TLDR:
– Only 4% of venture capital funding in 2023 went to 100% female-founded businesses.
– Female-led entities are seen as a missed opportunity by experts in the field.
Just 4 per cent of the total $3.5 billion in venture capital funding in 2023 went to 100 per cent female-founded business. This is according to the latest State of Australian Startup Funding report, which found that 26 per cent of the funding went to businesses with at least one female founder, and 70 per cent went to male-founded businesses. While this is an improvement from previous years with women founder funding having doubled since 2022, global scaling expert and FD Global Connections founder Trena Blair said there is still a significant amount of work to be done to lessen the gap between female founder-led organisations and their counterparts.
Blair predicts that this is the time for female-founded companies to thrive, as investors are becoming more risk averse due to the cost-of-living crisis and are looking for longer-term investments. She believes that female founders, with their traditionally frugal business practices, will shine in the current climate.
The report also highlights modest improvements in gender diversity in the startup funding space, with participation in deals by female or mixed-gender teams increasing to a five-year peak. Overall, 2023 saw a recovering funding environment, with decreased deal volumes and sizes, and valuations as markets forced investors to be more conservative.
As 2024 approaches, there is a more positive outlook for Australia’s startup funding market, with expectations of fundraising by multiple VC firms and a more diverse group of founders, builders, and investors being empowered. The industry is urged to embrace ambitious goals and nurture the reservoir of talent available.
