'Femtech' companies are likely poised for speedy growth - despite failing to prove that their tools live up to the hype

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The "femtech" industry, comprised of digital solutions targetting women's health, has attracted a flock of new players as powerful tech giants like Apple peg it as a worthy growth space and startups file in with new tools - but many solutions aren't living up to the hype.

Investors Are Sinking More Cash Into Femtech Startups GloballyBusiness Insider Intelligence

US and Swiss researchers analyzed data from 200,000 users of fertility-tracking apps Kindara and Sympto and found that the digital tools were less precise than traditional monitoring, according to a study published in Nature.

There's a mound of evidence underscoring femtech's shortcomings:

  • The jury's still out on whether most women's health app apps live up to their promise. The majority of femtech companies have yet to conduct research delving into their products' efficacy, Politico notes. And the evidence available isn't rosy: A review of 73 menstrual cycle apps found that none could precisely predict ovulation - with the best scoring a mere 21% accuracy rate, per a 2018 study from Current Research and Opinion.
  • Some femtech tools have landed in the spotlight for shady data-sharing practices. Digital contraceptive Natural Cycles - which was accused of leading users astray and contributing, in part, to unwanted pregnancies - states that it can "publicly display" users' anonymized information, per Wired. And reports that pregnancy apps like Ovia share information with employers have popped up recently, The Washington Post notes.
  • And digital health companies have to compete with the reliability and cost-effectiveness of traditional care. Fertility testing is covered under most insurance plans, whereas femtech kits can come with hefty price tags: San Francisco-based Modern Fertility's kits are sold for $160, Tech Crunch reports. Cost aside, consumers might be drawn to traditional care if they're looking for accuracy: Signs indicating ovulation can vary greatly from person to person, so the direct-to-consumer (DTC) model might prove a wealk alternative to personalized and thorough medical care.
The bigger picture: Despite femtech's shortcomings, its forecasted growth isn't likely to fall short.

Investors continue to pour cash into femtech startups. Femtech startups worldwide raked in an estimated $400 million in 2018 - up from $100 million five years prior, Pitchbook reports. And 2019 is off to a fast start: Modern Fertility, for instance, bagged $15 million in June.

Evidence pointing toward ineffectiveness and questionable practices hasn't dampened investor activity and likely won't going forward - especially since over three-quarters of women say they intend to use fertility apps, per a 2018 survey of 1,000 US women.

We think we'll start to see more funding allotted to US femtech startups down the road as the global market marches toward its projected $50 billion valuation by 2025, according to Frost & Sullivan.

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