As women have gained economic power, their economic influence has expanded. Women have long had primary purchasing responsibility for everyday household items, but today they control or influence 85% of consumer spending.
I found Cake companies as a venture capital firm that invests in technology companies that respond to the rapidly changing demographics of our world.
My thesis consists of three layers of demographic change: aging and longevity; the shift to “majority-minority” where the internet is driven by a population of tech adopters of Asian, Black, and Latino backgrounds; and the increased earning and purchasing power of women.
Many investors evaluate opportunities to invest exclusively in women through the lens of female founders (and we can’t talk about female consumer opportunities without acknowledging the dismal investment numbers for female founders), but there is a parallel opportunity in the female economy – investing in technology that solves the problems and meets the needs of female consumers.
Women should no longer be seen as a niche. In fact, they’re one of the most important growth markets we’ve ever seen.
This cohort is already leading companies to multibillion-dollar results in women’s health, e-commerce, the healthcare economy and other categories. The decacorn rating of SHE IN and the billions (or more) of valuations Mave Health, HonestlyAnd Incredible health are just a few examples of the staying power of the female dollar.
How did women become a growth market?
Today, women make up about half of the U.S. workforce and, adjusted for self-employment, make up the new majority of the workforce. Much of this growth was driven by gains in retail and healthcare, sectors that employ more women and are heavily influenced by women’s purchasing power.
The rise in women’s labor force participation is also inextricably linked to education: as of 2019, nearly half of the working female population aged 25–64 held a bachelor’s degree or higher – representing a fourfold increase in the number of women with a degree since 1970.
Today, women make up 59.5% of college students, and while enrollment in US universities is declining, men are responsible for 71% of that decline. If this trend continues, soon two women will earn a college degree for every man a man has.
Even with a persisting pay gap, these factors have led to a dramatic increase in women’s financial power. American women hold more than $10 trillion in assets (an amount expected to triple over the next decade), driven by steady increases in labor force participation, education and wage growth.
Increasingly, women are the main breadwinner, financial contributor and head of the household, making 85% of day-to-day spending decisions and 80% of family health care expenditures.
Four major investment themes
The pace of women’s economic activity has increased in every category. This not only affects consumer categories such as beauty, clothing and housewares, but also changes who will become the top home buyers, users of financial products such as credit cards and mortgages, and decision-makers in the workplace.
There are four main categories in which women’s needs have driven the acceleration of their consumer dollars:
The “super consumer”
Women have long been a target for retail and e-commerce, but the modern female consumer – a “super-consumer” – is exerting much more influence on the economy than ever before. A number of non-publicly traded unicorns and multi-billion dollar public-capitalization companies can attribute their growth to a powerful and engaged female consumer base.
Many would put billion-dollar beauty and fashion brands like Skims, SHEIN, and Savage x Fenty in the category of businesses driven by female consumption. Dig deeper and you’ll find that the female consumer dollar is driving both the acceleration of new consumer brands and the associated activity around creators and influencers, e-commerce enablement, and the supply chain.
The influence of the female dollar can be felt in consumer-facing categories such as education, healthcare, nutrition and financial technology. When we think of the female consumer, it is better to ask: ‘which industries are not affected by the female dollar?’
Women’s health and wellness
Women are the largest consumers of health care based on both their own health needs and their role as decision makers in primary health care for their families. “Femtech” is now a widely recognized category of healthcare innovation, with $16 billion in investment as of Q3 2022, and estimated to be a nearly $1.2 trillion industry by 2027. Companies such as Tia Health And Sincerely have changed the user experience of health care for women and others A life And Gameto combine science with AI and data to modernize in vitro fertilization, ovarian disease and menopause.
The opportunities extend to maternal health, mental health and home diagnostics – all areas where accelerated innovation will occur in the coming years. In a post-Roe world where women want to take more control of their health care, women’s health is poised to become one of the most active areas of innovation.
The healthcare economy
As women have taken on more professional responsibilities outside the home, their caring responsibilities have not diminished. The labeling of caregiving as ‘women’s work’ has left this category ignored and underinvested, even in the wake of the increasing number of male carers and the influx of aging parents who will become new carers for many of us.
Healthcare became a political talking point during the 2020 election, and the Biden administration came up with a 2024 budget that proposed $750 billion in federal aid for healthcare. In addition to this federal focus, there is a significant market opportunity for technology that makes this care more accessible and affordable.
Companies like Mirza help employers support working parents with caregiving subsidies that reduce childcare-related absenteeism. There is a huge opportunity to build solutions that ease the financial burden of informal care, support both professional and informal caregivers and make care more accessible and affordable for all. As women become our most highly educated workforce, we need to figure out how both care and work are done.
Women at work
During the pandemic, women in professional careers seized the tools of hybrid and telecommuting that have since reshaped the modern workplace. It is these professional women who have driven demand for emerging technologies and platforms, fundamentally shifting the return to work. The future of non-white-collar work is particularly relevant for women in categories such as education, service jobs, health care and professional care. Labor markets such as Shift Med And Viviane Health emerged to fill health care job shortages, focusing on various aspects of the job market for skilled clinicians. As technologies such as artificial intelligence force the evolution of white-collar workers, the non-white collar jobs where women are concentrated will discover AI as an accelerator for training and the elimination of some of the more tedious tasks and reporting requirements in these jobs.
Looking ahead: Investing in women
Today, women are more educated, active in the labor market, and more likely to start businesses than ever before. Yet there is still much progress to be made in harnessing their economic power. This gap is the alpha opportunity for investors. Investing in both women-led businesses and commercial areas where women’s needs have not yet been met can generate billions of dollars.
Women should no longer be seen as a niche. In fact, they’re one of the most important growth markets we’ve ever seen.
This white paper features more of Cake Ventures’ research on demographic change.
