All Access

Health Tech Deals

Health Tech Deals Alerts

Alert

Standard

Health Tech Deals Thought Bubble

Thought Bubble

mustard

BFD Expert Voices - Health Tech Deals

BFD Expert Voices

FemTec Health claims it is "revolutionizing women’s health care" through its state-of-the-art digital tools that offer a snapshot of a woman’s health.

Yes, but: After acquiring five companies, FemTec is struggling to deliver on its mission and vision — and that has led to allegations the founder has misrepresented its financial and operational status and failed to pay several vendors, Erin writes in an Axios investigation. 

The founder, Kimon Angelides, confirms much of Erin's reporting and acknowledges in an interview the company has run into growing pains amid a tough market.

Details: According to 16 current and former FemTec employees and decision-makers, investors, independent contractors and customers who spoke with Erin, Angelides has overstated the company’s progress and misrepresented its investor base. 

He has also let down customers who say products don’t work as they should, 10 people, including current and former FemTec employees, vendors and customers, told Erin.

This story includes a review of documents including internal company documents, emails, invoices, Slack and text messages and public records.

Three people including a former employee, an investor and a customer spoke to Erin on the record. Thirteen other sources requested anonymity out of fear of retaliation. 

Angelides, a high-profile entrepreneur and serial health care founder, is known throughout the digital-health community for creating the devices used by diabetes-focused startup Livongo, which merged with Teladoc last year in a record-breaking $18.5 billion deal.

In the interview, Angelides said he and the company are trying their best amid challenging market circumstances. 

"I think we probably underestimated the amount of effort it takes to merge companies," Angelides said. "It’s a lot harder than we probably thought it was."

Why it matters: Historically underfunded, women-centered health tech has become an increasingly lucrative sector of digital health as social change becomes more entwined with investment. 

In recent years, the industry has witnessed something of a halo effect, with new entrants hitching their wagons to rising women’s health tech stars.

1 big thing: FemTec isn't delivering on its mission

Illustration of a collage of FemTec Health's logo, money, medical diagrams and anonymous women.

Illustration: Shoshana Gordon/Axios. Logo: FemTec Health

Between October 2019 and September 2022, FemTec raised $38 million and acquired five startups, including subscription beauty startup Birchbox and Ava Women, the developer of an FDA-cleared fertility tracking wearable. 

Why it's the BFD: FemTec was envisioned as the launchpad for a one-stop women's health shop, housed under a consumer-facing brand called Awesome Woman, Angelides told the press including Erin in February.

In Birchbox-like subscription boxes, Awesome Woman sold diagnostics, 24/7 telehealth visits, FDA-cleared devices that came with community support in the form of private Facebook groups, along with supplements and beauty products, Angelides said in February. 

Awesome Woman’s tests and supplements were developed by FemTec while telehealth services were provided by a startup called Reliant, per Angelides. 

In July, FemTec acquired fertility company Ava with plans to sell its FDA-cleared fertility trackers, which advertised membership in private Facebook groups as a core component of the product through which customers could access science-backed content and support. 

What’s happening: Vendors, former employees and contractors tell Erin FemTec stopped paying them in July, just around the time the company acquired Ava. Angelides acknowledged not paying vendors on time, but would not confirm exact amounts.

"It’s unfortunate," Angelides told Erin. "I probably would have done some things differently. We intend to pay all of them ASAP, hopefully by end of October and certainly the minute we get outside investment."

According to invoices, emails and three current and former employees, FemTec owes Facebook parent company Meta more than $527,000 in paid social media advertisements for Birchbox, which it acquired last fall. 

Per invoices, emails and three additional sources, FemTec owes contractors and vendors more than $66,000 for advertisements, content, and social media moderation for Awesome Woman.

Zoom in: Zoe Mathews, a former Ava employee who continued to work for the company after it was acquired by FemTec, says she is owed $3,900.

Mathews, a moderator for Ava’s private Facebook support groups who interacted with 20,000 daily users of Ava, stopped receiving payments in July.

