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Business Opportunities Only Women Can See

Companies like Lola, Universal Standard and ThirdLove are tapping market opportunities that have long been in the blind spots of male entrepreneurs and investors.
Universal Standard sells elevated essentials spanning sizes 00 to 40 | Source: Courtesy
  • Tamison O'Connor

NEW YORK, United States — When Alex Friedman and Jordana Kier began fundraising for their personalised tampon subscription service Lola in 2015, they soon realised their pitch wasn't resonating with investors.

“We were assuming that the people sitting across from us knew just as much about tampons and pads and periods as we did. But that wasn’t the case,” says Friedman. “We had many investors who had never touched or seen a tampon.”

It was a wake-up call for the duo who knew if they wanted to secure funding, they’d have to get creative. From that point on, they always brought products to investor meetings — even giving occasional demonstrations by dunking tampons into water at restaurant tables — and added a “Periods 101” slide to their pitch deck to give a high-level overview of what a woman experiences during her monthly cycle.

“A desire to remove stigma is also a very significant reason why we started the brand,” Friedman adds. “No one was talking about this category.”


Lola is part of a new wave of female-founded, digital companies tapping market opportunities that have long been in the blind spots of the largely male pool of entrepreneurs and venture investors that make up the start-up ecosystem. Women founders and funders remain deeply underrepresented in the venture space, which historically has seen opportunities that sit outside the male line of vision go untapped, with significant value creation being left on the table. However, companies like Lola are leveraging the gender gap to create technology-powered business in sectors that are ripe for disruption.

There's a real growing appetite among venture investors to deploy more dollars behind women.

Women entrepreneurs receive significantly less funding than their male counterparts. In the US, the world’s largest market for start-ups, just 10.7 percent of venture capital investment went to companies with at least one female founder last year, according to PitchBook. This figure shrinks to 2.3 percent for US companies with an all-female founding team. In the UK and Europe, the stats are similar. British mixed gender founding teams receive 10 percent of VC investment, while British all-female teams receive less than one percent, according to a 2019 study by the British Business Bank. A lack of female venture investors is often touted as a key reason: just 9 percent of American VCs are female, while 74 percent of venture capital firms in the US don’t have a single female partner, according to data from All Raise, a non-profit organisation dedicated to furthering diversity in the venture space.

“The perspective, the desire [and] the needs of so many demographics are being ignored, and we wind up in situations where products are built without empathy for a non-diverse demographic,” says Anarghya Vardhana, a partner at venture capital firm Maveron LLC who sits on the marketing committee at All Raise. “That’s bad for business because you could build something that’s for a much broader audience, and you could make much more money, so the business is better.”

But there's evidence that things may be starting to change. Last year, companies with at least one female founder raised $16.3 billion of US venture funding across 1,769 deals, up from $13.2 billion in 2017, according to PitchBook. "There's a new generation of companies that are being built by women who have trail blazed in so many new industries, and at a very fast, technology-enabled scale," explains Scott Birnbaum, founder of Red Sea Ventures, which led the seed round for Universal Standard, a female-founded company that aims to offer stylish clothing to women in a range of sizes far wider than most fashion labels. "There's a real growing appetite among venture investors to deploy more dollars behind women."

We wind up in situations where products are built without empathy for a non-diverse demographic. That's bad for business.

A number of these start-ups are building new business concepts rooted in genuine empathy for the female experience in areas from personal care to lingerie to maternity and plus-size clothing, developing practical solutions to pain points that men rarely consider. For example, Lola’s subscription model aligns perfectly with the demands of a woman’s menstrual cycle. Lingerie company ThirdLove uses data to help women find better-fitting bras (the brand estimates 80 percent of women currently wear bras in the wrong size). Universal Standard offers an antidote to the limited aesthetic variety and patronising messaging that have long dominated the plus-size clothing market.

“We’re talking to other women, so we’re going to understand their needs better than some guy who’s sitting in an office and is looking at a spreadsheet,” says Universal Standard co-founder Alexandra Waldman, who experienced first-hand how difficult it was to find well-made and stylish clothing in double digit sizes. “Being a woman is always going to be a benefit when you’re building a business primarily for women… my need as an end consumer had a huge effect.”

