Early-stage European VC firm Blossom Capital is fresh from closing a $185M fund— a big jump up on its prior close. The firm makes just a handful of investments per year, mostly at the Series A stage, working very closely with founders in its portfolio, a strategy it refers to as “high conviction” investing.
One of its chosen few is Inne, a Berlin-based femtech startup that’s building a novel, hormone-tracking subscription product for fertility-tracking and “natural” contraception. The aim is to offer a high-tech alternative to taking hormones to prevent pregnancy or using an established barrier method (such as a condom).
Inne came out of stealth last fall to announce $8.8M in funding, giving us the first glimpse of the medical device it’s been working on since 2017. This test-at-home hormone tracker is slated to launch in select markets in Scandinavia this year, but at a scale akin to a limited beta. The startup said it would be iterating the product based on feedback from the first users
We chatted with Blossom Capital partner Louise Samet, who led the fund’s investment in Inne, to get the inside track on that deal and further understand how the fund thinks about femtech and the key challenges and opportunities she sees for founders building products targeted to women.
This interview has been edited for length and clarity.
TechCrunch: How does the fund approach femtech?
Samet: The way we define femtech is products that are built for women. But I think the definition of the term is not necessarily important. The more important thing is the problem the founders are focusing on solving.
We typically start from the consumer or from the user in order to understand what kind of problems they’re having. In some cases, it’s a business; in some cases, it’s a consumer.
In medications, it is a consumer, so we typically start from the consumer to understand what type of problem it is that they’re having. If we look at our investment in Inne as an example, the user is a woman with a need that persists for years. The need of a contraceptive method.
We know that great companies can come from any category, so we have a really broad perspective. We’ve looked at femtech but also enterprise, developer tools, travel, financial services, etc. So we have a really varied approach. We’re sector-agnostic.
The thing that we’ve limited our scope to is stage. So we typically invest at Series A and also do the occasional seed investment [in] Europe because that’s where our experience is the most valuable.
How many femtech pitches do you see in a typical month — if there is such a thing?
Sorry, I can’t given you an exact number. I do know it has increased rapidly over the past few years, because it is really a field that’s booming.
Do you see that as a sign more femtech startups are being founded, or is it also a case of more investors being willing to back products that are targeted mainly at women?
I think it’s a combination of both. I think this segment has been underserved for a long period of time. And that opportunity is becoming clear, both by founders but also by investors.
So I would say that ten years ago we didn’t see many people looking into those problems and now it’s more common.
You’ve just closed a big new fund. Do you expect Blossom will be investing in more femtech startups than you have to date, which, I think, is just the one to date?
So far, it’s only Inne.
The thing that differentiates us is that we have the high conviction strategy which means that we will make no more than five, maybe six investments per year. So this larger fund basically enables us to do more investments over a longer period of time. We won’t change the pace we make the investments.
And I think that there’s no one sector that we focus more in so I think that the current representation of femtech is quite reasonable of what we see. We’re only three full-time investment partners who will make five, maybe six investments per year in order to be able to have the bandwidth to have all of us work closely with the companies we invest in.
Another thing that differentiates us is that we work collaboratively on each investment that we do because we provide such different backgrounds and perspectives. So it doesn’t really make sense for an entrepreneur to have access to only one of us when we have such different perspectives going in.
We have six investment criteria. We want to back mission-driven founders using disruptive technologies with a unique user experience; potential to build a multi-billion dollar company with network effects; and technologies that have a distribution advantage and are recession proof. So those are our six check-points that we would like to cover for each investment that we do.
Do you think some male investors are still struggling to understand the femtech category?
I think it definitely helps us to have two female partners on the team.
[In the case of Inne,] we were both able to move very quickly because of our pre-understanding of the market in ways that funds with only male partners probably could not really do. It’s one of the few times that being a woman in VC actually works to your advantage.
Let’s talk about Inne: How did you first learn about the startup and what they were building and what attracted you to their pitch?
Both myself and my partner Ophelia Brown had spent significant time understanding that market, and I had a previous angel investment in the space. I personally invested in a company called Grace Health based in Sweden, and we’d seen companies like Clue and Natural Cycles come up. We knew that the solution had to have some sort of hormone test, but we didn’t really know how.
And then we learned that Eirini [Rapti, Inne co-founder and CEO] was about to start fundraising, and started talking to her and we were absolutely blown away. She’s incredibly mission-driven and focused on building something that will touch women all over the world. And that type of focus and level of ambition is something that we really love at Blossom.
