Unlocking the trillion-dollar feminine financial system

As ladies have gained financial energy, their financial affect has expanded. Ladies lengthy held main buying accountability for on a regular basis home items, however immediately, they management or affect 85% of client spending.

I based Cake Ventures as a enterprise capital agency that invests in expertise companies that handle our world’s quickly altering demographics.

My thesis is made up of three layers of demographic change: growing older 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 spend money on ladies completely by way of the lens of feminine founders (and we are able to’t talk about the chance in feminine customers 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 customers.

Ladies ought to now not be considered a distinct segment. The truth is, they’re probably the most important development markets we’ve ever seen.

This cohort is already driving companies 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 Unimaginable Well being are just some examples of the enduring energy of the feminine greenback.

How did ladies develop into a development market?

Right now, 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 development was pushed by good points 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 also be inextricably linked to training: As of 2019, nearly half of the employed feminine inhabitants ages 25-64 held a bachelor’s diploma or increased – representing a quadrupling of ladies with levels since 1970.

Right now, ladies make up 59.5% of faculty college students and at the same time as 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 improve 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, training and wage development.

Ladies are more and more prone to be the first bread-winner, monetary contributor, and head of family, making 85% of day-to-day spending selections and 80% of healthcare spending selections for the household.

4 key funding themes

The tempo of ladies’s financial exercise has elevated throughout each class. This impacts not simply client classes like magnificence, attire, and family items, however can also 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 wherein the wants of ladies have pushed the acceleration of their client {dollars}:

The “tremendous client”

Ladies have lengthy been a goal buyer for retail and e-commerce, however the trendy feminine client – a “tremendous client” – exerts way more affect over the financial system than ever earlier than. Numerous privately held unicorns and multi-billion-dollar market cap public companies can attribute their development to a robust and engaged feminine client base.

Many would place billion-dollar magnificence and trend manufacturers like Skims, SHEIN, and Savage x Fenty into the class of companies pushed by feminine consumption. Dig deeper, and also you’ll see the feminine client greenback drives each the acceleration of recent client manufacturers and related exercise round creators and influencers, e-commerce enablement, and provide chain.

The affect of the feminine greenback could be felt in consumer-facing classes like training, healthcare, meals, and monetary expertise. When serious about the feminine client, it’s extra acceptable to ask, ‘which industries aren’t influenced by the feminine greenback?’

Ladies’s well being and wellness

Ladies are the most important customers of healthcare primarily based 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 well known class of healthcare innovation, reaching $16 billion in funding as of Q3 2022, and is estimated to be a virtually $1.2 trillion trade 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 may see accelerated innovation within the coming years. In a post-Roe world and one wherein ladies wish to take extra management over their healthcare, ladies’s well being is poised to be probably the most 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 growing older dad and mom who will make new caregivers of many people.

Caregiving grew to become a political speaking level through the 2020 election and the Biden Administration put forth a 2024 finances proposing $750 billion in federal help for caregiving. Alongside this federal focus, there’s important market alternative for expertise that makes this care extra accessible and reasonably priced.

Corporations like Mirza are serving to employers help working dad and mom with caregiving subsidies that lower childcare-related absences. There’s a large alternative to construct options that alleviate the monetary burden of caregiving, help each skilled and household caregivers, and make care extra accessible and reasonably priced for everybody. As ladies develop into our most extremely educated workforce, we’ve to determine how each care and work get performed.

Ladies at work

Throughout the pandemic, ladies in skilled careers took up the instruments of hybrid and distant work which have since reshaped the fashionable 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 training, service jobs, healthcare, {and professional} caregiving. Labor marketplaces like ShiftMed and Vivian Well being emerged to fill healthcare job shortages, specializing in completely different features of the expert clinician job market. As applied sciences like synthetic intelligence pressure the evolution of white-collar work, the non-white collar jobs the place ladies are concentrated will discover AI to develop into an accelerant to coaching and the elimination of a few of the extra tedious duties and reporting necessities in these jobs.

Trying forward: Investing in ladies

Right now, ladies are extra educated, energetic within the workforce, and extra prone to begin companies than ever earlier than. Nonetheless, there’s a lot progress to be made in harnessing their financial energy. This hole is the alpha alternative for traders.Investing in each women-led companies and industrial areas the place ladies’s wants have but to be met has the potential to unlock billions of {dollars}.

Ladies ought to now not be considered a distinct segment. The truth is, they’re probably the most important development markets we’ve ever seen.

This white paper accommodates extra of Cake Ventures’ analysis on demographic change.