Arianne Goldman bootstrapped her direct-to-consumer maternity wear business Hatch for the first six years, building a brand that also became something of a community for mums-to-be. When she decided to seek funding to help scale the business further, she said many investors couldn’t comprehend the emotional relationship customers shared with the company.

“Men specifically weren’t really understanding the conversation that we’re having with these women and what we were starting to mean as a brand,” she explains. “That’s a little harder of a sell when you’re trying to pitch what you’re building. It’s usually bouncing metrics and numbers and lifetime value, but meaning is something that’s kind of intangible, that women to women really actually understand more.”


Being a woman is always going to be a benefit when you're building a business primarily for women… my need as an end consumer had a huge effect.

A number of organisations are doubling down on closing the venture ecosystem’s gender gap. Non-profits like All Raise work with top-tier VC firms and run mentorship programmes for female investors and founders. Funds like BBG Ventures (BBG stands for Built By Girls) and the Female Founders Fund (F3) provide early stage investment to companies with at least one female founder.

“Purely financially speaking there was an arbitrage opportunity,” says Anu Duggal, founding partner at the Female Founders Fund. “They weren’t getting access to that first round of capital.” That was what excited investors in the fund, she says. F3’s portfolio boasts names like Rockets of Awesome (data-driven, subscription-based kidswear), Billie (described as “Dollar Shave Club for women”) and Eloquii, the trendy plus-size fast fashion brand that was acquired by Walmart for $100 million last October.

Lola’s Freidman and Kier — who closed $24 million in Series B funding last year — are no longer dunking tampons in water at investor meetings. But looking back, Friedman said having to rework their pitch in the early days actually helped them to find the right investors for their company.

“At the end of the day, it’s like a marriage. It takes decades to build great brands and we assumed from the very beginning that the people investing in our business would be our partners for many years,” Friedman concludes. “This brand is about being transparent and candid and comfortable in these subject areas — we needed our investors to be ambassadors in that way of thinking.”

Illustration by Chelsea Carpenter for BoF Illustration by Chelsea Carpenter for BoF

Illustration by Chelsea Carpenter for BoF


Company: The Modist
Founded: 2017
Capital Raised: Not disclosed

Ghizlan Guenez founded Dubai-based e-tailer The Modist to cater to women that wanted to dress modestly but felt excluded from luxury fashion, whether that be for religious reasons, professional reasons or simply personal preference.


“On a practical level it’s giving them fashion that is relevant to them. And then at a deeper level, it’s making them feel heard and relevant and included in that world of fashion, which they love and they’ve been wanting to be part of in a meaningful way,” she says.

Guenez, who herself hails from Algeria, said it was crucial the brand was positioned as non-denominational and global, not something that was simply targeting wealthy women from Muslim countries in the Middle East. “We couldn’t just start from the Middle East, which is a market that I understand, because the minute you associate modesty with just the middle East, you’re done,” she explains. “It’s the first stereotype you come across, and so it was even more important for us to make sure that it’s not seen to be that.”

Still, spend on clothing in the Middle East was estimated at $243 billion in 2015, according to a report by Thomson Reuters. But the US accounts for as much of the company’s sales as the Middle East, each making up roughly 35 percent of business, with the UK and the rest of the world accounting for the remaining 30 percent.

In June last year, the e-tailer secured $15 million in strategic funding led by Vaultier7. Other strategic investors include Farfetch, Chalhoub Group and Annabel Investment Holding, the private equity vehicle of Nicola Bulgari, vice chairman of the Bulgari Group. The Modist declined to disclose how much funding it had received in total.

Illustration by Chelsea Carpenter for BoF Illustration by Chelsea Carpenter for BoF

Illustration by Chelsea Carpenter for BoF


Company: ThirdLove
Founded: 2013
Capital Raised: $68 million

Heidi Zak’s original idea for starting a lingerie company came out of a longing for a bra-shopping experience she wasn’t embarrassed about. Back in 2012, she had made her way to a Victoria’s Secret store — a hotbed of pink, velour and strong perfume scents — settling for a bra that didn’t really fit but was close enough as she was strapped for time. “The real a-ha moment for me was walking out of that store with the pink striped bag and shoving it in my backpack because I was embarrassed to be shopping there,” she says.

