Business Diversity Venture

Q1 2019 Diversity Report: Female Founders Own 17 Percent Of Venture Dollars

Here we are again knee deep into another year, attempting to get a bird’s-eye view above recent IPO excitement and other general tech/venture happenings.

We are in this position to gain a data-centered perspective on a topic that’s important to us and hopefully important to our readers: The amount of funding that flowed to companies with at least one female founder in the first quarter of 2019.

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For clarity, let’s begin with our bottom line analysis: Seventeen percent of venture dollars representing $8.1 billion in the first quarter went to companies with at least one female founder. Of that, 2 percent was invested in only female founders, and 15 percent was garnered by companies with male and female co-founders. In contrast, 83 percent went to only male founders.

Compared to previous quarters, the first quarter saw an improvement in funding to companies with at least one female founder. Overall we show a dramatic increase year over year, and a healthy increase quarter over quarter from a percent and amount invested in a company with a female founder.

Since 2009 there have only been two quarters that are at 17 percent or higher for venture dollars to companies with at least one female founder. However this is not an indication that the next quarter will be on par or stronger. In contrast for only female-founded teams, we have not seen an increase in percent or amount this quarter.

Breakdown: Are Female Founders Raising Super Giant Rounds

For the last four quarters we have seen an uptick in later stage funding to female founders.

In fact, an increase in the percent in Q1 2019 to female and male co-founded teams is due in large part to investments over $100 million to these teams. The most significant investments in this category are from Asia and one in Europe as reported by our own Natasha Mascarenas for Crunchbase News. These companies include Grab, Horizon Robotics, Dada, Zilingo, and RELEX Solutions.

For 2018, the second quarter produced the largest funding round of 2018, with $14 billion into Ant Financial in China. This round boosted the percent of 2018 fundings with at least one female founder to 17 percent for the year. If you exclude this single round, 2018 would have been around 12 percent to companies with at least one female founder. All Raise, the organization bringing together women in venture to support female founders, has set a target of 25 percent of funding within the next five years to companies with a female founder.

Of the $8.1 billion raised by women in the first quarter of 2019, 16 known rounds were above $100 million, making up for 57 percent ($4.5 billion) of the dollar amounts raised by companies with at least one female founder. For male only founders, $19.7 billion was raised across 75 known rounds representing 51 percent of dollars to male-only founders. Year over year this dollar amount for companies with a female founder has increased close to threefold.

Notable Fundings For Sole Female Founders

Two female-founded companies joined the unicorn leaderboard this quarter.

Rent the Runway, founded in 2009 by Jennifer Fleiss and Jennifer Hyman, is an e-commerce site when women can rent designer apparel and accessories. It raised a further $125 million bringing the company’s valuation to $1 billion. The round was led by Franklin Templeton Investments along with Bain Capital Ventures. The company has raised a total of $337 million in equity funding.

Meanwhile, Emily Weiss founded Glossier by starting a beauty blog, which grew into a cosmetic brand with $100 million in revenue in 2018. Glossier raised $100 million Series D minting its new unicorn status at a $1.2 billion valuation. The round was led by Sequoia Capital, with new investors Tiger Global Management and Spark Capital.

Starling Bank, founded by Anne Boden and based out of the UK, raised 75 million pounds (just over $94 million). Starling Bank, a mobile bank with 460 thousand customers and 30 thousand SMEs, is poised to focus on expansion into Europe, along with extending its banking platform to third parties. Merian Global Investors led the funding round.

A Look At Lead Investors

Based on announced investments for the first quarter, the leading venture investor by deal count is New Enterprise Associates (NEA) who invested in eight companies out of 26, representing 31 percent of their portfolio investments with at least one female founder.

“I am focused on looking for great investments, first and foremost, and believe that the secular trends around diversity and inclusion are creating great investment opportunities, said Tony Florence, General Partner and Head of Technology Investing at NEA who had led many of the firms’ investments in female founders said. “Today I find that many of the best opportunities are with companies founded and led by women.”

Further, Florence believes as technology takes on an ever-expanding role in the economy, companies with diverse founders are poised to become even more prevalent and successful.

“As technology permeates more of the GDP and expands the underlying opportunity set, I think we’ll see growing diversity among tech entrepreneurs–a key ingredient for a thriving tech sector and venture industry, and one we intend to play a leadership role in advancing,” said Florence.

Examining Seed Dollars

For this quarterly report, we like to separate seed as this is a leading indicator for future venture rounds. For the first quarter of 2019, the seed percent is lower than the venture percent. Fourteen percent of seed dollars in the first quarter went to companies with at least one female founder. Of that, 4 percent went to only female founders, and 10 percent to male and female co-founded teams. In contrast, 86 percent went to male-only founders.

This percent is an all-time low for the past five quarters. 2018 was consistently 19 percent or above for companies with at least one female founder.

Y Combinator led this quarter with the highest count of investments at 48 in companies with at least one female founder. This includes their most recent Winter 2019 batch of companies, along with follow-on investments from previous cohorts. For the 48 companies with at least one female founder, this represents around 24 percent of Y Combinator’s investments this quarter.

Y Combinator has invested in this space by creating the Female Founder Conference in 2014, launched Leap which is now an independent company Elpha and has invested in Dev/Color, Women Who Code, Jopwell, Callisto, and tEquitable.

From a Y Combinator spokesperson “To be funded by YC, you don’t need to know anyone — no network within Silicon Valley is needed; anyone can apply to the program. What we look for: smart, talented founders, who have a unique insight into their space and are actively executing on their company.”

In conclusion, let’s circle back to that target nonprofit All Raise set within the next five years wherein female founders will own 25 percent of funding. Clearly we aren’t there yet. But, at least for now, we are getting closer.

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Illustration: Li-Anne Dias.


  1. Methodology: Notes On The Data

    The charts and information in this report are based on reported data in Crunchbase. In other words, it’s based on publicly disclosed rounds included in Crunchbase dataset.

    Crunchbase’s dataset is constantly expanding, but there are gaps. A company may not have founders listed on its Crunchbase profile. Or Crunchbase might not have a gender listed for founders that are attached to the person’s Crunchbase profile. (Note: In addition to “male” and “female,” Crunchbase has over two dozen other gender tags.)

    Crunchbase, like all databases of private-market transactions, has a documented pattern of reporting delays. It can sometimes take between weeks to months for some rounds to be announced publicly and subsequently get added to Crunchbase. This is especially the case for seed and early-stage deals, which are often raised by companies before the company launches a product or otherwise gets much outside media coverage which surfaces information about the company’s funding history. As data is added to Crunchbase over time, some of the numbers in this report may shift slightly.

    Seed includes Angel, Pre-Seed, Seed and Series Unknown below $1 million. Venture rounds include venture and corporate venture rounds.