Unlocking the trillion-dollar feminine financial system


As ladies have gained financial energy, their financial affect has expanded. Girls 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 know-how firms that handle 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 spend money on ladies completely by way of the lens of feminine founders (and we are able to’t discuss 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 know-how that solves the issues and meets the wants of feminine shoppers.

Girls ought to now not be considered a distinct segment. Actually, they’re one of the crucial vital development 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 Unimaginable Well being are only a few examples of the enduring energy of the feminine greenback.

How did ladies turn out to be a development 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 development 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 also be inextricably linked to schooling: As of 2019, nearly half of the employed feminine inhabitants ages 25-64 held a bachelor’s diploma or larger – representing a quadrupling of ladies with levels since 1970.

At the moment, 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 development continues, quickly two ladies will earn a university diploma for each one earned by a person.

Even with a persistent wage hole, these components have led to a dramatic improve in ladies’s monetary energy. American ladies management greater than $10 trillion in belongings (an quantity anticipated to triple over the following decade), pushed by a gradual upswing in workforce participation, schooling and wage development.

Girls are more and more prone 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 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”

Girls have lengthy been a goal buyer for retail and e-commerce, however the fashionable 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 firms can attribute their development to a strong and engaged feminine client base.

Many would place billion-dollar magnificence and vogue 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 client greenback drives each the acceleration of latest client manufacturers and related exercise round creators and influencers, e-commerce enablement, and provide chain.

The affect of the feminine greenback might be felt in consumer-facing classes like schooling, healthcare, meals, and monetary know-how. When eager about the feminine client, it’s extra acceptable to ask, ‘which industries should not influenced by the feminine greenback?’

Girls’s well being and wellness

Girls are the largest shoppers of healthcare based mostly on each their very own well being wants in addition to their function 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 an almost $1.2 trillion trade by 2027. Firms like Tia Well being and Kindbody have modified the consumer expertise of healthcare for girls and others like Alife and Gameto are fusing science with AI and knowledge to modernize in vitro fertilization, ovarian illness, and menopause.

The alternatives lengthen 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 wherein ladies need to take extra management over their healthcare, ladies’s well being is poised to be one of the crucial lively areas of innovation.

The care financial system

As ladies have taken on extra skilled tasks outdoors the house, their caregiving tasks 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 dad and mom 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 funds proposing $750 billion in federal assist for caregiving. Alongside this federal focus, there’s vital market alternative for know-how that makes this care extra accessible and inexpensive.

Firms like Mirza are serving to employers assist working dad and mom 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 turn out to be our most extremely educated workforce, we’ve got to determine how each care and work get completed.

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 essentially 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 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 turn out to be an accelerant to coaching and the elimination of among the extra tedious duties and reporting necessities in these jobs.

Wanting forward: Investing in ladies

At the moment, ladies are extra educated, lively within the workforce, and extra prone to begin firms 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 firms and business areas the place ladies’s wants have but to be met has the potential to unlock billions of {dollars}.

Girls ought to now not be considered a distinct segment. Actually, they’re one of the crucial vital development markets we’ve ever seen.

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