It’s estimated that 80 percent of women are wearing the wrong bra size, with many mainstream brands producing a limited pool of sizes. In addition, many traditional lingerie companies focus marketing around a traditionally male idea of what “sexy” is.

Today, Victoria’s Secret still dominates the US women’s underwear market, claiming roughly one in four dollars spent on lingerie. But the L Brands-owned company has been in decline as it has struggled to keep up with consumer shifts.

What sets ThirdLove apart from existing players in the space is threefold: better experience, better product, better brand. With her husband and co-founder Dave Spector, Zak created an e-commerce experience that digitises the in-store bra fitting process, with an algorithm- and data-powered “Fit Finder” questionnaire to assist women in finding the correct size and style to match their needs; uses a digital direct-to-consumer model, allowing the company to sell high-quality bras in a vast range of sizes (today, the brand offers 78 sizes, including “half cup” sizes); and built a brand that her customers can identify with, centred around comfort, inclusivity and body positivity.

“From the early days we were very focused on this idea of size inclusivity,” says Zak. “What happened over time was as our base of women grew, we were really able to listen to our customers and hear what they were asking for, include more of that, and then evolve our brand.”

In February, ThirdLove closed a $55 million funding round, led by L Catterton, the consumer-focused private equity firm whose shareholders include LVMH and Groupe Arnault, and investment bank Allen & Company, with participation from YouTube chief executive Susan Wojcicki and former AOL chief executive Tim Armstrong, among others. This round boosts the company valuation to upwards of $750 million, reports TechCrunch.

Illustration by Chelsea Carpenter for BoF Illustration by Chelsea Carpenter for BoF

Illustration by Chelsea Carpenter for BoF


Company: Universal Standard
Founded: 2015
Capital Raised: $9.9 million

Fashion journalist Alex Waldman and private equity veteran Polina Veksler founded Universal Standard in a bid to shake up the double-digit sized clothing space, one of the most marginalised sectors within the apparel market.

“It was predominantly a bunch of men reading excel spreadsheets who created and ran the plus size industry. I as a consumer felt it certainly and we ultimately saw the need to make a change,” says Waldman. “The people who are making these decisions, or the people who were the only ones bothered with this part of the fashion industry, were people who really were just interested in the bottom line and saw this more as a business than anything else.”

Identifying with the emotional side to shopping for clothing and changing the way the plus-size customer, in particular, was addressed was a priority for the duo. Rather than creating another plus-size label for plus-size women, they wanted to create a brand that would establish a new normal, “where a size 2 can shop in the exact same way as a size 32,” explains Veksler. Today, its elevated and stylish wardrobe basics span from sizes 00 to 40 across ready-to-wear, activewear, loungewear and denim by May 2019.

The brand has a pool of high-profile backers, including Imaginary Ventures (the VC firm founded by Natalie Massenet and Nick Brown), Gwyneth Paltrow, MatchesFashion founders Tom and Ruth Chapman, Toms founder Blake Mycoskie, and SoulCycle founder Elizabeth Cutler. Waldman and Veksler were also enlisted by fashion brands, including Paltrow's Goop and J.Crew, to help them expand beyond straight sizing. While the brand does not disclose revenue figures, it is growing roughly 200 percent year-on-year, according to a source.

“Our goal is to show the industry that it can be done and to be an example that if you’re making a clothing brand, you should service all women, and not pick and choose,” explains Veksler.

Illustration by Chelsea Carpenter for BoF Illustration by Chelsea Carpenter for BoF

Illustration by Chelsea Carpenter for BoF


Company: Hatch
Founded: 2011
Capital Raised: $1.8 million

When Ariane Goldman fell pregnant with her first daughter, she was shocked by the limited clothing choices available to mothers-to-be. “A lot of the silhouettes are designed in a matronly manner that make you feel really ostracised and outside of fashion and society,” she recalls.

The idea behind Hatch was to create a line of pieces that women could wear throughout all the stages of pregnancy and beyond. “Nobody wants to spend money or invest in things that are only for a short period of time, it doesn’t make sense. I certainly didn’t want to, so I didn’t want my audience to either,” Goldman said. In fact, 20 percent of Hatch customers are not pregnant. Recently, the brand branched into beauty, launching a line of non-toxic products specifically for pregnant women.

