Navigating the 2024 Investment Landscape in Women's Health: Challenges and Opportunities
As a startup founder, understanding the investment landscape is crucial, especially if you're seeking Angel or institutional capital.
As we continue navigating the current market conditions marked by inflation and high interest rates, the overall deal market has been sluggish due to the elevated cost of capital. So, what does this mean for women’s health? Let’s dig into the data.
The data.
According to Deloitte, while venture funding in the healthcare market experienced a decline of 27% between 2022 and 2023, investments in women’s health saw a growth of 5%. Don’t celebrate too quickly, this 5% growth only represented 2% of the total $41.2 billion in venture funding allocated to healthcare last year.* Some wins, some losses.
Here's the promising part: despite the downturn in the healthcare sector, overall US investment in health (compared against all other investments) has remained relatively stable at around 25% over the past four years (with minor fluctuations of about +/- 4%).* This resilience underscores the stability and potential of the healthcare sector even during economic challenges, which is crucial to understand when assessing investment opportunities in women’s healthcare as a startup founder.
Women's health funding peaked in 2021, dipped in 2022, and moderately rebounded in 2023.* So, what does this mean for 2024?
We asked women’s health focused VC’s thier thoughts.
Here's what we've gathered from discussions with women’s health-focused VCs who lent us their time.
Funds have continued to raise so they have money that needs to be spent. The consensus is that notable changes depend on how quickly the overall US investment cycle rebounds. Despite macroeconomic challenges, there's clear optimism among women's health-focused VCs for 2024 to outperform 2023, but these limited funds can't support all startups.
Some broader VC’s seem to be monitoring developments in private equity, and ecosystem consolidation to further validat women’s health isn’t just a “niche” market. Additionally, women LPs are expressing more interest in women's health-focused opportunities, so it will be interetesing to see who meets this demand.
Interestingly, some women’s health VCs noted that certain sectors, like reproductive health, are becoming crowded, prompting a growing interest in companies addressing more holistic women’s health concerns.
The invetment gap.
The women’s health gap, as defined by McKinsey Health Institute, encompasses four key areas: science, data, care delivery, and investment.* Without sufficient growth in investment, the healthcare market won't mature at the pace demanded by increasing innovation as science, data and care delivery models accelerate.
In 2024, the pivotal question remains: Will women’s health capture more than 2% of the 25% health-focused US dollars as the market rebounds?
While healthcare industry analysts have long recognized the market opportunity, 2023 marked a significant turning point with a notable increase in the actualization of this data. Pitch Book's data underscores this trend, showing 35 women’s health exits in the past five years, indicating a tangible and growing market share for women’s health ventures.*
The growing recognition of opportunities in women’s health reflects a notable shift in the healthcare landscape overall. As the industry continues to evolve, understanding and leveraging these trends will be imperative for startup founders operating in this space.
The anticipation within the VC and healthcare industries fuels our cautious optimism for emerging opportunities in 2024, particularly from funds traditionally less involved in women’s health. If we witness the solidification of bigger deals this year, there's hope for a wider diversity of funds to allocate more capital.
What does all this mean for founders looking to raise in 2024?
Strategies for startup founders looking to raise.
Prioritize Financial Self-Sufficiency: Pre-seed and seed stage startups should prioritize financial independence while they find product-market fit.
Quantify Verifiable Data: Develop strong, verifiable data to increase competitiveness given the limited funds focused on women's health.
Pursue Non-Dilutive Funding: Explore funding alternatives like STTR and SBIR grants to minimize dilution. With the 100 million in federal funding to fuel research into women's health setup by Jill Biden in late-February there are more opportunities for grant funding than ever before. There are also lines of credit for business with customers to support inventory or other seasonal needs. Institutional capital is necessary out the gate and make sure to investigate all other opportunities before you raise.
Consider a Holistic Approach: Address the broader women's health needs connection beyond solely reproductive health as solutions and partnerships in your ecosystem solidify and expand.
Despite stagnation there are deals flowing.
Some notable February deals include Oula securing $28M in Series B funding for US-wide expansion of maternity services and Elektra Health adding $3.3M in seed funding to grow menopause care. FamilyWell Health also secured $4.3M seed funding to advance maternal mental health.
Looking Ahead.
While the current macroeconomic environment presents challenges, the increasing emphasis on quantifying the importance of women's health, along with rising LP interest and moderate VC optimism, indicate potential for future growth.
However, as with all market-driven analysis, this landscape is subject to change. As startup founders looking to raise, it’s imperative to monitor deals closely and follow the money to gain insight into where true value is being placed.
Sign up for our HDG monthly insights newsletter and stay informed about market trends in the months to come to help you navigate the evolving landscape effectively. Or, DM me for questions on how we help build capital strategy.
*Resources
Forces of change The future of health / The Deloitte Center for Health Solutions
Women’s Health Investment / The Deloitte Center for Health Solutions
The Future of Digital Health/ BCG
Closing the Women’s Health Gap: A $1 Trillion Opportunity to Improve Lives and Economies/ Mkinsey Health Instittute
