little in the past few years.

As opposed to the global trend, in which investments in the sector fell in 2020 – Israel actually showed an increase in investments. $215 million were invested in Israeli Femtech in 2020, compared to $157 million in 2019. But in 2021, these investments fell to just $160 million.

“What testifies more than anything about the situation of Israeli femtech is the fact that most of the fundraising is conducted through crowdfunding platforms and not through [investment or venture capital] funds,” said Efrat Ramati, the CEO of Algamed Therapeutics.

'Most femtech fundraising is conducted through crowdfunding platforms and not through [investment or venture capital] funds,' says Efrat Ramati, the CEO of Algamed TherapeuticsCredit: Lia Yaffe

“It’s very hard. When I started three years ago to raise money for my previous startup, Ladysense, a device for gynecological examinations at home – we also went to prominent Israeli venture capital funds and we received confused responses, such as ‘why do you need something like this? What are you trying to solve?’ At the time we received a certain amount of funding from the Innovation Authority, and soon Ladysense will start crowdfunding through PipelBiz.”

Today, Ramati runs Algamed, which developed a product that is already “on the shelf” to solve some of the common problems women have – dryness, infections and pain in the vagina – using gel based on algae that has been patented. “There is a change in the field. We raised about 4 million shekels, also through PipelBiz, for expanding in the United States. When you talk to people who aren’t professional investors, you see that they understand the problems and know that it’s important. But the funds, in more institutional bodies, I haven’t seen any significant change in Israel.”

“In the United States and Europe, they have realized that this is a market that is starving for solutions, but in Israel they have still not yet discovered the potential. So there is an opportunity for investment here,” said Ramati.

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