Early on Goldman financed the brand herself, which, since launch, has either broken even or made a profit each year. She first began thinking about funding in 2014, when she was pregnant with her second child, but decided to postpone raising money until after she’d had her baby and hired a chief operating officer. Hatch closed its first round of investment ($1.8 million) in 2017.

Hatch now has two outposts — one in Los Angeles, one in New York — where it hosts bi-weekly events for women to network and learn more about the various stages of their pregnancy journey. “Hatch is not just selling stuff. It actually means something,” says Goldman. “[That’s] the most valuable evolution for me.” She plans to open six more physical locations over the next three years.

Last year, Hatch hosted 125 events, which attracted over 2,500 women. While Hatch does not disclose revenue, the company said it had broken the eight-figure milestone, and is on track to triple its revenue in the next three years. Last year, direct channels grew nearly triple digits, while gross margin dollars were up 72 percent (direct sales make up 90 percent of the Hatch business, however, they recently inked wholesale partnerships with Net-a-Porter and Shopbop). International expansion will provide a future avenue of growth, as overseas sales currently make up just five percent of the business.

Illustration by Chelsea Carpenter for BoF Illustration by Chelsea Carpenter for BoF

Illustration by Chelsea Carpenter for BoF


Company: Elvie
Founded: 2013
Capital Raised: $15.2 million

With a background in women’s healthcare, Tania Boler considered herself an expert on sexual reproductive health. That was until she fell pregnant herself.

“I was really shocked how going through pregnancy is one of these periods in a woman’s life that is completely bereft of technology and education, and women like myself and many women that I talk to only learn about the changes that happen to our bodies as we go through them, as we experience them,” she says.

It was during her pregnancy that Boler learned about pelvic floor health, an important area of wellness for women during and post-pregnancy (a strong pelvic floor results in better bladder control, faster postnatal recovery and stronger orgasms). To resolve the issue, she teamed with co-founder Alexander Asseily (the man behind wearable tech company Jawbone) to create the Elvie Trainer, a small at-home device to aid pelvic floor exercises, which connects to a smartphone app to track workout progress.

A key part of Boler’s strategy focuses on removing the stigma that surrounds many women’s health issues. “The way to break taboo is [by asking] how do you flip it into something women will talk about,” she says. “If something’s cool, if something’s fun, then that starts happening.”

To create an excitement and buzz around the Elvie Trainer, she partnered with a London-based boutique gym to launch the product. It was also stocked on Gwyneth Paltrow’s Goop, and gifted to celebrities in the Oscars Nominee goodie bag.

In September 2018, Elvie launched its second product, a silent, wearable breast pump, which allows new mums to pump discreetly on the go, at work or around the house. The brand, which was profitable after six months, is on track to do about £23 million ($30 million) in revenue this year and is currently raising its Series B funding round.

Illustration by Chelsea Carpenter for BoF Illustration by Chelsea Carpenter for BoF

Illustration by Chelsea Carpenter for BoF


Company: Lola
Founded: 2015
Capital Raised: $35.2 million

Alex Friedman and Jordana Kier started Lola as a way to solve the problem around tampon ingredients transparency. After Kier noticed the side of her tampon box said "ingredients may contain," she started asking questions, soon learning that the FDA didn't require manufacturers to disclose
tampon ingredients.

“It all comes back to the fact that we’re consumers in this category,” says Friedman. “We weren’t trying to start a business, we were two women who had used tampons almost our entire lives and had never looked at the side of the box to see what was in them. It had never occurred to us.”

The product category was ripe for disruption. In addition to the need for greater transparency, they believed a personalised subscription service synced to the demands of a woman’s cycle would be appealing. Lola soon launched more menstruation products, as well as sex care products, including condoms, lubricant and cleansing wipes. The move, said Friedman, was a result of outreach from the customer community.

“We receive hundreds of emails and calls from our customers and community every day asking personal questions… they were coming to us for questions about menopause and pregnancy, fertility and everything you could possibly think of,” she says. “Women didn’t have a place to turn and suddenly we were this emerging brand being open about reproductive health and we realised the opportunity is so much bigger than just periods. Women need support and product transparency at every life stage.”

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