So when we typically look at investments that’s one of the key things that we want to see. We want to find mission-driven visionary founders. So Eirini was just all that.
Another thing that really impressed me with Eirini and her team is their focus on design. So I think that a key to Inne’s success is going to be ease of use. Because there are a few other alternative solutions in the market, like Natural Cycles, which is based on basal body temperature. I think that one of the reasons that it’s difficult to use for users is because it’s so difficult to comply. Because a lot of the other natural contraception methods are just impossible for a regular woman in a regular life. I have two small kids. There’s not a morning I know what time I actually woke up. The sleep deviates.
Another thing is that the contraceptive market is a huge one. We can both look at the natural contraceptives or the people who are using natural methods, but if we also look at the most common contraceptive methods like the pill and IUD coil, there’s a multi-billion dollar market in the U.S. alone — so there’s a huge opportunity for the product as well.
It’s interesting that you had the hypothesis yourself and then almost went looking for the startup to fit that; how usual is that approach for Blossom?
We do work quite thematically in the way we look at companies. So we try to focus on different themes that we constantly keep up to date — where we have ideas or thoughts about how we think that the market is going to evolve. So we constantly look at which sectors and countries we prioritise and we use data science in order to find these unique gems or people to talk to. And then we spend a lot of time to validate or verify the solution and the team.
At the time of Inne’s Series A, which you led, you made a point of emphasising what you called the “scientific validity” of the product. And, as you just mentioned, the fund does a lot of work to validate ideas before investing. So what was involved in assessing Inne’s product?
As a fund it was important for us to not take a bet on science; we’re not that type of fund. That’s not the type of risk we would take — on a technology working or not. The type of investments we do are more ‘this is a product that’s coming to market, can we build something that solves the customer’s problems with a technology that’s available today?’ So we don’t do regular research and development that you would do if you were, for example, trying to find a cure for a disease.
[In Inne’s case,] we spent a lot of time reading academic papers, talking to experts in the field, and talking to regular users in order to make that assessment.
That’s really the case whenever we make an investment. We speak to experts in the field in order to ensure the validity of the solution. May it be a developer tool that uses specific technology or a femtech product partly relying on hormonal testing.
Have you ever turned down a femtech pitch because you had concerns about the validity of the scientific claims being made?
Yes absolutely.
Femtech products can appear very novel and exciting. But there can also be high personal risk involved — such as with an alternative contraception. Some of these products also may not be being directly regulated, so it’s up to the founders to self regulate to a degree. What advice do you give to femtech founders when it comes to navigating these sensitivities to avoid any risk of being seen to be exploiting women’s needs?
In our case, both Eirini and Blossom as a team really want to take things slow in order to ensure that we have the data points that we need to ensure validity before growing too fast.
I think that’s also true when looking at other product types; if you start scaling too early, you won’t be able to keep up. So we want to ensure that the product has the expected level of accuracy. Which is also part of the way we go to market in a very slow and controlled way. We work closely with industry experts to ensure that we have the data necessary.
You can’t really move fast and break things when you really risk people’s lives, so there’s definitely a different approach to scaling [this kind of femtech product] because the consequences are so severe.
So one of the things that we do is we do ask for permission instead of forgiveness. That’s the type of comparison I would use — instead of just moving fast and breaking things. That said, the current [contraception] products have very poor accuracy when it comes to both hormonal and non-hormonal methods. The pill is around 91 percent in typical use and condoms 86 percent. Those numbers are insanely bad for things that people consider so safe.
What trends do you see being hot in femtech investment over the next few years?
I think health is a super interesting area. Because I think that we have, over a long period of time, not focused on solutions for women. Most of the scientific studies that have been made have been on men. A lot of medication has not been properly tested on women, so I think that there’s a huge opportunity in building products that help women both navigate through mental well being but also both preventative care as well as care to specific diseases and health problems that one may have as well that are typical for women.
Can you give us a few examples of additional femtech startups that you think are really exciting?
Grace Health is an interesting one — that’s a company that I personally invested in. Natural Cycles is also very interesting. They’re the first mover in natural contraceptives, and I find that super interesting. There are more and more femtech startups in pleasure for women that I find very interesting as a space — connected to mental well being.
In terms of how to think about the femtech market opportunity and how to catch an investor’s eye, what general advice do you have for founders?
I think that the important thing to think about is to start from the user about which problem one is solving and see the market opportunity for that. How many people are affected by this problem?
One [also] needs to address a large enough problem that is urgent for people, so they’re actively looking for a solution.
People who have those two in combination definitely have a great opportunity of building something great.
Comment