In 2023, the percentage of U.S. enterprise capital funding going to startups with at least one female co-founder reached a new high. In fact, a quarter of all funding – $34.7 billion – was invested in firms with at least one female founder, Crunch Base data shows.
The increase in the share of startup investments going to women-founded firms – from 15% in 2022 – was largely driven by multiple billion-dollar-plus rounds raised by AI firms with a female co-founder.
For example, OpenAI raised the largest financing deal in 2023 for $10 billion and established a model company Anthropic this 12 months, it raised greater than $6.5 billion in 4 rounds of funding. Both firms count women among their founders.
In the AI sector in particular, in 2023, over 50% of U.S. investments went to AI firms with at least one woman founder, totaling roughly $21 billion in over 360 rounds.
However, this was due to several large funds that skewed the numbers. Most funded AI startups in the U.S. didn’t have a female founder – according to Crunchbase data, almost 20% of AI funding rounds this 12 months went to firms with a female founder.
However, OpenAI and Anthropic weren’t the only AI firms co-founded by a woman to receive significant funding offers. Several other unicorn firms – private startups valued at least $1 billion – have female founders and have joined the Crunchbase Unicorn Board in 2023. These include: AI supporter, Repeat AND Imbueamong others.
While female startup founders have by no means achieved parity when it comes to investing dollars for their firms, the ground is slowly shifting in a more positive direction, and there are more women than ever in the startup ecosystem.
“While high-profile and significant investments in women-led AI startups are encouraging, they may create the impression that progress is faster than it actually is,” she said Rudina Seserifounder and managing partner of an early-stage artificial intelligence investment company Glasswing’s venturesthrough email.
“It is important to support women founders at an early stage to ensure sustainable and sustainable growth throughout all stages of funding,” she added.
A decade and a countdown
Crunchbase added gender information to its dataset in 2015, becoming the first database of private company and enterprise fund data to do so. Since then, we have been tracking the funds given to female founders.
During this time, the enterprise ecosystem has experienced massive changes – led by the pandemic-related economic surge and subsequent slowdown in the second half of 2022.
Throughout the years that have seen a surge in enterprise capital funding and with tremendous growth, particularly in late-stage startups, the percentage of funding for firms with female founders has not declined.
Over $30 billion as of 2021
While female startup founders in the U.S. saw a significant increase in the percentage of enterprise dollars received by their firms in 2023, last 12 months was not the largest annual amount invested in firms co-founded by women, according to Crunchbase data.
In 2021, nearly $48 billion, or 14% of U.S. enterprise capital, was invested in firms co-founded by a woman. The leading sectors this 12 months were health care and biotechnology, with $20 billion invested in firms with female founders.
During the peak of the enterprise capital financing market in 2021 and a strong first half of 2022, financing for female-founded enterprises remained at 14% and 15% of invested capital, respectively, which is a year-ago percentage or higher than 2015 r.
Apartment for women only
Funding amounts for women-only businesses have risen and fallen with market changes in recent years. However, the financing percentage remained stable compared to the previous 12 months and amounted to 3% of financing amounts. As of 2015, the percentage ranges from 2% to 3%.
The proportion of the funding amount for firms co-founded by women and men ranged from 9% to 12% between 2015 and 2022, but increased in 2023.
While these proportions were inside a narrow range before 2023, their amount and size have increased over the years as enterprise capital has grown.
Financing counts higher
The proportions of funds are normally higher than the amounts invested in firms founded by women.
(This trend reversed in 2023, when funding was 4 percentage points lower, as AI firms co-founded by women and men raised disproportionate amounts.)
In 2023, women-founded firms accounted for 8% of deals – flat year-on-year – while firms founded by women and men fell several percentage points from their 2021 peak to 14% of deals.
As of 2016, total funding for businesses with at least one female founder ranged from 19% to 24%, with the percentage being 23% or more in 2019-2022.
By stage
How to settle more rounds than amounts in the case of firms whose founder is a woman?
Companies with female founders account for a higher percentage of seed and early-stage financing. Late-stage funding numbers show a lower percentage.
However, since 2015, the percentage of late-stage deals has shown the largest increase over this timeframe as seed and early-stage deals mature into later-stage firms.
In 2023, late-stage deals increased to 16% of deals compared to 14% a 12 months earlier. It shall be interesting to see whether this upward trend continues as women-founded businesses mature.
To sum up
While progress in funding female startup founders has been slow and still has not reached anywhere near parity, 2023 has brought new hope that female-founded startups will proceed to see gains, especially with the emergence of new technologies like artificial intelligence.
Women have founded some of the most vital firms in the new wave of generative artificial intelligence. In recent years, AI firms have raised some of the largest rounds of funding and reached billion-dollar valuations at a faster rate than other sectors.
Time will tell whether the AI wave – and the advantages it has brought to female founders – will end, or whether 2023 will prove to be an outlier. In the meantime, it’s encouraging to see female startup founders taking a leading role in building one of the most revolutionary technologies of our time.
Methodology
The data in this report comes directly from Crunchbase and is based on reported data. The data provided is as of May 29, 2024.
Our evaluation is based on announced financing of U.S. firms whose founders are affiliated. We cover financing for private firms ranging from seed to late-stage ventures, in addition to corporate and private equity financing to venture-backed firms.
The Crunchbase dataset continues to grow, but there are gaps. The company may not have founders listed on its Crunchbase profile, or Crunchbase may not have the founders’ gender listed. (Note: In addition to “male” and “female,” there are over twenty other gender-related tags in Crunchbase.) Based on an evaluation of current data for this report, over 95% of the dollars and 90% of the transactions have since been raised was implemented in 2015 in the USA and is associated with firms whose founders are on the list.
Crunchbase, like all private market transaction databases, has a documented pattern of reporting delays. Some rounds can sometimes take weeks or months to be announced publicly and then added to Crunchbase. This is particularly true in the last 12 months and in seed and early-stage deals, which firms often enter into before a product launch or otherwise receive significant external media attention by disclosing information about their financing history. As data is added to Crunchbase over time, some of the numbers in this report may change barely.