Female-only founding teams have received just four per cent of the total capital raised by founders so far in 2024, according to the latest Cuthrough Venture report.
That means 2024 – so far – is actually down on the already dire 2023 result, where just five per cent of total capital raised went to female-only founded teams.
Meanwhile, teams with at least one female founder have raised just 13 per cent of the total capital so far in 2024 – significantly down on the 23 per cent figure recorded for such teams in 2023.
So once again, all-male teams come up trumps when it comes to receiving the capital required to start, grow and scale a startup.
This is a missed opportunity for innovation and the Australian economy.
A separate report today released by Enterprising ME outlines a case for a $135 billion economic gain for Australia that could come from levelling the playing for women entrepreneurs.
These lost opportunities come in the same quarter that we learned the Federal government would be axing the Boosting Female Founders (BFF) program, an initiative that since 2020 and across two different governments has been a key aspect of “gender equality” initiatives, with former Minister for Industry Science and Technology Karen Andrews describing the introduction of the program as about “creating opportunities for all”.
The program was plagued with challenges from the outset, including a 2021 blunder that saw it emailing more than 1000 applicants to let them know they had advanced to the next round when they had not. The program was due to allocate $52.2 million in funding, but its early termination means it will disburse less than two-thirds of that, just $35.2 million.
However, there has been a slight improvement in the three months from July 1 to August 31, according to the latest Cut Through Quarterly Q3 2024 report.
That improvement is in women’s representation in deal participation. The report notes a record level of participation for female founders at the pre-seed stage – where women were involved in 50 per cent of the reported deals. Women also achieved a five year high representation level at the seed stage. And 54 per cent of accelerator funding rounds included female founders.
But there’s a significant “gender gap” in the median deal size between all male and all female teams.
The median deal size in the first nine months of 2024 was $3 million for all male founding teams and $2 million for all female founding teams. The all-female founder media deal size is also significantly down on what was recorded in 2021, at $2.5 million.
Things are faring much better for mixed gender teams, at $2.7 million so far in 2024.
Funding to mixed-gener teams reaches its highest level in the quarter since the first three months of 2023. The report notes that there was at least one woman founder among three startups that raised rounds exceeding $20 million. The largest deals involving at least one female co founder included the startups Kismet ($33 million), Drift ($25 million), Volt ($20 million), Tactiq ($11 million) and RDC Rich Data Co ($9 million).
The healthcare startup Kismet has five founders (pictured above), including Lauren Grimes.
Overall for all founders, there were 92 venture capital deals were done in the three months from July 1 to August 31, raising a combined $695 million – less than half of the $1.5 billion raised in the second quarter. The drop reflected the disappearance of “mega deals” worth more than $100 million.
But the volume of deals was up in previous quarters – the highest in five quarters – especially across the seed stage (representing a third of all non-accelerator deals) and an uptick in Accelerator rounds.
This meant that overall female representation in deals was up, with women-led startups accounting for 50 per cent of those involved in pre-seed stage deals and 54 per cent of accelerator deals including female founders.
But women founders continue to remain seriously underrepresented regarding the overall share of funding, with just 20 per cent of the $695 million in deals done going to founding teams involving at least one female co founder.
There were no women in the founding teams of the four largest deals, including the biggest $75 million for safety culture, followed by $60 million in funding for Grown Inc, $50 million for InDebted, and $35 million for Shift. The fifth-largest deal was the $33 million for Kismet, involving one female co-founder,
There is optimism in the rate of women’s participation in deals improving, as is what we’re seeing at the pre-seed and seed level rounds.
While 2024 does not look on track to achieve the significant change we need to see more overall funding flowing through to female founders and co-founders, there is opportunity ahead in 2025.