Femtech: projects led by women are less likely to be funded than others, according to a study

Femtech, female technology, is truly growing. However, the people behind these innovations intended to improve women’s health are not women themselves. Before a product can be brought to market, investors must be able to finance, among other things, its design, production and distribution.

This is where the problem lies. According to a study broadcast by The Guardianand produced by Ludovica Castiglia, a researcher who collaborates with FemHealth insightsa North Carolina-based women’s health and femtech consultancy, health technologies designed to address a broad range of women’s issues are less likely to get funding if a woman is part of the founding team.

“Please,” he disapproved

Additionally, femtech founders are also less likely to get funding if they use terms that sound like “advocacy” in their funding requests, including “women’s rights,” “feminism,” “discrimination,” “equality,” inclusion”, “acquisition” or “freedom”, depending on the analysis.

In contrast, male femtech founders could benefit from more investment if they use the same or similar terms.

“This may be because women who advocate for women’s rights are seen as emotional, upset and angry, rather than as businessmen trying to maximize their profits,” Ludovica Castiglia speculated. “On the other hand, men get more funds if they use the same words, perhaps because investors see it as a self-serving defense, and therefore evidence of their economic acuity.”

A “negative element” for investors

“The depressing message is that even if you work in an industry where 75% of companies are founded by women and you have developed a product aimed specifically at women, having a woman on the founding team – even if associated with a man – reduces the chances to obtain financing”, analyzed Ludovica Castiglia.

“Instead of viewing female entrepreneurs in one of the most female-dominated sectors in the startup world positively, potential investors often view them as negative and therefore refuse to provide them with funding,” she added.

23% less capital

Castile’s study finds that since 2010, femtech companies founded by women in the UK, US and Canada have raised on average 23% less capital per deal than similar companies founded by male-females.

On average, femtech companies founded exclusively by women receive 28% of venture capital funding, compared to 38% for femtech companies founded entirely by men. Just over a third of funding went to companies funded by mixed teams.

To find these results, Ludovica Castiglia analyzed for her study 1,720 financing deals entered into by 513 venture-backed women-owned tech companies in the UK, US and Canada. A “shocking number” of female-led femtech companies have received less funding than similar male-led companies, it has emerged.