Unlocking the trillion dollar female economy

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As women have gained economic power, their economic influence has expanded. For a long time, women were primarily responsible for purchasing everyday household items, but today they control or influence 85% of consumer spending.

I founded cake companies as a venture capital firm investing in technology companies addressing the rapidly changing demographics of our world.

My thesis is made up of three layers of demographic change: aging and longevity; the shift to ‘majority-minority’ where the Internet is powered by a population of technology adopters of Asian, Black and Latino origin; and greater purchasing power and income of women.

Many investors evaluate opportunities to invest in women exclusively through the lens of female founders (and we can’t talk about the opportunity in female consumers without acknowledging the lousy investment numbers for female founders), but there is a parallel opportunity in the women’s economy: investing in technology that solves problems and meets the needs of female consumers.

This cohort is already driving companies to multi-billion dollar results in women’s health, e-commerce, the care economy and other categories. The decacorn valuation of SHE IN and multi-billion dollar (or more) valuations of expert health, Fairand amazing health are just a few examples of the enduring power of the women’s dollar.

How did women become a growth market?

Today, women make up roughly half of the US workforce, and when adjusted for self-employment, they are the new majority of the workforce. Much of this growth was driven by gains in the retail and healthcare sectors, industries that employ more women and are heavily influenced by female purchasing power.

The rise in female employment is also inextricably linked to education: as of 2019, almost half of the employed female population aged 25-64 had a bachelor’s degree or higher, representing a quadrupling of women with degrees since 1970.

Today, women make up 59.5% of college students, and even as enrollment at US universities is declining, men account for 71% of that decline. If this trend continues, soon two women will earn a college degree for every one earned by a man.

Even with a persistent wage gap, these factors have led to a dramatic increase in the financial power of women. American women control more than $10 trillion in assets (an amount expected to triple over the next decade), fueled by a steady increase in labor participation, education, and wage growth.

Women are increasingly likely to be the main breadwinner, financial contributor and head of the household, making 85% of day-to-day spending decisions and 80% of healthcare spending decisions for the family.

Four key investment themes

The pace of women’s economic activity has increased in all categories. This affects not only consumer categories like beauty, clothing, and housewares, but it is also changing who becomes the primary home buyer, user of financial products like credit cards and mortgages, and decision makers in the marketplace. Workplace.

There are four main categories in which the needs of women have driven the acceleration of their consumer dollars:

The “super consumer”

Women have long been a target customer for retail and e-commerce, but the modern female consumer, a “super consumer,” wields far more influence over the economy than ever before. A number of privately owned unicorns and multi-billion dollar market cap public companies can attribute their growth to a powerful and engaged female consumer base.

Many would place billion-dollar beauty and fashion brands like Skims, SHEIN, and Savage x Fenty in the category of companies driven by female consumption. Dig deeper and you’ll see that the female consumer dollar is driving both the acceleration of new consumer brands and associated activity around creators and influencers, e-commerce enablement, and supply chain.

The influence of the female dollar can be felt in consumer-facing categories like education, healthcare, food, and fintech. When thinking of the female consumer, it is more appropriate to ask, ‘which industries are not influenced 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 primary health care decision makers for their families. “Femtech” is now a widely recognized category of healthcare innovation, reaching $16 billion in investment as of Q3 2022, and is estimated to be a nearly $1.2 trillion industry by 2027. Companies like aunt cheers and kind have changed the healthcare user experience for women and others like A life and Gamete are merging science with AI and data to modernize IVF, ovarian disease, and menopause.

Opportunities extend to maternal health, mental health, and home diagnostics, all areas that will see accelerated innovation in the coming years. In a post-Roe world where women want more control over their health care, women’s health is poised to be one of the most active areas of innovation.

The care economy

As women have taken on more professional responsibilities outside the home, their caregiving responsibilities have not diminished. Dismissing caregiving as “women’s work” has allowed the category to be ignored and underinvested even in the face of the growing number of male caregivers and the onslaught of aging fathers who will make many of us new caregivers.

Caregiving became a political talking point during the 2020 election, and the Biden Administration presented a 2024 budget proposing $750 billion in federal support for caregiving. Along with this federal focus, there is a significant market opportunity for technology that makes this care more accessible and affordable.

companies like mirza are helping employers support working parents with child care subsidies that reduce child care-related absences. There is tremendous opportunity to create solutions that ease the financial burden of care, support professional and family caregivers, and make care more accessible and affordable for all. As women become our most educated workforce, we have to figure out how both care and work are done.

women at work

During the pandemic, women in careers picked up the tools of hybrid and remote work that have since reshaped the modern workplace. It is these professional women who have been driving demand for emerging technologies and platforms fundamentally changing the return to work. The future of non-white-collar work is particularly relevant to women in categories such as education, service jobs, healthcare, and professional care. Labor markets like ShiftMed and Health Vivian arose to fill the shortage of health care jobs, focusing on different aspects of the job market for qualified physicians. As technologies like artificial intelligence force the evolution of white-collar work, non-white-collar jobs where women are concentrated will find that AI becomes an accelerator for training and eliminating some of the tasks tedious and reporting requirements in these jobs.

Looking ahead: investing in women

Today, women are more educated, active in the workforce, and more likely to start businesses than ever before. Even so, much remains to be done to harness its economic power. This gap is the alpha opportunity for investors. Investing in both women-led businesses and business areas where women’s needs are yet to be met has the potential to unlock billions of dollars.

Women should no longer be thought of as a niche. In fact, they are one of the fastest growing markets we have ever seen.

this white paper contains more of Cake Ventures’ research on demographic change.