Period tracking app Flo raises $50M for an $800M valuation

The company helps women track their reproductive health from first periods to menopause

Despite the fact that more than half of the population of the US is female, startups focused specifically on their health are still considered to be a niche. And while the femtech space, which includes everything from maternal care to fertility to gynecologic care, is growing, it's still not a particularly well funded one , especially when compared to the digital health sector overall. 

"We’re living in a time where women’s health is severely under researched, underfunded, and often overlooked. Women and people who menstruate often feel under-educated as a result," said Cath Everett, VP of Product at Flo, an app for period and menstrual cycle tracking.

Flo's mission is to significantly improve the health and wellbeing of women, girls and everyone who menstruates worldwide by providing them with an app that they can use during their entire reproductive life cycle: from first periods to menopause, from pregnancy to young moms.

"We believe knowledge is the ultimate source of empowerment for women around the world. Flo aims to reshape the industry at large by democratizing access to trusted health information from a secure community of experts, helping millions of users understand their unique signs and symptoms and use this knowledge to more effectively manage their overall health."

While funding for femtech companies is still difficult to come by, Flo is bucking the trend: on Thursday, the company announced a $50 million Series B round of funding led by VNV Global and Target Global, bringing its total capital raised to $65 million. The company is now valued at $800 million. 

The London-based Flo tailors itself to each women's needs, depending on her life stage, including cycle tracking, early motherhood, pregnancy and menopause. That include users who are tracking their cycle to avoid pregnancy, those who are actively trying to conceive and would like to gain deeper cycle insights, users who are following their pregnancy with Flo, and users who recently gave birth to their child. The main use case, however, are those who are tracking their cycles and symptoms to effectively manage their overall health and better understand their bodies’ signs and symptoms.

"This particular user base includes girls and young women navigating puberty who would like to learn more about changes in their bodies, and women who simply want to know if everything is okay with their bodies," Everett explained.

The app's features includes period tracking and cycle predictions, which allows users to log over 70 symptoms and activities to get precise AI-based period and ovulation predictions. A recent update to the app now allows users to get their cycle insights including their cycle length, period length, cycle length variation, cycle history, and trends.

Flo also provides its users with a Health Assistant, which facilitates proactive user behavior, educating users based on their unique profiles and symptoms in an engaging manner. It also offers its users health insights, as well as a health report with personalized cycle graphs, and indications of their body’s patterns.

The app also features a community of women where users can have anonymous discussions with each other. 

"Flo helps its users to understand the meaning behind their bodies' signals and engages them to take a proactive role in their wellbeing and management of their overall health. The app provides users with accurate cycle predictions and insights, and a wealth of science-backed and at the same time user-friendly content," said Everett. 

"In order to uniquely meet the needs of our users, we use data science and AI to deliver the most personalized cycle predictions available for each individual and offer a wealth of resources." 

Flo is seeing some impressive numbers: over 200 million people have downloaded the app, which has been the most downloaded Health App in the AppStore for two years in a row, with 50 million downloads in 2020. The company is projecting even higher numbers in 2021. The app is used by 43 million people on a monthly basis, with over 1 billion menstrual cycles having been tracked. In the last twelve months, Flo increased its active subscribers base by 4x, reaching 1.5 million in August of this year, and the company aims to reach $100 million Annual Run Rate by the end of 2021.

Everett attributes all of the growth the company has seen to its accelerated product development.

"In August of 2020, we launched our largest product update since the app’s inception, Flo 5.0. which significantly changed user experience. This update drastically shifted the paradigm of the app in the sense that we started to look from the perspective of how we can help women be more proactive about their health, encouraging them to actively log their unique symptoms and offering them daily insights based on where they are in their cycle and what they are experiencing," she told me.

Flo plans to use the funding to grow its team, hiring 200 employees over the next year across product, engineering, R&D, data science and medical roles; this follows the company having already more than doubled its employee base to 350 in the last two years. Over half of its employees are female, including its executive leadership team and the company also offers six months paid maternity leave policy, making it an exception in the tech industry, said Everett, where "women are often underrepresented, in part due to the motherhood penalty." 

The company also plans to use the money to enhance personalization and provide users with advanced cycle insights and symptom patterns to help them effectively manage and improve their health.

The femtech space

As I mentioned earlier, femtech has been on the rise the last few years, but funding for these health startups has traditionally lagged behind and still does: in 2020, companies in the femtech space raised just $418 million in 22 deals, representing just 3% of all the funding that went to digital health. Not to mention that in the first quarter of this year, femtech raised $58 million out of $6.7 billion, and only four femtech companies raised over $2 million.

In fact, it's been so underfunded and underrepresented before that it's so-called "rise" may simply be a function of hype, said Everett. 

"Perhaps the rise is related to the fact that the category didn’t exist 10 years ago, and is now developing. A decade ago, the femtech industry attracted just $23 million in venture capital investments. By 2019, investment jumped to nearly $600 million. The growth is evident, though it is not skyrocketing in comparison to a broader health & fitness category," she told me.

That's why, as one of the successful companies in the space that has been able to raise a significant amount of capital at a high valuation, she wants Flo to lead by example, helping to clear the path for other startups in this space to follow.

"Investors and VCs are largely operating based on the existing cases, so the more positive signals the market gets, the more potential it opens up for the new startups in the space. Currently we can say that there are fewer femtech startups proportionally in comparison to startups in the health & fitness sector, and they get smaller investments," she told me. 

"The more successful cases appear in the market, the more people are encouraged to found their startup in this industry. We are honoured that Flo is a successful example that is paving the way for the new femtech products."