Diversity Venture

After A Huge Q2, Investment Into Female Founders Falters In Q3

Investment in venture is hitting records highs. But for female founders seeking those funds, the VC class has, once again, prioritized talking over what really moves the needle: hard cash.

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Eva Ho, founder of Fika Ventures and All Raise member, told Crunchbase much of the same.

“While capital seems to be flowing more easily than ever, the share going to women and minorities remains paltry,” she said. And anecdotes aren’t the only thing holding up this narrative.

Global Dollar Volume

In the third quarter of 2018, $6.4 billion went into startups with at least one female founder. This represents 14 percent of all venture and corporate venture funding deployed globally in 276 rounds. Out of that 14 percent, 4 percent went to only female founded teams and 10 percent went to companies with male and female co-founded teams.

Quarter-over-quarter dollar volume has dropped by 70 percent for female founders. However, the significance of the decline is tempered by an outsized $14 billion Series C round for Ant Financial—founded by Peng Lei, who is one of two dozen female billionaires in China—in Q2. But removing that anomalous round doesn’t let investors off the hook in Q3.

So far in 2018, 20 percent of venture funding has gone to startups with at least one female founder. By contrast, 2017 venture investments in female founders tallied at 14 percent. Overall 2018 is up by six percent, due to the second quarter increase courtesy of Ant Financial. But it’s not difficult to change 2018’s narrative.

Excluding Ant Financial’s $14 billion dollar round from 2018, only 12 percent of dollar volume has gone to female-founded startups this year, a two percent decrease from 2017’s full-year average.

The chart shows, again, how distortive the Ant round really was.

Next, we’ll take a look at deal volume for female-founded startups. (Bear in mind that this is reported data, not projected, so there will be some lag in the data.)

Leading Venture Investors In Female Founders

Investors that represented the highest deal count in startups with at least one female founder include 8VC with 6 investments, LightSpeed Venture Partners and Goldman Sachs at 5, Almi Invest, Sequoia Capital China, Amazon Alexa Fund, Omidyar Network, Bessemer Venture Partners, and Accel — tying at four each in Q3 2018. We are seeing corporate venture play a more significant role in startup investing, a trend we’ve been tracking in Crunchbase.

We have also included the deal count percent of companies with female founders for the quarter. The highest percent is Workday Ventures with three deals, representing 75 percent of their publicly-disclosed investments this past quarter. This is followed by 8VC and Felix Capital at 60 percent.

You can see in the above that it’s not incredibly hard to differentiate a firm by this metric. Just do two more, and you move from tied for fourth to pushing for second. One more and you’re tied for first. That more firms aren’t cracking the top three (in volume terms) in the above chart is notable.

Median Venture Rounds

We also took a look at the median venture and corporate venture for female founded versus male founded startups over the last five quarters. For male-only-founded startups the median is $7.9 million, for female and male co-founded teams $6.7 million, and for female only founded teams the median is $6 million. The median for male founded teams is 23% higher than male and female co-founded teams, and 55% higher than the median for female only founded teams over these past five quarters.

The data in the chart is a bit spiky, but what’s plain is that female-founded startups raise less than their male-only counterparts. And adding men to the team doesn’t close the gap.

However, some positive news is hiding in the data, particularly at the start of a startup’s life.

Seed-Stage Hits Records

For the first quarter ever, female founded startups raised over twenty percent of seed funding dollars. Seed-funded companies with at least one female founder raised $260 million in the third quarter of 2018 representing 269 seed funding rounds.

From a deal count perspective, the last 5 quarters are all at 20 percent or over.

In percentage terms, around 21 percent of Q2 global seed rounds included a female founder. In the third quarter, that rose to just over 24 percent. Of course, that last figure is a higher percentage of a smaller base, meaning that total round count fell. But in terms of makeup, startups with a female founder did better than in the second quarter.

Next we’ll see who’s leading on seed investments into startups with female founders.

Leading Seed Investors In Female Founders

Leading seed-stage investors in companies with at least one female founder for this past quarter include Y Combinator with 21 investments, Startupbootcamp at 16, and Techstars with 13. Quake Capital Partners, 500 Startups, and SOSV also made the list with 5 investments or more. Notably, Rethink Education tracked at 100 percent and Quake Capital Partners, Sinai Ventures, Precursor Ventures, M Ventures, and Great Oaks Venture Capital all were 50 percent or above with investments in a female founded company this quarter.

Female Founder Rounds Of Note

Within the last five quarters, there have been fifteen venture or corporate rounds over $1 billion and a further 34 rounds of $500 million or more. Of the fifteen largest rounds, ten are from Asia-based companies and five are from the United States. Only two of the companies have at least one female founder, including Ant Financial and Singapore-based Grab.

Of all the deals that included female founders in the 3rd quarter, the following growth rounds caught our eye.

  • 23andMe raised $300 million from GlaxoSmithKline to partner with and develop drugs. They previously raised a $250 million growth round in September 2017 led by Sequoia Capital. Anne Wojcicki is the co-founder and CEO of 23andMe.
  • GetAround, a startup that allows car owners to rent out their car, raised $300 million this quarter from the SoftBank Vision Fund. GetAround is co-founded by Sam Zaid, Elliot Kroo, and Jessica Scorpio.
  • Brandless, an e-commerce website selling around 300 household items mostly for $3 raised $240 million from the SoftBank Vision Fund. Tina Sharkey is the CEO and co-founder of Brandless along with co-founder Ido Leffler.

So what’s coming next for female founders?

Looking Ahead

Overall, Q3 2018 has pulled in some pretty paltry numbers for female founders, even when we exclude Q2’s enormous funding raise. In a market that is awash with money, it’s hard to believe more of it couldn’t of found its way to startups with at least one female founder.

That said, a light note of progression has been on seed dollars front. And although the increase wasn’t enough to move total dollar volume, seed-stage investments are a pipeline for early- and late-stage investments, thus serving as a positive signal of sorts for years down the road.

For women looking to fund in an environment that’s not often conducive to their success, Ho told Crunchbase her advice is to “never take” a no personally.

“Fundraising is about building long-term relationships,” she went on to say. “Over the years, the dynamics of the relationship can and will change—you never want to close the window in getting someone to believe in your idea, your company.”

But just how many years do female founders have to wait to get an equal share of funding? Based on our current understanding VC funding patterns between male and female-founded startups, the answer is likely disappointing: not soon enough.


Our analysis includes 10,751 venture and corporate deals and 8,652 seed fundings for companies with founders associated over the last five quarters. Startups without founders associated in Crunchbase are excluded from this analysis.

A large percent of seed deals and dollar volume are added after the end of a quarter. We fully expect these absolute numbers to go up even if the percent between female and male founders stay the same.

Gené Teare, Crunchbase’s data lead, provided the charts and metrics and most of the words for this post; the News team helped add additional context.

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

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