Q3 2019 Diversity Report: Over $20B Invested In Female-Founded, Co-Founded Startups This Year Alone

Jennifer Neundorfer, a founding partner of Jane VC, which invests in women founders, is in the process of raising ten times her initial fund.

But instead of leading her pitch to limited partners (LPs) with a reference to gender, she phrases the investment thesis as follows: “We’re going to invest in an underlooked asset class that is overperforming.” 

“If it’s just about [investing] in more female founders, everyone has a different motivation,” Neundorfer said. “We don’t want this to be seen as a nonprofit charity; that’s not what it is.” 

As Neundorfer works to raise $20 million for her next fund, there’s a greater trend in her favor: according to Crunchbase data, over $20 billion has been invested in female-founded and co-founded startups so far in 2019. 

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Of that $20 billion, approximately $5 billion has been invested in female-only founded startups. The remaining $15 billion, according to Crunchbase data, went to startups with female and male co-founders.

The year-to-date numbers put 2019 on track to be the second-best year for dollars invested into startups with a female founder and co-founder, excluding the $14 billion outsized round in 2018 into female-founded Ant Financial.

Neundorfer, like many partners of micro-firms investing in smart women founders, is looking to bet on the next Away, Glossier, or Rent The Runway. That in mind, let’s start with the billion-dollar ideas that happened to be led by female founders this past quarter.

Supergiant Rounds

So far this year 44 supergiant rounds (those of $100 million or more) have gone to female-founded and co-founded companies. That adds up to 11 percent of dollars invested in rounds over $100 million in the quarter. 

Here’s a look at some of the companies that made up those millions:

• Shivani Siroya started Tala in Kenya as a financial services startup to help individuals who are underbanked safely save, borrow, and grow money. The company raised a $110 million Series D round in August, as reported by Crunchbase News.  

• Cindy Mi and Jessie Chen helped start VIPKID, which connects students around the world to teachers in North America for English lessons. It raised $150 million in a Series D in September, bringing its total known funding to $975 million. 
• Kelly Tiller started Genera Energy in Vonore, Tennessee to make biomass supply solutions for bio-based products. Tiller raised $118 million for her compostable products made from agricultural materials in July. (The company has raised $127 million to date.)

Tala was started in 2013; VIPKID began in 2013, and Tiller kicked off Green Energy in 2008. It’s a reminder that not everyone is Brex, and some supergiant rounds take time to secure.

Glossier, a female-led company valued at $1.2 billion dollars, is another example of how long it takes to raise nine-figures. Founder Emily Weiss told Crunchbase News that when her company was founded five years ago, “beauty wasn’t a category that many [venture] firms were interested in exploring.” Then 2018 came, and it “was a record year for venture funding in the beauty industry.”

She added: “I imagine 2019 might break that record again. Beauty, commerce, conversation, and community are all rapidly moving online, and it’s clear that investors are waking up to the opportunity this creates for a digital-first and customer-centric company like Glossier.” 

But before Glossier became a unicorn, valued at over $1 billion dollars, it had to convince investors it was a valuable bet. To do so, it had to raise smaller rounds when it wasn’t a household (or dorm room) name. So let’s unpack the trends around Series A rounds, or the first institutional round of funding a startup can raise.  

Notable Series A Rounds

Female founded and co-founded companies took home 16 percent of Series A dollars invested in 2019. 

One Series A round that stood out in Q3 2019 was Incredible Health, a marketplace for hospitals to hire qualified nurses with a more efficient matching process. CEO and Co-founder Dr. Iman Abuzeid raised a $15 million Series A round led by Andreessen Horowitz. Another was Honeycomb, which helps engineers debug their code. It raised an $11.4 million Series A funding round led by Scale Venture Partners in September. The company is co-founded by CEO Christine Yen and CTO Charity Majors. 

Large Series B Rounds

Looking one step further on the venture maturity chart, female-founded and co-founded companies took home 16 percent of Series B dollars invested in 2019. 

A Series B company to watch is Glycomine, a biotech startup that develops therapeutics for diseases with no current treatment options. CEO and founder Agnes Rafalko raised a $33 million Series B in August. Another was Vymo, a personal assistant app that helps sales teams. It was co-founded by its CEO, Yhamini Bhat. Vymo’s origins are in India, but it is now setting up offices in New York as well. The company raised an $18 million dollar Series B led by Emergence Capital in July. According to the company, it has 100,000 salespeople at over 50 global enterprises and counting using their mobile app. 

For Amy Banse, Managing Director and Head of Funds at Comcast Ventures speaking at the TechCrunch Disrupt Women’s Breakfast, more women in venture would create a domino effect. Currently, around 11 percent of VCs with check-writing ability are women, up from nine percent a couple of years back. Of the 130 active companies in Comcast’s portfolio, 26 percent have a female co-founder. 

Overall 13 percent Of Invested Dollars Go To Female-founded And Co-Founded Companies

In 2019 through Q3, 13 percent of invested venture capital dollars went to female co-founded startups, up from 10 percent in 2014. The figure, however, is below 2018’s 17 percent.

In 2019 to date, $87 dollars go to male-only founded teams for every $100 invested by VCs. Female-only founded teams are therefore only raising $3 dollars for every hundred dollars spent. Male and female co-founded companies raised $10 dollars for every hundred dollars spent. 

While there are more female-founded and co-founded unicorns than ever before, and therefore proof that there’s a business in investing in diverse founders, global data doesn’t yet live up to this trend. 

So far, 2019’s global deal volume for female-founded and co-founded teams is stable at 19 percent, staying within a 2 percent range from 17 to 19 percent over the last few years.

To Close

So let’s dial back to where we began: a micro-fund that wants to invest in female founders working on ideas with the potential for impressive returns. 

While the data doesn’t quite reflect the sort of proportional change we expect — yet — seeds are being planted in a time where we see billion-dollar companies led by women founders. Perhaps in time, the market will catch up to the data that proves it’s worth investing in “an underlooked asset class that is overperforming.”

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.

For this quarterly report, our analysis is based on announced funding to companies with founders associated. This is in contrast to our overall venture capital report where we use projected data in order to correct for data lags for the most recent quarter. Over time we fully expect more founders to be added to Crunchbase, as well as a reporting lag on funding which will be greater for the most recent quarter. For this report we include private company fundings from seed through to late stage venture. We exclude private equity rounds. 

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.) Based on an analysis of current data for this report, more than 80 percent of dollars raised in the last five years are associated with companies that have founders.

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, equity crowdfunding, and venture series unknown below $1 million. Venture rounds includes early and late stage venture, and corporate venture. We exclude private equity rounds from this report.  

Illustration: Dom Guzman