Why the finance industry sees a $500bn women’s health market as ‘niche’ and ‘uninspiring’

“Call your wife and ask her opinion of this,” turned out to be the most successful pitch strategy for one founder.

“I had to hire a CFO with a salt-and-pepper beard so it seemed as if one of their own was endorsing the company,” admitted another.

Anecdotes like these from female founders and CEOs are plentiful. Money to finance women’s needs and their ideas for addressing them? Not so much.

Women spend around $500bn a year on medical expenses, yet women’s health issues attract a paltry 4% of the healthcare R&D budget, according to one analysis. As a woman working in the finance industry and specialising in healthcare, this data resonates with my personal experience — and it’s a huge missed opportunity.

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“Difficult… uninspiring… niche,” is what I hear when I try to pitch my colleagues femtech ideas. Niche! What’s “niche” about a market that literally comprises half the global population? Of course, that is not the market they have in mind. They are thinking about the market for the idea, not the product — the money managers who have to buy the idea before the product can get funded.

Pools of capital managed by women deliver above-average returns, yet the proportion of assets managed by women remains stubbornly stuck in the high single- to low double-digit percentage range, according to multiple sources. It is hard to imagine that there is no link between this gender imbalance among investment professionals — or the fact that all-female founder teams in the UK receive less than 1p out of every £1 of venture capital investment, according to a British Business Bank report.

Attempts to remedy this have not been especially successful thus far. “Helena Morrissey issued a rallying cry to British companies to improve diversity in their workforce as she unveiled the UK’s first gender-orientated fund,” the Financial Times reported in May 2018. The so-called “Girl Fund” was set up to allocate more capital to companies that scored well on gender diversity versus competitors.

But business did not bite. In February this year, Baroness Morrissey pulled her personal investment from the fund, saying she was “disappointed” by the lack of interest among investors. Assets dwindled from £50m at launch to £7.2m three years later and will now be merged with a wider ESG index fund.

What is surprising is not that progress on these issues is slow, but that so many people seem perplexed by the slowness. Anti-discrimination laws have existed for years, and so if the situation has not resolved itself by now, that must prove something about women and minorities’ “fitness” to compete, runs the logic in some circles.

And indeed it does: it tells me that as a woman, I am worse at being a man than men are, in a working world designed by men for men. Banking’s heyday began with the rise of the mercantile class as the Middle Ages gave way to the Renaissance; women have only been admitted in meaningful numbers and in a professional capacity within living memory.

One way to improve things would be for the world of work to stop making me contort myself into being a second-rate man, so that I could put my time and energy into being a first-rate woman instead.

A couple of years ago, I participated in a focus group, the purpose of which was to gather insights into how working conditions could be improved in the Square Mile. The panel was remarkably diverse and the conversations were surprisingly frank. People spoke pretty openly about mental health and substance abuse, for example. When the facilitator asked us to name some underappreciated challenges or subjects we thought could use more attention, I waited to see if anyone would mention the one I had in mind. No one did, so after everyone else had said their piece, I piped up with “menopause”.

After a brief and uncomfortable silence, a couple of women confessed they had struggled to cope with “the change of life” and had seriously considered giving up on their careers altogether. They had felt unable to admit to their colleagues and bosses what was happening to them, much less ask for support. Some of the men said they had no idea how to discuss the issue with female colleagues or reports, and wondered aloud which was more discriminatory: broaching the topic or pretending it didn’t exist.

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Things are changing — slowly. Female broadcasters and celebrities are breaking the menopause taboo by speaking about it on TV. As that conversation becomes normalised, it might be easier to pitch femtech companies to male investors without them wanting to escape the room at the mention of phrases such as “hot flashes” or having to call their wives for insight into the problem underlying the solution being pitched.

If enough of those ideas can get funding, perhaps we will even get to a place where more of the products make it to market. Those products might help more women perform to their full potential and remain in their careers longer, perhaps giving more of them a shot at reaching the top of their companies or managing more of the world’s capital — capital that can be reinvested into other under-served markets and great ideas sourced from much wider and deeper pools of talent, for the benefit of us all.

Dr Amy Walker is an analyst at Peel Hunt, and formerly co-led European pharmaceuticals equity research as an executive director at Morgan Stanley.

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