Source: Forbes
Flo, the app helping millions of women track their cycles and reproductive health, recently reached unicorn status, raising $200 million in July 2024 for their Series C round. But like any tech star, Flo’s rise to fame has been met with polarized views and sparked a mix of applause and raised eyebrows.
The Achievement
Flo’s growth has been remarkable. With 380 million downloads and 68 million monthly active users, it has positioned itself as a major player in the FemTech landscape. The app’s focus on menstrual tracking, reproductive health, and partnerships with the United Nations Population Fund (UNFPA) to raise awareness around female health demonstrates the app’s reach and influence. Flo has also received recognition from reputable sources like TIME’s Best Inventions list and Fast Company’s World Changing Ideas list, further solidifying its importance in women’s health.
However, the spotlight on Flo has also illuminated deeper issues within the venture capital (VC) ecosystem and the FemTech sector at large. While Flo’s success should be celebrated, many argue that it highlights the structural inequalities within the VC landscape — where male founders and male investors seem to run the show even in women’s health.
The Debate: Gender and Leadership in FemTech
At the heart of the debate is the fact that Flo was founded by Dmitry and Yuri Gurski, two male entrepreneurs from Belarus. The company is also largely funded by male-dominated venture capital firms such as Founders Fund and General Atlantic. This male-led structure has led to criticism that the app, while addressing women’s health issues, may lack the crucial lived experiences of women that could provide a more nuanced understanding of these challenges.
Moreover, Flo has historically been questioned for failing to have enough women in leadership roles and therefore female representation at decision-making levels. With a predominantly male C-suite and president, there are questions around whether the company’s leadership truly represents the voices and needs of its core user base: women. Critics argue that Flo may not fully grasp the complexities of women’s health and the needs of women if the top decision makers do not include women themselves. It is a debate that has divided the Femtech community.
Data Privacy Concerns and Double Standards
Further complicating the issue is Flo’s history of data privacy breaches. In 2019, Flo was investigated by the U.S. Federal Trade Commission (FTC) for sharing sensitive user data without consent, leading to a settlement in 2021. Despite this, the company was hit with another class action lawsuit in Canada in 2024 for similar violations. Critics argue that Flo’s predominantly male leadership may have contributed to investors turning a blind eye to these issues, implying that had the company been founded by women or minority entrepreneurs, the scrutiny and consequences might have been more severe. This points to the broader problem of gender bias and double standards in VC funding, where male founders, even in women-focused industries, may receive more leniency.
The Larger VC Funding Issue
The inequalities present in Flo’s rise are emblematic of larger systemic issues in the venture capital world. According to the World Economic Forum, only 2% of VC funding went to female-founded startups in 2023. The numbers are even smaller when looking at minoritized women. In the FemTech space, Sifted states that although 70% of FemTech founders are women, male founders in the same field consistently raise more money. This disparity has been attributed to the homogeneity of decision-makers within the VC ecosystem, where white males dominate investment committees, making it more challenging for female and minority founders to break through and secure funding.
FemTech’s Growing Pains
Let’s zoom out for a second.
FemTech is still an embryonic industry (at least how we slice and dice it) and building a successful health tech company in Europe is certainly no walk in the park. Market conditions, like the lack of functional payer models (aka, figuring out who’s going to pay for your innovation), makes scaling healthcare innovations across Europe more challenging than expanding into the US. Advertising and marketing to consumers in the healthcare space is also more restricted and regulated making it difficult to reach more potential clients. So, founders — whether male or female — are battling significant obstacles just to keep their startups alive.
The lack of European FemTech unicorns goes beyond the lack of female investors or the gender biases VCs may have towards white male founders. Alice Pelton of the Lowdown highlights the need to look beyond biases and take into consideration the market conditions which results in less European FemTech unicorns.
The challenges to building a FemHealth company are very real. Overall, there is a deficiency of funding in women’s health across ALL verticals – notably for digital health companies. This goes for founders of all genders. Also, the lack of female investors applies to all markets, it is not unique to FemHealth.
Moreover, there is a large number of first time founders in FemHealth. The National Bureau of Economic Research (NBER) found that entrepreneurs with a successful past venture have a 30% chance of success in their next venture. This drops down to 18% for new entrepreneurs and 20% for entrepreneurs who have previously failed. Therefore, one could draw the conclusion that we will eventually encounter more successful founders within the FemHealth as more ventures are built.
Moving Forward: A Call for Diversity and Goddess Gaia Ventures role in plugging this gap
While Flo’s success is undeniable, many in the industry are calling for a more diverse and inclusive approach to FemTech investment. Anna-Sophie Hartvigsen of Female Invest emphasized the need for systemic change in the venture capital ecosystem, arguing that Flo’s status as the first European FemTech unicorn highlights the deeply entrenched inequalities in funding. Others, like Ida Tin, Co-Founder of Clue, notes that while it’s crucial for FemTech companies to be driven by individuals who genuinely care about women’s health, progress in the sector should still be celebrated, regardless of the founder’s gender.
As the General Partner of Goddess Gaia Ventures, Europe's only dedicated women's health fund (yes we are that rare) we recognise that Flo’s leadership team does include many women driving the product’s success, and the app has contributed to research on topics like female sexual health and pleasure — which are often overlooked and other areas that desperately need attention. That said, the fact that the company remains predominantly male-led continues to raise important concerns.
Conclusion
Flo’s unicorn status is a bittersweet triumph for FemTech. It signals that women’s health solutions are finally being recognized for their importance and profitability. But it also exposes the gender disparities that still plague the sector.
For FemTech to truly thrive, venture capital needs a serious makeover. More diversity, more equity, and a lot more women in leadership are required to ensure that the people making decisions actually understand the issues they’re addressing.
At the end of the day, what really matters isn’t the gender of the founder, but whether the product works and improves the lives of its users (clinically validated products backed by robust research and data).
Flo’s success is a win for women’s health, and any step toward closing the gender health gap (131 years!) no matter who takes it, is a step in the right direction. But if we’re serious about closing the gender health gap, we need more than just unicorns —we need real, lasting tangible change.
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