According to Pitchbook data, funding to women-founded companies overall (including mixed-gender teams) is up $15.5 billion (17%) out of $93 billion in the first half of 2024 compared to the first half of 2023, down from $24.8 billion (28%) out of $87.7 billion in the first half of 2023.
So far this year, companies with all-female founding teams have raised 2.2% of the venture capital allocated this year. The data shows that all-female founding teams have not raised more than 3% of venture capital funding since at least 2014, and over the past four years, even as the amount of capital allocated to U.S. startups reached record highs, all-female founding teams only raised around 2% of venture capital funding.
Kyle Stanford, principal venture analyst at PitchBook, told TechCrunch that companies with all-female teams are facing a tougher fate in 2024, with slower activity than last year. “While our data doesn't necessarily show why, there is less capital available to invest in new companies as investors pull back on investments in their current portfolios,” he told TechCrunch. “Investing in female and diverse founders is also challenged by the current political climate. The ruling against Fearless Fund in June highlights this issue.”
He said the issue of female founders is manifested in a decline in deal volume: VCs backed 372 female-founded startups in the first half of 2024, compared to 536 in the first half of 2023.
“The majority of female-founded companies remain in the seed and early stages of the venture capital lifestyle,” he continued. This can pose problems, as early-stage venture capital remains difficult and “we've seen many companies struggle to get ahead as benchmarks for new rounds have risen.”
But there have been some notable successes, such as Julie Bornstein's new startup Daydream, which raised a $50 million seed round in June to develop an AI-powered e-commerce search engine.
And if there's a silver lining in the data, he said, it's that “investment in female founders at the growth stage of venture capital is on pace to reach a record high in one year.”One success story here is Romi Goubes' Sensi.AI, which raised $31 million in Series B to monitor seniors.
There's some other good news in the data: Funding for companies with all-female founding teams increased slightly year over year, to $1.1 billion in the quarter compared to $900,000 in Q2 2023. Such teams haven't raised such high numbers in a quarter since Q2 2022, when they raised $1.5 billion.
But the reality is that all-female founder startups will probably only raise around 2% of venture capital funding this year.
“Mixed-gender teams often secure more funding because they are perceived to offer a more balanced perspective and broader skill set,” Kate Bodrova, founder of edtech company Amazy, which she co-founded and is currently raising funds, told TechCrunch.
While bias within the VC community is almost certainly a factor, Bodrova says that instead of gaming the system, founders (regardless of gender) should focus on growth and building a team history that shows the company is in capable hands.
“Focus on providing value through performance,” she said. “The money will follow.”