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Sextech as an industry has long carried stigma and a certain bad reputation. It has been valued at $30B annually and growing at a 30% rate (although some argue this is an underestimation), and encompasses a wide variety of tech-enabled solutions, from the infamous sex robots of the future, to vibrators, sexual health educational platforms, as well as erotic virtual reality.
Advertising bans and barriers to access fundamental services like banking and payment platforms are daily challenges for founders in the space. As a result, common concerns expressed by the investment community include growth limitations due to bans on Facebook/Instagram, regulatory uncertainty, and even the potential or perceived career repercussions of including a sextech company in their portfolios.
Despite all the hurdles, the sexual wellness market is not going anywhere and is expected to reach $122B by 2026 . Products targeting women will own the majority of the market share, and these two UK companies are further consolidating the category in their respective spaces and providing sextech brands with additional sales channels and marketing opportunities.
The Lucrative Opportunities In Sextech E-commerce
Soda Says is a curated marketplace for purposeful tech products. Committed to enhancing consumers’ lives through a more open approach to tech, Soda Says provides its community with informative content, live events and a tailored selection of innovative products across categories from wellness and sleep to home and children.
After 2 years running in the UK, Soda Says just launched its US branch with with the unveiling of a new Sex Tech collection for women. Grace Gould, co-founder and CEO of Soda Says, who has extensive experience in technology retail, explains that Soda Says was born out of the need to make the customer experience better, less overwhelming, and more fun for millions of customers: “We are in the business of closing the chasm, introducing high-level innovations to a broader audience in a friendly way,” Gould added.
For high tech brands, Soda Says is a marketing partner and additional sales channel. This specially benefits the sextech category, as they provide a great customer acquisition platform.
The technology industry is finally seeing the value in female-focused design in the sex tech industry. Gone are the giant body part replicators. The overly eroticized tone has been replaced by stylish, Instagram-friendly products that many are happy to leave on their bedside tables. Every partner product in our platform has been thoughtfully constructed with the female body in mind,” added Gould.
When asked if open to creating their own products, Gould said: “We are definitely open to collaborations for product co-creation!”
The tech industry has not always done a great job at being approachable and friendly to those who don’t belong to the “early adopter” 10% – and Soda Says is here to change that.
Opening The Doors Of Crowdfunding For Taboo Categories
Raising funding is definitely a concern for many founders across all industries, but when it comes to the sextech space, the barriers are significantly higher: They tend to be excluded from pitch competitions, acceleration and incubation programs, and public funding opportunities.
Crowdfunding is therefore a great alternative, and the leading equity crowdfunding platform in the UK and the European Union, Crowdcube, has finally accepted its first sextech companies on the platform: pureeros. The company recently launched an e-boutique and online magazine (with over 150 articles published!) dedicated to women’s sexuality.
We are creating the sexual wellness marketplace of the future, with a mix of content, community and commerce. Women control over 40% of global wealth (Credit Suisse, 2018) but they have been totally underserved when it comes to sexual health. Online sales are projected to increase by 20% year on year, and products targeting women’s sexual health product demand is increasing, from toys and tampons containing cbd, to period proof underwear. High end product growth has gone up by 88% in the last 8 years. However, distribution systems are still inadequate compared to the market growth. That’s the gap we aim to fill in a $3.72 trillion wellness market,” adds Cerrone.
Luke Lang, cofounder of Crowdcube, is excited to see emerging companies like pureeros overthrowing taboos in a traditionally fragmented market: “We’re proud to play a part in driving awareness of the growing sexual wellness sector and give investors the opportunity to have a stake in its success,” he added.
In just a few weeks, the pureeros crowdfunding campaign has already reached 80% of their £90k goal for a 6,47% equity. “I think investors form Crowdcube have appreciated the opportunity to invest in a different and exciting market. Crowdfunding democratizes investments – as it starts at a minimum investment of £10 – so we opened the doors of pureeros to allow everybody to invest in their pleasure and support sexual equality. This is part of our way to give women a choice, to provide everybody with an alternative, where the current system fails.”
There are plenty of well documented reasons to invest in sextech now. It’s is a segment resilient to recession periods and growth has been consistent. Additionally, women’s demands for sexual wellness products is increasing as we destigmatize female pleasure as a society, and demand better design and more convenience in traditional product categories, such as breast pumps or vibrators. Finally, the reluctance of traditional distribution channels and lack of comprehensive sex education creates great opportunities for alternative, tech enabled platforms and, last but not least, Gen Z and Millenials -who are digital natives and overall increasingly sexual wellness positive – will own a combined US $1,543 Billion buying power by 2020.
June 5, 2019 at 08:36AM
Forbes – Entrepreneurs