In 2019, the sextech industry was valued at $30bn — having grown at a steady pace of 30% each year. Since then, much has changed: the pandemic has accelerated the growth of the sector and a new wave of founders are focusing on sexual wellbeing. But the cost of living crisis is growing in severity.
Additionally, sextech (and society) is caught in a grapple between antiquated morals and restrictive regulation around sex work, and those who are embracing online sex work, including porn and all things still considered taboo by a sizeable slice of the population.
Sifted spoke to the experts about how the sextech industry is progressing in this environment — and what we can expect in the future.
Battling bans — and puritans
For any new startup, advertising on Google, Amazon, Facebook and Instagram, or featuring in app stores, is essential to reach users. So as Big Tech firms continue to crack down on sexual content by banning apps from their stores and taking down social media ads, sextech founders and creators are striving to overcome these barriers — and blurry definitions.
The Apple Store and Google Play store ban apps that involve sexual content. While Apple prohibits "overtly sexual or pornographic material", Google forbids content which is "pornographic" or "obscene". Facebook and Instagram regularly take down ads that feature any kind of sexual content.
Legislation such as the UK’s Online Safety Bill, which seeks to further restrict online content related to sex, feeds back into tech companies’ crackdown on sextech by adding the risk of penalisation and hence discouraging them even more from allowing sextech ads on their platforms.
The government and these platforms are under-serving the population by restricting their access to sextech that's going to make their lives better
Paul David, cofounder of Literal Humans, a London-based content marketing agency that works in the areas of tech for good and B2B SaaS, says: “There's a desire to protect children, for example, but that is a whole other discussion, about having healthy, age-appropriate conversations with kids about their own bodies and sexual health, which is a pretty active debate. But restrictive advertising rules also make it really hard to market great sextech tools that are helping people have safer, healthier sex lives.”
While supporters of the bill say that it will make the internet a safer place for everyone — especially children — sextech founders and supporters say it risks limiting people’s access to tools and services essential to sexual health and wellbeing.
“The government and these platforms are under-serving the population by restricting their access to sextech that's going to make their lives better,” says David “That's a really big deal — your government and these major platforms are actively making you less healthy through misguided policy.”
Tech to tackle taboo
The taboo around sex not only deters consumers from being open to sextech, but also investors — especially when it involves historically sidelined communities like women, queer or disabled people.
Though the global market for femtech reached $40bn in 2020, women’s health receives only 4% of healthcare R&D funding. Trials have also found investors are biased against minority founders, which can leave topics related to the sexual health and wellbeing of historically overlooked groups ignored.
“It's really hard for us to tell investors our story because sex is taboo already and disability is taboo too,” says Andrew Gurza, a disability activist and cofounder of Sydney-based disability-friendly sex toy startup Bump’n. “So when you put the two things together, people get like, 'oh, wow, what is this?'
It's really hard for us to tell investors our story because sex is taboo already and disability is taboo too
“But the important part about that is when you bring them on the journey and share with them the story of what if you couldn't masturbate? What if you needed help with that? What if you’re disabled and want to have access to your body — to pleasure — then all of a sudden, a light bulb goes off,” they continue. “People are more invested when you bring them along on the journey and show them that they're going to be a part of it.”
Manon Cauchoix, cofounder of French sextech platform SexTech For Good, agrees that often investors and society at large, don’t understand the benefits of femtech and sextech. She adds that one way of spreading awareness and increasing visibility is to take part in tech events and conferences, from which sextech founders are often left out.
“If you are at a tech event, if you just have a talk or a stand, tech investors and others can see that we are real, and we are serious, and we have real entrepreneurs behind us,” she says. “So that's what we need — I think it is key to be taken seriously by the tech industry.”
Is sex recession-proof?
When the 2008 financial crisis hit, the impact was felt across industries. But sextech was one of the few sectors which were largely unaffected by the recession. The trend continued as sextech boomed in 2020 and throughout the pandemic.
David says that sextech as a sector is resilient to macroeconomic conditions due to it satisfying a basic human need.
“You're seeing people invent creative new tools to get their needs met,” he says. “What's so interesting about the sextech space is that it is grounded in humans meeting their needs in various ways and leveraging tech to do that.”
There's probably three industries that are largely resilient to recession — gaming, alcohol and adult content
Sesire is a sextech platform that seeks to empower adult content creators by enabling them to customise the experience and monetisation of their fans’ engagement in a safe and easy way.
Sam Gibbon, cofounder of Sesire, and Khalii Wilde, an adult content creator and community director at Sesire, are excited for the platform’s launch towards the end of 2022 despite the current economic climate.
“There's probably three industries that are largely resilient to recession — gaming, alcohol and adult content,” Gibbon says. “Adult content satisfies a human need, and philosophically, we're all hedonistic and happiness is the pursuit of pleasure. Adult content feeds into that.”
Empowered by Web3 and Gen Z
The new wave of digital-native Gen Z consumers is changing the game for sextech and sex-related content. While millennials were labelled the “no judgement” generation for sexual preferences, Gen Z is more focused on diversity and inclusion than previous generations.
“Gender fluidity, kinks and other such topics have all become more accepted in sex work with the new wave of users,” says Wilde. “When I started eight and a half years ago, that was something you didn't really see too much of.
“But now, the sex industry is rallying around every different type of person — colour, gender or sexual orientation, and it's all okay. We love you and all your shapes and forms."
Adding to this, a chunk of the adult content creator community, such as Sesire, is looking to use blockchain technology to have more control over their content and safer working conditions. There’s also a growing conversation around using NFT avatars in adult content and what it will look like in the metaverse.
We're looking at a model where you can unlock new ways to interact with creators or your audience and make money without having to necessarily sell subscriptions
“OnlyFans brought people to user-generated content — but you're pushed down the subscription route and it's not for everyone,” says Gibbon.
“We're looking at a model where you can unlock new ways to interact with creators or your audience and make money without having to necessarily sell subscriptions,” he adds. “Subscriptions is a dated model already, which shows how quickly the world is changing.”
David says he’d like to see even more companies prioritising the rising generation and their priorities.
“They're savvy consumers that are looking for companies that are living up to not just their own values, but Gen Z's broader values about equity and safety,” he says. “I think that's really important. And for companies to really think twice about this emerging market and ask themselves: what are we doing?"