As ladies have gained financial energy, their financial affect has expanded. Girls lengthy held main buying accountability for on a regular basis home goods, however at present, they management or affect 85% of shopper spending.
I based Cake Ventures as a enterprise capital agency that invests in expertise firms that tackle our world’s quickly altering demographics.
My thesis is made up of three layers of demographic change: ageing and longevity; the shift to ‘majority-minority’ the place the web is pushed by a inhabitants of tech adopters from Asian, Black and Latino backgrounds; and womens’ elevated incomes and spending energy.
Many traders consider alternatives to put money into ladies solely by way of the lens of feminine founders (and we will’t speak concerning the alternative in feminine shoppers with out acknowledging the dismal funding numbers for feminine founders), however there’s a parallel alternative within the feminine financial system — investing in expertise that solves the issues and meets the wants of feminine shoppers.
Girls ought to not be considered a distinct segment. In actual fact, they’re one of the vital vital progress markets we’ve ever seen.
This cohort is already driving firms to multi-billion-dollar outcomes in ladies’s well being, e-commerce, the care financial system and different classes. The decacorn valuation of SHEIN and the billion-dollar (or extra) valuations of Maven Well being, Faire, and Unbelievable Well being are just some examples of the enduring energy of the feminine greenback.
How did ladies change into a progress market?
At the moment, ladies make up roughly half of the U.S. working inhabitants and, when adjusted for self-employment, are the brand new workforce majority. A lot of this progress was pushed by positive factors within the retail and healthcare sectors, industries that make use of extra ladies and are closely influenced by feminine spending energy.
The rise in feminine employment can be inextricably linked to schooling: As of 2019, nearly half of the employed feminine inhabitants ages 25-64 held a bachelor’s diploma or greater – representing a quadrupling of ladies with levels since 1970.
At the moment, ladies make up 59.5% of school college students and whilst enrollment in U.S. universities is declining, males account for 71% of that decline. If this pattern continues, quickly two ladies will earn a university diploma for each one earned by a person.
Even with a persistent wage hole, these elements have led to a dramatic enhance in ladies’s monetary energy. American ladies management greater than $10 trillion in property (an quantity anticipated to triple over the following decade), pushed by a gradual upswing in workforce participation, schooling and wage progress.
Girls are more and more more likely to be the first bread-winner, monetary contributor, and head of family, making 85% of day-to-day spending choices and 80% of healthcare spending choices for the household.
4 key funding themes
The tempo of ladies’s financial exercise has elevated throughout each class. This impacts not simply shopper classes like magnificence, attire, and family items, however can be altering who turns into main purchasers of housing, customers of monetary merchandise like bank cards and mortgages, and decision-makers within the office.
There are 4 main classes through which the wants of ladies have pushed the acceleration of their shopper {dollars}:
The “tremendous shopper”
Girls have lengthy been a goal buyer for retail and e-commerce, however the fashionable feminine shopper – a “tremendous shopper” – exerts way more affect over the financial system than ever earlier than. Plenty of privately held unicorns and multi-billion-dollar market cap public firms can attribute their progress to a robust and engaged feminine shopper base.
Many would place billion-dollar magnificence and trend manufacturers like Skims, SHEIN, and Savage x Fenty into the class of firms pushed by feminine consumption. Dig deeper, and also you’ll see the feminine shopper greenback drives each the acceleration of recent shopper manufacturers and related exercise round creators and influencers, e-commerce enablement, and provide chain.
The affect of the feminine greenback will be felt in consumer-facing classes like schooling, healthcare, meals, and monetary expertise. When enthusiastic about the feminine shopper, it’s extra applicable to ask, ‘which industries are usually not influenced by the feminine greenback?’
Girls’s well being and wellness
Girls are the most important shoppers of healthcare based mostly on each their very own well being wants in addition to their position as main healthcare decision-makers for his or her households. “Femtech” is now a widely known class of healthcare innovation, reaching $16 billion in funding as of Q3 2022, and is estimated to be a virtually $1.2 trillion business by 2027. Corporations like Tia Well being and Kindbody have modified the person expertise of healthcare for ladies and others like Alife and Gameto are fusing science with AI and knowledge to modernize in vitro fertilization, ovarian illness, and menopause.
The alternatives prolong to maternal well being, psychological well being, and at-home diagnostics – all areas that can see accelerated innovation within the coming years. In a post-Roe world and one through which ladies need to take extra management over their healthcare, ladies’s well being is poised to be one of the vital energetic areas of innovation.
The care financial system
As ladies have taken on extra skilled obligations exterior the house, their caregiving obligations haven’t decreased. Dismissing caregiving as “ladies’s work” has allowed the class to go ignored and under-invested even within the wake of rising numbers of male caregivers and the flood of ageing mother and father who will make new caregivers of many people.
Caregiving grew to become a political speaking level throughout the 2020 election and the Biden Administration put forth a 2024 price range proposing $750 billion in federal assist for caregiving. Alongside this federal focus, there may be vital market alternative for expertise that makes this care extra accessible and inexpensive.
Corporations like Mirza are serving to employers assist working mother and father with caregiving subsidies that lower childcare-related absences. There’s a huge alternative to construct options that alleviate the monetary burden of caregiving, assist each skilled and household caregivers, and make care extra accessible and inexpensive for everybody. As ladies change into our most extremely educated workforce, we’ve to determine how each care and work get performed.
Girls at work
Through the pandemic, ladies in skilled careers took up the instruments of hybrid and distant work which have since reshaped the trendy office. It’s these skilled ladies who’ve been driving the demand for rising applied sciences and platforms basically shifting the return to work. The way forward for non-white collar work is especially related to ladies in classes like schooling, service jobs, healthcare, {and professional} caregiving. Labor marketplaces like ShiftMed and Vivian Well being emerged to fill healthcare job shortages, specializing in totally different facets of the expert clinician job market. As applied sciences like synthetic intelligence drive the evolution of white-collar work, the non-white collar jobs the place ladies are concentrated will discover AI to change into an accelerant to coaching and the elimination of among the extra tedious duties and reporting necessities in these jobs.
Trying forward: Investing in ladies
At the moment, ladies are extra educated, energetic within the workforce, and extra more likely to begin firms than ever earlier than. Nonetheless, there may be a lot progress to be made in harnessing their financial energy. This hole is the alpha alternative for traders.Investing in each women-led firms and industrial areas the place ladies’s wants have but to be met has the potential to unlock billions of {dollars}.
Girls ought to not be considered a distinct segment. In actual fact, they’re one of the vital vital progress markets we’ve ever seen.
This white paper comprises extra of Cake Ventures’ analysis on demographic change.