In invoices and emails reviewed by Axios, Mathews sent three invoices for $1,300 each in July, August and September. She has not yet been paid despite repeated emails to the company and gave notice that she was quitting in September.

Mathews expressed concern to Erin about the future of Ava as a FemTec company. Her job as a moderator and manager of eight other volunteer moderators was to provide science-based information about fertility and the Ava device and to address conflicts in the groups as they come up. 

Despite being contracted to moderate the groups, no one from FemTec expressed interest in how the groups were run or facilitated, she says. 

“FemTec is still selling this device … and still advertising that members get access to these experts in their communities as part of the deal with buying Ava.”

2. The BFD: After raising $38M, FemTec isn't paying vendors

Illustration of a woman in a hospital gown made from a one hundred dollar bill sitting on an examination bed.

By the numbers: Angelides last fall told reporters FemTec had 10 million members. 

The 10 million figure was misrepresentative, five former and current employees say. It was an aggregate of the social media followers each of FemTec's acquisitions — Birchbox, Mira Beauty and Liquid Grids — had at the time they were acquired. 

In an interview with Erin for this story, Angelides denied providing that figure, saying the company has "1.7 million members in the community that came through Liquid Grids," adding, "and we've built a community of 150,000 women in menopause, maybe 200,000."  

Internal company documents seen by Axios show Awesome Woman currently has 25 subscribers as of September.

Yes, and: FemTec, which per PitchBook data had roughly 82 employees as of Oct. 3, laid off seven people in July, five current and former employees said. 

Angelides confirmed to Erin that the company laid off "some people," but declined to specify the number.  

In September, the company furloughed another 16 people, telling them they couldn't work until the company secured another funding round, the people said. Angelides confirmed a furlough but did not specify the number of employees affected. 

Between the lines: Per internal company documents, six sources and Angelides himself, all of the $38 million FemTec raised came from: 

Angelides’ venture firms Ithaca LifeSciences and HellasMed LLC —both of which were formally dissolved in June due to tax forfeiture, public filings show —  and business partner Anan Anabtawi of Longmont Capital, putting the company under pressure to secure outside investment.

 "Right now we’re the only investors, me and my partner," Angelides confirmed to Erin. "We haven’t taken any outside investment." 

Angelides said the firms are not dissolved but rather expired and can be reinstated for a fee. 

Longmont did not respond to a request for comment. 

Yes, but: The company’s cap table sports big names, including Estée Lauder, Viking Global and Headline — per PitchBook and several press articles —  despite the fact that, as Angelides confirmed, FemTec as an entity has not received any outside investment.

Rather, all three of the above investors were attached to the companies FemTec acquired, spokespeople for the firms told Erin.

Angelides denied characterizing the firms as investors — but emails, drafts of press releases and internal company documents show he repeatedly approved such language.

In an email to Erin, Estée Lauder executive director of global communications Marki Zabar said, “We have not and did not invest in FemTech [sic].” 

Zabar in September also reached out directly to FemTec and asked to have Estée Lauder’s name removed from PitchBook, per an email viewed by Axios.

A spokesperson for Viking Global told Erin, "Our interest in FemTec was only through the Birchbox acquisition."

“Headline invested in a company called Mira in 2018, which was then acquired by FemTec last year,” a spokesperson for Headline (formerly e.Ventures) told Erin. 

On PitchBook and in press articles, Shiseido Venture Partners, Biobrit and Trinity Capital are also listed as investors. None responded to repeated requests from Axios for comment.

3. Between the Awesome Woman lines

Illustration of a female symbol and a red cross merged together.

FemTec lacks a board, according to six current and former employees, leaving it vulnerable to the whims of Angelides. 

Why it matters: These six people described him as mercurial, prone to bouts of aggression, and excited about new ideas but failing to follow through on older concepts and projects — including uniting the companies he purchased. 

“Originally I thought it was smart,” said one former employee. "[FemTec] talked about subscription boxes for menopausal women. Then it went from that idea to skin care boxes and all this weird stuff — there was no blueprint to anything.”

Angelides confirmed to Axios that the company lacks a board but said he intended to create one "when we get the first investment," he said. The executive said the company has a group of advisers comprising eight women in academia and industry but did not provide further detail. 

