Kate Ryder says that when she was first raising money for Maven Clinic, an on-demand digital care clinic for women and families, the friends-and-family round came together "pretty easily." But that was 2014, and Ryder was in London.

By 2016, Ryder and her company were both based in the U.S. She thought the pitch that helped her raise money in London would be persuasive in the U.S., too.: Health care is one of the largest industries in the country. Women control 80 percent of a family's health care spend. Ryder says Millennial women spend 70 percent more on health than Millennial men. 

The response: Women are a niche market.

"It was this weird phenomenon," says Ryder, Maven's CEO. "I was just banging my head against the wall." The lead investor for her Series A was a woman, pregnant at the time, who took on the task of explaining, and championing, the opportunity to her partnership. Maven's Series B was led by two women venture capitalists. But in 2020, when Ryder raised her Series C, things were different. "Finally, there is a genuine interest in our category across the board," she says. "It's not just women investors who understand the problem."

In a year that set records for health care-related investments, women entrepreneurs did especially well. A new report from Female Founders Fund, an early-stage venture fund that invests exclusively in women entrepreneurs, sums up the good news: The year 2020 saw big investments into later-stage women-led health care companies, a spate of newly public biotech companies run by women, and promising signs of increased investments into earlier-stage companies.

The big wins are all the more impressive coming in a year in which overall funding to women entrepreneurs dropped by about 27 percent. Anu Duggal, founding partner of Female Founders Fund, calls the overall drop "definitely not surprising," noting that with schools closed and child care unreliable, the burden of managing a family still fell on women--even those running venture-backed companies with hundreds of employees.

"Venture capitalists right now are really excited about the consumerization of digital health," says Duggal. "Digital health is the new direct-to-consumer." And while there's certainly promise in broad-based telehealth companies, there are also specific types of health care that have been underserved by the current system: cancer patients, women's health, addiction, fertility, and mental health among them.

Among the big money going to women-led companies: Cityblock Health, a health-tech platform for marginalized communities, raised $160 million in December 2020, then followed up with another $192 million in March 2021. Home-testing company Everlywell raised $175 million in December. 23andMe raised $83 million in December and is planning to go public via a SPAC run by Virgin Group's Richard Branson. Four biotech companies with women CEOs went public in 2020. Early-stage funding looks good too: Female Founders Fund counts 32 New York City-area women-led companies that raised Series A rounds in 2020, and of those companies, 10 were in health care. Some 54 women raised A rounds in the San Francisco Bay Area, and eight of those are in health care.

Emily Melton, managing partner at investment firm Threshold, suggests that an earlier wave of New York-based health care companies is playing a role in the current boom. In the same way that PayPal and others created groups of strong employees who went on to build successful businesses, people with experience at companies such as Capsule, Oscar, and Flatiron Health are now becoming founders, "and it happened that those companies hired some really great women," says Melton.

Even after the threat of the pandemic has passed, Nancy Brown, general partner with investment firm Oak HC/FT, expects to see interest in telehealth stay high, guessing that maybe 30 percent of appointments will remain virtual. More important, "the learning has been amazing," she says, noting that care delivered virtually in fields such as mental health has shown strong results. "We have forever advanced virtual health care."

The realization that women are an underserved market within health care--and that women are often exactly the ones who can fix that situation--has been surprisingly recent. Women control 80 percent of the health care spending in a household, taking charge of their own care, that of their children, and, in heterosexual couples, that of their partner. That's not news, but it seems to have gained more power recently. "The tailwind, and the thing that is new, is the realization that we shouldn't have one-size-fits-all medicine," says Carolyn Witte, co-founder and CEO of Tia, a women's health care platform. Last May, Tia raised $24 million, which Witte says is the largest A round raised by a woman CEO in 2020. "If you want to make a bet on personalized care, women are the smartest bet to make," says Witte.

Says Brown: "If there is ever a group of people who would reject the notion of taking a day off just to see the doctor, and staying on the phone with an insurance company's nurses, it's Millennial women."