4 months ago
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Funding to women-founded companies overall (including mixed-gender teams) has declined in the first half of 2024 compared to the first half of 2023, picking up $15.5 billion out of $93 billion – 17% – compared to the $24.8 billion out of $87.7 billion – 28% – in the first half of 2023, according to Pitchbook data.
So far this year, companies with all-women founding teams have raised 2.2% of the venture capital allocated for the year. The data shows that all-women founding teams have never raised more than 3% in venture capital funding since at least 2014 and that for the past four years, all-women founding teams have raised just about 2% in venture capital funding, even when the amount of capital allocated to U.S. startups hit record heights.
Companies with all-women teams are having a more challenging 2024, as activity for them is showing to be much slower than last year Pitchbook’s lead venture analyst Kyle Stanford told TechCrunch. “Our data doesn’t necessarily indicate why this may be, but as investors retract to support their current portfolios, there is less capital available for investment into new companies,” he told TechCrunch. “Investment in women and diverse founders is also challenged by the current political climate. The ruling against Fearless Fund in June highlights this issue.”
He said the trouble for female founders can be seen in the dwindling deal counts. VCs backed 372 startups with female founders in 2024’s first half compared to 536 in the first half of 2023.
“A majority of female-founded companies remain in the seed and early stage of the VC lifestyle,” he continued. This can pose a problem as early-stage VC remains challenging, “where we have seen many companies struggle to advance due to increased benchmarks for new rounds.”
There have been some breakout successes though, such as the $50 million seed round Julie Bornstein’s new startup, DayDream raised in June to work on an AI-powered ecommerce search engine.
And if there’s a bright spot in the data it’s that “venture-growth stage investment in female founders is on pace for an annual record high,” he said. One example of a success here: Romi Gubes’ Sensi.AI grabbed a $31 million Series B from to monitor seniors.
There are other tidbits of good news in the data. Funding to companies with all-female founding teams saw a slight increase in year-over-year funding, picking up $1.1 billion this Q2 compared to the $900,000 in Q2’2023. Such teams haven’t seen a quarterly number that high since they picked up $1.5 billion in Q2’2022.
But the reality of the situation is that startups with all women founders are still on track to probably raise around a mere 2% of venture capital funding this year.
“Mixed-gender teams often secure more funding, perceived as offering balanced perspectives and a broader skill set,” Kate Bodrova, the founder of the edtech Amazy, told TechCrunch. She has a co-founder and is currently in the process of fundraising.
And while bias within the VC community is almost certainly a factor, rather than gaming the system, Bodrova says that founders (no matter their gender) should stay heads down focusing on growth as well as building a team resume that demonstrates the company is in capable hands.
“Focus on providing your value through performance,” she said. “Funding will follow.”