What they're saying: Five sources said Angelides could turn against employees for unclear reasons, suddenly blocking them out of meetings and not responding to emails or messages.

In emails and messages reviewed by Axios, Angelides could strike a patronizing tone, sometimes characterizing people's contributions as worthless or a waste of time.

Angelides would sometimes shut down important discussions including about the company’s finances and acquisitions, five sources said.

Between the lines: In emails seen by Axios, Angelides directed staff not to post any social media related to the Supreme Court's reversal of Roe v. Wade. Days after issuing the directive, he shared his own post about the decision on LinkedIn.

"He plays favorites," said one former employee. "If he doesn’t like someone he’ll make them feel stupid."

Another former employee went so far as to characterize Angelides' actions as "verbally abusive," and yet another said he used the company "as a power trip to control people."

When asked about these allegations, Angelides denied prohibiting employees from posting publicly about the Roe reversal. He did not comment on characterizations of his managerial or leadership style. 

4. Frustrated employees

Illustration of the female icon made of a money pattern

Some Awesome Woman subscribers told Erin they were left without a robust customer service offering, which was problematic when issues with the products surfaced.

Awesome Woman sells a bevy of at-home diagnostics including a vaginal microbiome test, hormone panels, and a test for bacterial vaginosis (BV), according to internal company documents seen by Axios, on Awesome Woman’s website, and in multiple press articles. 

“The platform offers science-based products like supplements, probiotics, vitamins and powders, diagnostic tests, plus unlimited telehealth services and a 24/7 pharmacy prescription service, direct to her door,” per a March article in Forbes.

Yes, but: Customers and former employees say their tests either didn’t return results or didn’t spot infections such as BV. 

“There was no product other than probiotics,” says one former employee.

One customer who shared their results with Erin tested positive for BV at the doctor and took an Awesome Woman BV test the next day. The Awesome Woman test came back negative, photographs and screenshots reviewed by Axios show.

Meanwhile, several dozen customers have recently posted complaints and concerns on the public Facebook pages of two FemTec acquisitions, Birchbox and Ava Women, which FemTec acquired in November 2021 and July 2022, respectively. 

“I was just charged for my September box today but … my August box hasn't even shipped yet! I emailed last week asking where it was,” one person wrote on Birchbox’s Facebook page in September 2022. “I have been subscribed to Birchbox for almost 7 years, and they have gone way downhill. I'm done.”

“Why even have new packaging if you can’t even send out packages,” another person wrote on the Birchbox page in September. 

"I've been trying to reach Ava Women's customer service since September 2nd," one person wrote on Ava’s page in September. "The clasp on my bracelet is broken so I cannot wear it. Please respond to my 3 emails, my Instagram DM and my Facebook message." 

Zoom in: Rui Li, who became an Ava user in 2019 when she stopped taking birth control after experiencing negative side effects, told Erin she had successfully used the FDA-cleared Ava device to track her cycle and avoid pregnancy for three years. 

But starting in August, she said the company began to feel "extra unreliable." 

That month, her device stopped syncing, meaning it stopped giving her useful prediction data on her cycle. When she reached out using the company's customer support channels, she didn't hear back for more than two weeks — and the message she got then was generic and unhelpful, she said.

"You have to sync [it] daily, so going 3 weeks without syncing, I was really afraid it would throw off my predictions," Li said.

Angelides declined to comment on the subsidiaries' operations. As of September, the company has begun to respond to many of the posts  — some of which date back eight weeks — asking customers to send direct messages and check their email. 

5. Unhappy customers

Situational awareness: We've dedicated today's entire newsletter to an investigation by Erin of the buzzy women's health technology company FemTec.

📕 Erin is speeding through the second book in the "Red Rising Trilogy," a dystopian sci-fi series set in the future on Mars.

🙏🏻 Thanks for reading, and thanks to Health Tech Deals editor Claire Rychlewski and copy editor Mickey Meece. Please ask your friends, fellow riders and colleagues to sign up.

October 06, 2022

1 big thing: FemTec isn't delivering on its mission