With a business proposition aimed at providing sexual wellness products, information and digital services to adult women of all ages, Brazilian femtech Feel has attracted an all-female pool of angel investors to a pre-seed round worth just over BRL 1 million ($190,000).
The investment, announced with exclusivity to FORBES, is expected to advance its product and platform development at the company, which also wants to raise awareness of the opportunities in the market were it operates among male investors.
Feel’s latest bridge round is led by Sororitê – Brazil’s largest female angel investment network with a pool of 80 investors – and is expected to close in early 2023. According to Ratton, 75% of the capital has been committed and includes follow-on investments of previous backers, with Sororitê as the lead investor.
The first angel round raised by the femtech in 2021 totaled BRL 550,000 ($102,000), whereby 84% of the funding came from female investors. With the percentage increasing to 90% in the new round, Feel claims to be the startup with the largest amount of female investors in Brazil.
According to Ratton, this is significant for a few reasons. First, there is the fact that female founders receive 4% of all the money invested in startups in Brazil, according to a study published last year by innovation hub Distrito, Endeavor and B2Mamy, a Brazilian accelerator focused on mothers. Second, the sexual wellness space is surrounded by taboos and information scarcity.
“Our segment is particularly challenging, because it address a pain relating to a taboo and a general lack of information. There are very few studies focusing on sexual wellness, even though it is a pain the majority of the Brazilian population faces in some form or another”, the founder noted.
According to Erica Stul, co-founder and investor at Sororitê, the value of Feel’s business proposition was clear to the female angel network from the outset, as the investors could fully understand the sexual wellness challenges the femtech is tackling.
“Investors tend to analyze the entrepreneur and their thesis. In this case, what Feel brings is an immediate connection to a pain that is very much connected to women’s everyday lives and that is not fully understood by male investors. It was a pitch [female backers] could relate to, and made total business sense”, the investor noted.
Moreover, Stul argued that Sororitê’s investment is also part of the network’s broader goal to contribute to a change in how capital is deployed in the Brazilian startup ecosystem.
“The angel investment stage is a gate that any startup founder will go through: we are working to bring more diversity to that point in the journey. We also support investees with smart money – with contacts and business advice as well as capital – so that they are much stronger to take their next steps”, the investor said.
Stul noted that Sororitê is working to attract more women to invest in startups. In Brazil, they account for only 16% of the angel investment community, compared to 22% in the US. “We want to create an investment track record and prove that women investing in other women delivers returns: this is about business rather than charity,” she pointed out.
Despite the various challenges faced by startups like Feel, the sexual wellness space has plenty of opportunities due to the various unmet demands from consumers. In Brazil, over 40% of women struggle to reach orgasm, while 39% suffer with pain during sexual intercourse, according to a study by the University of São Paulo produced in 2016.
At later stages in life, postmenopausal symptoms such as vaginal atrophy relating to loss of estrogen is among the sexual health issues experienced by 87% of women, according to data from Harvard Medical School, which has also found that 77% of them are uncomfortable to seek medical advice for those issues.
To address such problems, Feel launched amid the Covid-19 pandemic in 2020 with a portfolio of natural and vegan intimate products such as lubricants and soaps. In June, the company joined forces with Lilit, a femtech led by Marilia Ponte which developed a bullet vibrator. The merger followed a series of commercial partnerships among both firms and a synergistic market vision. Both startups now exist under Feel’s corporate entity and Ponte now serves as the COO of the enlarged company.
“Even though we have a business thesis that is generally discredited [by investors] we are on track to double year-on-year revenue and meet the business goals in a sustainable manner”, she added. Ratton does not disclose Feel’s sales figures, but said production volume is now four times greater than in January 2021.
Prior to the merger, Lilit disclosed its sales performance: in just under two years of existence, the vibrator manufacturer now operating under Feel generated around BRL 2 million in sales with a single product.
The new capital raised by Feel will go towards launching new products and investing in the development of a digital platform with content aimed at teaching women how to use the product range, thus enhancing the customer experience.
According to Ratton, the creation of this platform is the first step towards the creation of a portfolio of digital sexual wellness services provided by specialists. The firm’s own research with both Feel and Lilit’s base suggests that 40% of consumers would like to get access to sexual health and wellness specialists.
“We still have some way to go when it comes to services: our priority is to address the various pain points with an information journey, [the introduction of digital services] is still part of our ambition, but we are going to prioritize the platform and product launches for now”, the founder noted.
In a year’s time, the entrepreneur expects that her company will be fully focused on developing its sexual wellness ecosystem, but also inching closer to raising a seed round. Similarly to other Brazilian femtechs that have raised rounds in recent months such as Oya Care and Bloom Care, which are focused on digital healthcare for women, Ratton would like to attract capital from international investors.
“At the same time, it would be great to be able raise a seed round predominantly in Brazil, given the significant symbolic value that would have to the femtech ecosystem”, Ratton noted.
Conversely, the founder wants to shift paradigms by evangelizing investors – particularly men operating in the venture capital space – about the opportunities of the sexual wellness market, which is estimated to reach $112bn by 2030, according to data from Market Research Future.
“We will be doing our homework and developing the business, while also educating male investors that this is a market seeing exponential growth,” she concluded.