Can the small startups win in the sextech boom?


Months later the trio had ordered a trial run of 288,000 condoms off the back of $100,000 in personal investment.

Park says three years on, Jonny is ready to take on global markets having already secured distributors in the US and Europe.

Bryony Cole, is the chief executive of Future Sex and predicts growth in the sex tech space. Credit:Eamon Gallagher.

Finding the right partners and possible future investors for the business has been a challenge, though. Jonny is one of a number of ‘sextech’ startups gearing up for the start of what many predict will be a sustained boom in products which relate to safe sex, sex education and companies focused on sexuality that target a more diverse range of audiences.

Investor interest

“As far as what’s happening globally, I think even from before the start of this year, we’re seeing investors are more interested in sextech than ever before,” chief executive of Future of Sex, Bryony Cole, says.

Cole, who is originally from Melbourne but based in New York, has become a leading speaker on sextech and the business opportunities and challenges presented in the global space.

She predicts that as venture capitalists tune in to the investment opportunity, a broader range of technologies from chatbots for assisting with sexual assault reporting to technologies to assist those with disabilities to have better sex will be able to secure funding and prove they are a strong return on investment.

Jonny condoms offer a vegan alternative for safe sex.

Jonny condoms offer a vegan alternative for safe sex. Credit:Facebook.

There are, however, major challenges facing smaller players, particularly in Australia.

Australian “femtech” and sextech founders have struggled to get finance or even basic banking products for their businesses in a world where the business community is reluctant back anything perceived to be associated with the adult industry.

Cole says this is still a major challenge.

“I think female pleasure is threatening, generally. And if you’re in a boardroom of investors, what’s the typical ratio of women?”

Even those who do get funding may be competing with global multinationals or US startups who have access to a much wider pool of finance and are already growing their user bases.

It’s also difficult to work out the return on investment a new startup may have, because many founders think that because their ideas are novel, they will make money, Cole says.

“Because it’s taboo, people think they have these genius ideas in the space. I think if you want to start something that’s broadly applicable, I would start with sex education.”

Here come the pitchfests

Enthusiasm about the sector has meant entrepreneurs have rallied together more readily over the past two years.

This Valentine’s Day weekend Cole will host a weekend-long hackathon in Melbourne for founders to workshop new business ideas and approaches.

Other global businesses are also reaching out to Australian founders with their ideas. British-owned adult brand Lovehoney is running its own competition, calling on entries from Australians to design the “sex toy of the future”. The winners will take home prize-money and the chance for their designs to enter production, while keeping the intellectual property rights over their ideas.

Projections for the global sextech sector place its growing value at $30 billion. Cole acknowledges, however, that it may be some time before independent Australian brands truly grow from ideas into positive cash-flow operations.

Loading

“I think the other barriers you come against that people don’t [expect to] come up against are normal, everyday, the fundamentals of building businesses,” she says.

Park believes companies like Jonny can carve a niche for themselves predominantly by bringing a voice and personality to safe sex products that doesn’t exist among bigger businesses.

“You’ve got to have that clear point of difference – that’s how you battle the big players. They have the power, the money and the retail reach… We’ve found that the people that have bought into Jonny early on got what we were about.”

Most Viewed in Business

Loading



Business

Related posts

Make a comment