Flo Health: Big Data in “FemTech”
Flo Health is building and monetizing a menstrual cycle tracking app, but it now faces unique challenges managing and monetizing an asset on sensitive personal reproductive health data.
About Flo Health
Founded in 2015, Flo Health has built an app that helps its users track their menstrual cycles. Since then, it has accumulated 200M users worldwide, 36M of which are monthly active users, and most recently raising a $50M Series B in Sept 2021 that now values the company at $800M. To its users, Flo promises a highly personalized health companion – offering women (and those who menstruate) advanced health insights related to their menstrual cycles and overall health. In exchange for these insights that can help users achieve their contraceptive, pregnancy, and even broader general health goals, Flo monetizes off recurring B2C subscription revenues, alongside B2B advertising and research contracts with pharmaceutical and health-oriented CPG corporate partners.
Generating a Valuable Reproductive Health Data Asset
To start, it’s helpful to understand how data is collected, generated, and mined in order to offer valuable and monetizable insights to its users.
When a user is onboarded on the app, the user inputs their initial health metrics including height, weight and age. After collecting these initial broad profile-related data, users get access to a calendar that pushes reminders to collect data on their menstrual cycles – period onset, contraceptive methods, vaginal discharge, water intake, pain, mood swings, and sexual activity. In just three recorded cycles (~3 months on the app), the app will have accumulated sufficient data on the user to offer substantively accurate reproductive health predictions and insights. For instance, on average, by the third month, the app would predict future cycles within a 1.26 day error window, based on a large-scale research study conducted on its user data.
Creating & Capturing Value from that Data Asset
Of course, the value creation and capture of this data asset goes beyond just accurately predicting a single user’s menstrual cycle window. The bigger picture is that over its 7 years as a company, Flo has built a longitudinal health data asset on nearly 100M users. In other words, Flo Health has a proprietary data asset that follows 100M historical users for 7 years linking key discrete health data points to concrete health outcomes.
With such a rich database, Flo has positioned itself as the premier data-enabled health companion for women throughout their entire reproductive health journeys – from the moment they start menstruation through potential pregnancies and even post-partum motherhood experiences. Leveraging this data asset and layering AI-based product modules on top generates for users critical health insights across disease onset, symptoms, lifestyle, beauty, and mental health. Some critical services that Flo offers its users in its ~$10/month premium subscription include the following:
Health 360. Flo offers its Health 360 insights module – indexing users against evidence-based and medically-reviewed predictive algorithms on top of its database of 100M users – to provide personalized health insights . As a user inputs attributes of their menstrual cycles, the app analyzes these data points using gold-standard diagnostic algorithms developed alongside physicians and compares against its database to assess select disease risk scores. For example, the app may stratify users with irregular cycles, loss of period (from 2 weeks to 2-3 months), and high BMI into a high-risk category for PCOS, or polycystic ovarian syndrome – prompting users to seek formal diagnosis and treatment from a physician.
Fertility and Pregnancy. Tailored for those are or wanting to be pregnant, Flo also offers insights across the pregnancy journey. From notifying insights on peak ovulation windows to increase users’ chances of conception to being a health education and support companion for users throughout their pregnancy, Flo’s value proposition extends the entire spectrum of menstrual and reproductive health for its users.
Post-Partum Health. These health insights interestingly become more critical in the period following pregnancy. For instance, this period is characterized by increased risk of post-partum depression and other post-pregnancy health complications. For these users, Flo offers community forums with millions of other mothers. With additional mental health insights, personalized digital support material, and tailored educational articles, Flo helps mothers achieve their new normal. In fact, these unique insights mined from its data assets has opened a second monetization strategy – via B2B employee benefits through corporate contracts. Larger employers have contracted with Flo to both offer its female employees unique maternal benefits as well as ensure their safe recovery back to work following maternity leave.
The Future: Challenges & Opportunities
Progress thus far. Throughout Flo’s growth, the biggest challenge its faced has been on data security and privacy. In February 2019, the Wall Street Journal exposed that Flo overly monetized its data asset by disclosing to Facebook which users were experiencing their period or were intending to get pregnant. This disclosure had originally given Flo access to new advertising opportunities using its users’ health data, without their consent. This sparked investigations by the FTC on private data misuse – leading to a settlement of an undisclosed amount in January 2021.
The future. While a larger data asset has enabled Flo to access new opportunities – such as offering products for corporate clients as maternal employee benefits that ensure and accelerate a safe return to work – data privacy remains a tremendous challenge. For instance, a new privacy challenge emerges with its new monetization strategy; employers with inappropriate access or storage of employee health data could expose mothers to pregnancy discrimination. Additionally, with its past mishandling of data, the media and US regulators have increased scrutiny on the firm. As for its growth plans, Flo now faces a new challenge winning back the trust of its customers after having its past transgressions exposed.
