Sextech: Is it time to invest?

Funding | Reports | Technology
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In 2018, venture capitalists ploughed more than $39bn into funding Fintech enterprises. With electronic trading platforms disrupting the global financial sector, this may seem like a safe investment.

It was a similar story in Edtech investments with AI and game-based learning initiatives garnering an eye-watering $16.3bn across the year. In the Healthcare arena, even the controversial cannabis market raised a staggering $13.8bn with predictions that the commercial cannabis market will go global within the next decade.

But what about Sextech? Why are investors so reluctant to invest in the most natural of markets? Sex is the ultimate commodity. Everyone is doing it and if they’re not, then they’re at least thinking about it on a daily basis.  The Sextech industry has been valued at $30bn and has been estimated to be growing at a 30% annual rate. From a purely financial perspective, investing in Sextech looks like a shrewd move which will see healthy returns. So, is it time to cast aside prejudice, embrace Sextech and make a healthy profit? Let’s take a closer look.

What is Sextech?

Sextech is any technology which is designed to enhance the human sexual experience. From dating apps to dildos, sex robots to online pornography, Sextech is disrupting the way sex is viewed, accessed and enjoyed like never before. Sextech is still, however, a marginalised industry. Difficulty accessing banking and payment platforms for any sex-related products or services, and a plethora of advertising bans and regulatory uncertainty have limited growth in recent years. Despite these difficulties, the Sextech market is continuing to grow and is estimated to be worth $122bn by 2026.

Last month, Business Leader met with Emma Sayle, founder of Killing Kittens, an adult company with an online platform. After a difficult start: ‘no bank would give us a bank account’, Emma has seen interest in her company increase, with investors helping to break the company’s 2018 fundraising target in half the predicted time. There are similar stories across the industry with many Sextech start-ups including MakeLoveNotPorn and Pillow Play being led by women. Sextech has even been branded by some as a new female-led sexual revolution.

Sextech business opportunities

There are lots of Sextech products which look like sensible investments.  New York-based Unbound, for example, have developed a range of genderless shaped sex toys. Their waterproof love eggs and spaceship-shaped vibrators are being marketed as ‘bridging the gender orgasm gap’ and are designed to offer users ‘limitless pleasure’. The market for female pleasure is huge, as is the largely unexplored world of genderless sex toys. Online sex toy store Lovehoney revealed that sales of neutrally shaped vibrators have skyrocketed while traditional ‘realistic dildos’ sales have seen a steady decrease.

To maximise the success of the new wave of sexual enhancement products, there are huge opportunities to develop and create a new infrastructure encompassing: marketing, advertising, payment, banking, cyber security, distribution and awareness. British sex toy start up Mysteryvibe suggests that Sextech is now evolving into sexual wellness. Investors are more comfortable in investing in a market which is linked to healthcare than pleasure.  Sexual satisfaction is, indeed, beneficial to our mental health. With the Italian and French Sextech markets already embracing the new developments it seems like only a matter of time before Sextech becomes mainstream in the UK.

Investing in orgasms

The world is now more connected than ever. Through our Smart Phones, we can now link to people on a global and local network. For arranging sexual encounters, phone based ‘hook up’ apps continue to rise in popularity. The money to be made through subscription alone, has a huge potential while in-app advertising has sometimes gone viral like the 2015 Budweiser campaign on Tinder. Then there are services such as KinkBNB, the site based on Airbnb where people can rent properties with like-minded individuals to explore their sexual desires.

Although the Sextech market is currently fragmented, this is not uncommon in emerging markets. In more liberal countries such as Denmark, Sweden and even the UK, sex toy demand is at an all time high. With such an inter-connected world, it is highly likely that social acceptance will continue to grow across the world as the new, more sexually liberated generation take charge. Sextech could even be viewed as a recession proof market. No matter what the global economic situation, on a personal level, we will always experience sexual desire and wish to engage with products which enhance, protect and innovate our sexuality. In Italy, the economy has been in recession for several years with the Sextech market being one of a tiny percentage to see a 6.4% annual growth.

For venture capitalists around the globe, an emerging market is here and it’s a market which is linked to what it means to be human. Investing in Sextech could be the best decision you make this year.

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