Europe’s AI Boom Is Leaving Femtech Behind

Europe's intense focus on artificial intelligence investments, if left unbalanced, risks the health outcomes of half its populace. As venture capital disproportionately floods the AI sector, innovation in women's health—an undeniably essential part of our infrastructure—is once again struggling for adequate funding.

In 2021, global femtech investment reached its peak at €1.89 billion, only to plummet to a mere €1.1 billion the following year. This decline occurred amidst a broader downturn in tech funding and a significant rush of capital towards AI. While various factors contributed to this shift—including prevailing market conditions, a waning investor appetite for risk, and the natural maturation of the sector—the sharp rise in AI funding directly coinciding with femtech's plunge clearly exposes critical issues in capital allocation.

Looking at 2023, European femtech companies secured just €164 million out of the €8.3 billion invested in healthtech. In stark contrast, across the Atlantic, US femtech startups have collectively raised €4.5 billion since 2019. Unless Europe takes immediate corrective measures, the current AI surge could drastically worsen an already pressing health crisis, potentially eroding our leadership in a sector where we once stood globally.

Presently, a striking 44% of European femtech startups have yet to secure any funding whatsoever, despite market projections indicating the European femtech market could reach €30 billion by 2032. This profound gap between market opportunity and actual investment is truly astounding.

This pattern is pervasive throughout the ecosystem. Exceptionally talented founders, offering proven solutions for conditions like endometriosis, menopause, fertility, and maternal health, are being overlooked. These are businesses with enormous market potential and the capacity to deliver high returns, yet they struggle to capture attention when competing against the newest, flashiest general-purpose AI startup that lands on investors' desks.

The irony is profound: while AI startups often attract investor interest by promising to predict future health problems, femtech founders—many of whom have already identified existing crises and developed functional solutions—are left scrambling for basic financial backing.

This perspective is far from being anti-AI; indeed, many femtech companies are actively building genuinely useful AI applications specifically for women's health. However, investors' tunnel vision for broad, general-purpose AI platforms means that specialised healthcare solutions are left to contend for leftover funds.

The Human Cost of Underfunding

There's a significant human cost involved here. The fact that capital and talent are bypassing femtech isn't just a missed investment opportunity; it represents a failure in addressing women's health needs. The average woman suffering from endometriosis faces a seven-year wait for a diagnosis. Globally, up to 70% of women with polycystic ovarian syndrome (PCOS) remain undiagnosed. While these figures highlight a global crisis, European femtech solutions are not only vital for women within Europe but also possess the potential to scale and tackle critical issues worldwide.

Far from solving these deep-seated problems, general-purpose AI, when developed without specialised healthcare insights, frequently exacerbates them. Research from UNESCO, UN Women, and other bodies consistently demonstrates that AI and large language models (LLMs) built on biased data continue to perpetuate male-default medical assumptions. This can lead to misdiagnoses, delayed treatment, and years of preventable suffering for women.

In 2024, all-female founding teams—who comprise a significant proportion of femtech entrepreneurs—received a mere 2% of global VC funding, starkly contrasted with the 84% allocated to all-male founding teams. This massive disparity has created critical gaps in women's healthcare infrastructure. As someone whose company, with an all-female senior team, secured one of Europe’s largest-ever early-stage femtech rounds this year, I have firsthand experience of just how brutal the current fundraising landscape truly is.

Europe's Fading Edge

Historically, Europe has been a leader in women's health innovation, distinguished by substantial public investment, groundbreaking startups, and prominent policy leadership in gender-sensitive healthcare. The region is home to fellow femtech pioneers such as Flo Health (UK), Clue (Germany), Natural Cycles (Sweden), and Ava (Switzerland). However, this hard-won advantage is now diminishing.

The AI bubble will undoubtedly continue its unpredictable trajectory. Femtech, on the other hand—defined as a category of products, services, and software specifically designed to address women's health and needs—is a permanent fixture. Europe's failure to recognise this puts it at risk of falling behind other regions that maintain more diversified healthtech investment strategies.

A Path Forward: Reframing and Rebalancing

To begin rectifying this problem, we need a fundamental reframing. We must acknowledge that femtech is not a niche market; it serves 50% of the global population. Pitch any other market segment with 3.9 billion potential customers, and watch VCs eager to invest. Yet, present women's health to those same investors, and you often see them checking their phones.

More tangibly, investors must balance their AI investments with support for proven healthcare solutions. This isn't just about constructing socially responsible portfolios; there is a vast, underserved market here, ripe for unlocking significant returns.

This means establishing funds specifically dedicated to femtech and actively backing more women-led investment teams, who inherently understand the problems at hand. Far from merely 'checking boxes,' women-led teams are demonstrably better at identifying femtech investment opportunities—as noted by UNESCO—offering a familiarity with the sector's challenges and solutions that their male counterparts often lack. The evidence is clear: in Europe, countries with dedicated female angel investor networks observe 27% higher early-stage funding rates for women entrepreneurs.

Policymakers also have a crucial role to play, needing to reform R&D funding structures to ensure women's health receives proportional investment. When public funding disproportionately flows into AI research, it sends a clear signal that women's health remains a secondary concern.

Europe Can Lead in Both

Europe has the capacity to be a leader in both AI and femtech; these are by no means mutually exclusive. The objective isn't to impede AI investment, but rather to ensure that femtech secures its fair share of capital allocation. If femtech isn't elevated from a niche to a necessity, history teaches us it will fall by the wayside, as it has long been critically overlooked, underfunded, and under-researched.

Femtech is not another bubble waiting to burst; women's health needs do not vanish when VCs move on to the next hype train. The choices we make now will determine whether women continue to be collateral damage in every new investment frenzy.

If Europe persists in ignoring femtech, the cost won't just be measured in lost financial returns. It will manifest in women waiting years for straightforward diagnoses, enduring untreated conditions, and suffering from problems we already possess the knowledge to prevent. Although women generally live longer than men, we spend 25% more of our lives in poor health. That is a human and economic cost that investors can no longer afford to overlook.

Karolina Löfqvistis CEO and co-founder of London-based women’s health company,Hormona. Created by a team of endocrinologists, gynaecologists, and nutritionists, Hormona is the first end-to-end solution for hormonal health, leveraging AI and at-home tests. The Hormona app is used by women in 185 countries to optimise their hormones and cycles.

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