Patric, this blog posting is extremely helpful for me especially, as I am also working in the FemTech field for my Independent Design Engineering Project. I know a lot of users including myself stopped using Flo after reading about its disclosure of data however, later had to come back using it after all as other menstrual cycle tracking apps were just not in the same stage as Flo’s quality. I also agree with you that Flo needs to have a stronger data safety mechanism. The app limits its user by setting the minimum age at 13, while the average menarche age in the US is 12.
Thanks for the blog post! I find the topic of FemTech very exciting.
Learning that FloHealth shared data without consent makes me skeptical about data security in the FemTech space.
I wonder how users can be protected here. Users are forced to enter their data if they want to use the app. I wonder if it would also be possible to use the app for general information and tips – without having to enter specific data.
Here I see the next problem, because the app is confronted with very similar but very individual data. Since each body functions individually, I wonder how accurate the recommendations are – what part is based on general data, what part is based on my data to tailor recommendations.
Another issue I identify from the user perspective is a lock in effect. Once you start using FloHealth and data is collected you start perfecting your recommendations. The more data, the better they understand you, the better your recommendations. This makes the user vulnerable as they have high switching costs.
One more area which I think could be interesting for FloHealth to look into are urinary tract infections. Especially acute or chronic cystitis have big market potential and I wonder if any research has been done here.
Thanks for the post Patric. I wonder if the two business models (b2b vs b2c) create any tensions for Flo? Or do the incentives of employee benefits providers actually align with the end user such that product development efforts can be united?
Interesting post — thanks for sharing, Patric. This reminds me of a case we read in Launching Tech Ventures (LTV) class about a similar company, Ovia Health. This company focuses more on family planning/maternal health, but also covers the whole female health journey. It was interesting that Flo also took the approach of pursuing the B2B channel through working with employers/corporations to offer their services as a benefit, rather than insurance companies. I believe the mission alignment between FemTechemployers (vs. FemTechinsurers) makes the most sense, even though the data asset would be incredibly valuable to insurers and the sales process would potentially be less cumbersome. I hope this means Flo & Ovia continue to prioritize women’s actual health outcomes vs only doing what insurance companies perceive to reduce their costs.
Super interesting post, Patric. I’m particularly interested by the last piece, on data security and privacy, because I wonder if the precedent Flo has set with Facebook might leave the door open to further litigation. For example, I’m wondering if this data could ever be misused to discriminate against hiring women trying to get pregnant (e.g., if the data ever got scraped or leaked, and somehow future employers were able to use it in the wrong way). I know similar claims have been brought against 23andMe with their repository of genetic material, and so I wonder if Flo might face the same issues? Either way, great blog post — I really enjoyed the read!
Thanks very much for this fascinating post, Patric!
I would be curious to see a breakdown of Flo’s revenue. Hearing about their advertising business and their challenges with the FTC made me think about the adage heard frequently these days in tech circles: “On a long enough timeline, everyone sells ads.”
It feels like the allure of ads is particularly powerful in the context of consumer software that collects first-hand user data and venture backed businesses. Despite the power of personalization, it strikes me as an interesting phenomenon that many business still fail to capture value directly from the personalized user experience and have to depend instead on monetizing the database on the back end…
Thanks for this Patric, this post to me truly highlights the risk associated with healthcare data. The mixing of commercial products and healthcare data creates a situation with potential perverse incentives. I can only imagine how this data could be used to market fertility drugs and IVF to women who have indicated to the app that they are trying to get pregnant but have been unsuccessful. With areas like fertility, people often become extremely price inelastic, which can pose a risk!
To me, it seems that Flo sells a paid service that others offer reliably well for free or much lower cost. There are tons of period-tracking apps and fertility support apps, largely because they’re not super complicated to create. For example, one method of tracking ovulation is by measuring basal body temperature. All you need is a super sensitive thermometer, which you can get on Amazon for $8. A user takes their temperature several times a day at specific intervals (e.g., before standing up in the morning) and records their results in the app. When temperature spikes, the user is likely fertile. (You can also do this in a spreadsheet or on paper.) So why pay $10 per month?
Flo’s main point of differentiation seems to be its ability to predict and flag potential health concerns (e.g., PCOS). Is that a sustainable competitive advantage? I’d argue no, so what’s their plan for continuing to stay ahead of the market? What’s going to keep customers paying $10+/month in a market crowded with free and lower-cost players?
Great post!
Patric, very interesting blog post! It is incredible to read they have data on 100m historical users in just 7 years. I’d be curious to see how they are able to continue monetizing this data asset in the future in light of recent regulatory news and the Supreme Court decision granting a lot of access to states regarding women’s reproductive information. It will be especially interesting to see whether this has already generated an impact on subscribers or if they continue to trust their information to Flo Health.
Thanks again for the thoughtful post!