"If investors are disappointed with other sectors it’s a good time to explore FemTech"

For Dr. Tal Tirosh, the progress that the FemTech sector has made in the span of a few years is remarkable. “Even just three years ago, there were much fewer companies than today. Now there are about 1,800 global FemTech companies and around 2000 investors, but there is such a long way to go.”

She notes that as awareness and understanding of the sector has increased, it has also diversified its offerings and will only continue to do so. “In the early stages, FemTech was very centered on highly technical, medical solutions, mainly pregnancy and reproductive health-related. What we’re seeing now is a wider variety of categories within FemTech, such as menopause, menstruation care, chronic illnesses and how women are affected differently, more companies focused on issues beyond fertility treatment. We also see women’s safety-related solutions surging.”

Tal Tirosh

Tirosh is a partner at Israel’s largest high-tech legal department at Amit, Pollak and Matalon law firm in Tel Aviv, one of the most renowned law firms in the country. Tirosh earned an LLM and a JSD from Yale Law School, going on to practice in New York for a decade, before returning to Israel where she has focused on M&A as well as the Israeli high-tech sector.

She is particularly passionate about FemTech, due to both her vast experience working in the high-tech sector, representing numerous female founders and FemTech companies, as well as her own experiences. “During my own journey towards motherhood, I have experienced first hand, the lack of adequate technological solutions and research for and relating to women’s health, as well as bias,” says Tirosh.

For International Women’s Day in March, Tirosh was invited to address the UN’s Conference on the Status of Women where she gave two lectures, one of which focused on underinvestment in FemTech today, the industry’s specific challenges and how to overcome them.

Challenges to overcome

From Tirosh’ perspective there are several major challenges that FemTech faces globally, as well as issues specific to Israel, including educating the market, overcoming gender-based bias and stigma, and the chronic underrepresentation of female investors. In Israel, these issues are more profound due to the smaller market. “There are at least 12-15 VCs around the world focused on FemTech, mainly based in the US. In Israel there is simply no equivalent,” says Tirosh.

Only 4% of tech investments are invested in FemTech worldwide. Israel has the fourth largest number of FemTech companies in the world, and is second only to the United States in terms of global investment in the sector. According to a Startup Nation Central report, Israeli FemTech raised a cumulative $154 million in 2022, which accounted for 13% of investment in Israel’s MedTech sector.

Another challenge specific to Israel is the fact that the country's professional network, especially in tech, is highly linked to military service. The classic path for tech entrepreneurs is to begin their careers in elite military intelligence units, such as the famous Unit 8200, where they cultivate relationships that later grant them entry to professional networks in the tech industry. While there are more women in these units than ever, they are still significantly underrepresented, and, as a result, women lack the same built-in networks to help them establish themselves in the industry.

Of course, FemTech, like the industry at large, has been impacted by the economic downturn. However, Tirosh actually thinks that this challenge could pose an incredible opportunity for FemTech companies. “Most of these companies are in pre-seed stages. They are starting with such little investment to begin with and don’t need as much funding in the initial stages,” she explains, noting that if anything, investment in pre-seed and early stage companies is more appealing to investors at this time than making larger investments in more costly companies. “This is an untapped market, and the size of the potential market is mind-boggling - it’s trillions of dollars. If investors are disappointed with other sectors it’s a good time to explore FemTech.”

How to increase investment

What Tirosh is most concerned with now is how to increase investment in FemTech - the topic of her lecture at the UN. Below are five key strategies that Tirosh advises those operating within the FemTech sector and community to keep in mind.

1. Educate investors

“Priority number one is to raise awareness about the market among investors and to propose solutions to overcome these issues,” says Tirosh. “We should focus on educating the investors’ community not only about the market but also about their own ingrained bias regarding women’s health and women-led companies.” She notes that historically the managing partners at VCs have suffered from a lack of diversity in general, particularly gender diversity.

2. Increase the number of female investors

FemTech companies are disproportionately led by women compared to other tech sectors, but FemTech investors, like all investors, are largely male. “We need to address the underrepresentation of women in VC firms and the investment community generally. The government could provide financial incentives to support this, but I don’t see this happening in Israel any time soon,” says Tirosh. In the absence of institutional support, women must rely on one another, and specifically increase the number of female angel investors, she adds.

3. Educate women about entrepreneurship

Increasing the number of female investors is a long-term goal, and will require addressing the education gap between men and women regarding tech, entrepreneurship and investing “Education needs to be promoted among women in these fields, as well as training and mentoring for women of all ages in innovation, entrepreneurship, technology. We need to encourage them to pursue these avenues via internships, seminars, workshops and academia,” says Tirosh.

4. Utilize social networks

None of this can happen if women do not “build entrepreneurial networks and we as women need to do a better job of that,” says Tirosh. “We, as women, are so good at building relationships and making use of existing networks,” she says. In addition, the FemTech sector needs to cultivate partnerships with other sectors including “healthcare practitioners, clinicians, and other healthcare professionals to support FemTech founders, as well as academia and the wider tech industry.”

5. Go on the offensive

Finally, Tirosh says that as a sector, FemTech founders and investors need to go from playing defense to offense. FemTech companies are often forced to spend a disproportionate amount of their time explaining, educating and justifying the sector’s existence, the importance of women’s issues and women’s health. While this remains necessary, Tirosh thinks that it is equally important to emphasize the business and economic potential of the sector.

“They don’t need to invest just because it’s good for the soul,” Tirosh laughs. “We need to explain to investors that there are major economic benefits that they can be a part of.” Once investors understand this, overcoming bias regarding female enterprises becomes much simpler. “You don’t need to be a woman or have a personal connection to recognize amazing companies with very bright founders.”