by Vanessa LarcoMar 20, 2019
One of the things that has excited me the most in the two and a half years since becoming a venture capitalist is the rise of femtech. Femtech is the fast-growing category of products and services designed to improve women's health and wellbeing, from fertility and reproductive health, to smart breast pumps and breast milk delivery, to mental health and general wellness and everything in between. The term femtech was coined by Ida Tin, founder and CEO of period tracking app Clue, right around when I was starting at NEA in 2016.
At the same time the femtech movement was taking off, I became pregnant with my first child. I quickly discovered the depths of inadequacy in women's health and maternity. I was discouraged by how little time I received from my healthcare providers, and I had a nearly endless list of unanswered questions with no reliable source to turn to. I am lucky to have great insurance and a supportive employer; I can only imagine how difficult parenthood is for mothers everywhere. I dedicated my maternity leave to meeting as many femtech startups improving parenting and women’s health as possible.
I created a detailed map of the market and set out meeting companies across the landscape. It was during this process I first met Shannon Spanhake, co-founder and CEO of Cleo. I was impressed right away with the dedication of the team, the complete and dynamic product, and substantial traction in the market. It was clear to me that this was a company and a mission that we wanted to be a part of. I am excited to announce today that NEA has led a $27.5 million Series B investment in Cleo.
After evaluating the full femtech landscape, what excites me the most about Cleo is how the company acts as the linchpin of the entire ecosystem.
Cleo is an all-in-one family support system, helping navigate the complexities of parenthood, from fertility all the way through childhood, picking up where the healthcare system ends. If we were to use an enterprise technology analogy, Cleo is the enabling platform sitting atop the parenting stack, managing your full suite of parenting services—the Salesforce of parenthood. The Cleo platform puts in-depth content, community and a global network of certified practitioners at a parent’s fingertips—each a different service plugging into the parenting stack. Every parent is given a dedicated Cleo Guide who connects the dots across the stack, ensuring you access the right service at the right time. This one-on-one, tailored experience, combined with the ability to support parents starting at fertility, all the way through early childhood, makes Cleo the most complete parenting support system in the market.
The growing femtech ecosystem is one megatrend Cleo is tapping into, a second is a growing desire from corporations to attract, retain and support diverse talent. Pregnancy and parenthood is a defining moment in an employee’s career; it's also an area where companies have long under-supported their employees. That’s why forward-thinking businesses are partnering with Cleo. It's a win-win for both employee and employer, the working parent is happier, less stressed, and better able to meet their family goals, and the company is less likely to lose a valued employee—Cleo moms return to work at a higher rate than the national average. Cleo also reduces costs associated with expensive pregnancy-related healthcare claims, as Cleo mothers are below the U.S. averages on c-section rates, pre-term babies, and are more likely to breastfeed.
Cleo’s b2b2c model has enabled the company to scale faster than anyone else in the parenting space. More than 475,000 employees across 50 countries now have access to the platform. Brands like eBay, Slack, Straus Creamery, and Uber are now all offering Cleo to their employees. The need is so profound, an impressive list of industry-leading executives have personally invested in Cleo, including Chip Bergh, CEO of Levi’s, Jeff Immelt, former CEO of GE and current NEA venture partner, Aaron Levie, CEO of Box, Marissa Mayer, former CEO of Yahoo!, and Jeff Weiner, CEO of LinkedIn.
Femtech companies have raised more than $1 billion since 2014, topping $400 million in 2018 alone. I am certain it is not a coincidence that investment in femtech has grown as more females have been hired as investors over the same span. In fact, Frost & Sullivan estimates femtech to be a $50 billion category by 2025—and Cleo will be the platform on which it all sits.
I am proud to join the board of Cleo and am looking forward to helping grow the entire femtech ecosystem, improving women’s health and making the journey through parenthood easier for working parents everywhere. I expect this to be the first of many investments.