Improving women’s health through clinical trials including female participants.
The women’s health sector is undergoing dramatic changes, fueled by factors such as increased awareness of women’s unique health needs, advances in biotech and telehealth, and a shift towards more flexible business practices. Although it has dropped capital support from 2021, the industry continues. However, it faces major obstacles, especially limited funding, which accounts for only 2% of health-related financial investments. Other challenges include strict regulations, a lack of diversity in clinical trials, and a lack of focus on women-led businesses.
To fully realize its potential, the women’s health market needs a diversified approach that includes VC investment, government support, and a focus on data-driven, personalized care.
Women’s Health Innovation Funded by Venture Capital
Improving women’s health through better breast cancer screening.
The women’s health market, worth $41.3 billion in 2023, is on the verge of significant growth – $66 billion in 2033 – despite problems such as restrictive laws and high treatment costs. Venture capital is the key to overcoming these barriers, stimulating innovation by providing funding, guidance and resources to start developing solutions for unmet needs. This support accelerates the development of cutting-edge technologies that address key areas such as fertility, menopause and maternal health.
However, the women’s and family health sector has seen a sharp decline, with investment falling by more than 50% between 2021 and 2024, according to a PitchBook analysis. As of December 17, 2024, the women’s and family health sector had received $19.52 billion in capital investment, short of 2019 levels.
The decline disproportionately affected women-founded companies, raising concerns about the equitable distribution of resources. Although there was a slight increase in 2024 compared to 2023, growing VC support is still important to develop comprehensive health solutions for women.
The US business outlook for 2025 offers some hope, with exits in 2024 (including Agile Therapeutics and Gynesonics) and projected M&A and IPO activity boosting investment in the sector. This best practice, along with VC strategic support, will be critical to driving innovation and addressing the evolving needs of women’s health around the world.
The Evolution Of VC Investment In Women’s Health
Using AI to improve women’s health.
“The women’s health market in 2025 may continue to face strong challenges created by political conditions at the federal and state levels, [But] The post-Dobbs industry dynamics, where companies successfully adapted their services and saw increased demand, prove that regulatory restrictions can force innovation and creativity,” explains the general partner of Lux Capital Deena Shakir on Fortune.
Rather than deterring investors, recent challenges have encouraged greater interest and investment in the sector. Dedicated funds have emerged, reflecting a focused commitment to women’s health, and unicorn success stories like Maven confirm the market’s potential and potential.
However, there has been a much larger decline in VC investment in women’s and family health than the sector as a whole from 2021, the high water mark. However, the investment landscape for women’s health has changed over the past five years, from a niche sector to a well-known and promising market. This change depends on several factors, such as:
- Attention from the Biden administration, with a $1 billion investment in women’s health research.
- Additional advice and understanding of women’s unique health needs.
- The growing need for innovative solutions designed for women’s health.
- The emergence of data-driven and multidisciplinary approaches to women’s health.
Naseem Sayani, an experienced VC investor in women’s health and a working partner at How Women Invest, attributes this shift to several reasons:
- The focus is changing from B2C solutions to more B2B and B2B2C models, which allow better integration with providers and payers.
- Major advances in biotech are addressing key areas such as ovarian health and cancer screening, offering the potential for improved longevity and earlier intervention.
- Telehealth and remote care solutions are expanding access to care, especially in underserved areas with limited health care options.
To accelerate the development of women’s health, there is a great need to increase investment in clinical trials, and research focuses on women’s health issues. Public and private funding is essential to ensure these trials are adequately resourced and include diverse representation to address the unique health care needs of diverse populations, said Sayani.
In addition to traditional VC funding, grants, and equity capital are critical to supporting the health of female startups and fostering innovation. These financing methods provide valuable resources without requiring the founders to provide equity, which allows them to focus on developing solutions and achieving product market success.
Sayani cites several factors that could contribute to increased funding in the area of women’s health:
- Mergers, acquisitions, and IPOs demonstrate the potential for financial returns in this sector, attracting investors and demonstrating the potential of women’s health businesses.
- Emerging technologies such as AI offer significant opportunities to innovate diagnosis, care delivery and personalized medicine, attracting investment to companies developing these solutions.
- Regulatory and policy changes, such as reforming reimbursement codes and simplifying AI management, can create a better environment for investment and innovation in women’s health.
Women’s Health Innovation Needs More VC Investment
Costs of women’s health care in the US economy.
Over the past 75 years, the lack of innovation in OB/GYN care has hindered the identification and effective management of pregnancy and high-risk pregnancy. Late diagnosis and limited genetic testing contribute to underdiagnosis and delayed care, while a lack of personalized medicine and inadequate pre- and postnatal care leave unmet needs unattainable. This has led to high mortality rates and increased risks of premature births, especially in rural areas.
Founders often start companies to solve problems they have. Anu Sharma, founder and CEO of Millie—a hybrid women’s health company focused on prenatal health—has had six treatments for fertility, gestational hypertension, unplanned C-section and postpartum preeclampsia. Her pregnancy journey and lack of adequate postpartum care inspired her to start Millie.
Sharma comes from a family of doctors, has worked in healthcare for over 20 years, and understands the new approach to care.
She believes that successful exits—mergers and acquisitions and IPOs—are important to the women’s health sector because they will encourage more investors to invest in women’s health companies. “It is important for investors to see across the business environment that this group can produce winners,” he explained. “It’s the result of the show.” An enabling environment is needed for the women’s health sector to thrive, including government funding and traditional business model funding.
The multi-stage fund that invests in health care and has invested in many unicorns does not have a women’s health company in its portfolio. VCs there have told Sharma that they don’t invest in women’s health because they aren’t sure the space can hold enough companies that will go on to become unicorns.
Companies founded by women are undervalued. Sharma said that there are not enough investors competing to invest in women’s health to raise the value.
The women’s health sector is poised for significant growth and change, driven by increased awareness, technological advances, and a growing need for personalized care. VC investment in technology, along with supportive strategies and a focus on data-driven innovation, will be critical to unlocking the full potential of women’s lives and improving the well-being of women worldwide.
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