Funding to U.S.-based AI companies with at least one woman founder has steadily increased over the past few years, according to Crunchbase data.
Last year, such companies raised $3.61 billion out of the $23.5 billion allocated in total to U.S. AI startups, or around 15.38%. That is a steady year-over-year increase. In 2021, for example, AI companies with at least one woman founder raised 13.2% of all capital raised in the sector. In 2020, that was 11.6%, and 11.5% in the pre-pandemic year of 2019. This is exciting.
Usually, in times of a venture pullback, women and people of color are negatively affected as investors retreat to the traditional networks they deem safe. Keep in mind that it’s possible that this data is slightly inflated because it counts all companies with at least one woman founder; usually, all-women teams raise much, much less than mixed-gender teams, giving way to the narrative that the presence of a man always adds — or, in this case, sustains — the value of a woman.
Data visualization by Miranda Halpern, created with Flourish
Still, it’s quite nice to see women receiving checks in this sector. More money to women-founded AI companies is essential to helping the industry become more inclusive. AI bias is still rampant; just 26% of AI workers worldwide are women. When women are given a chance to launch and sustain companies, it’s proven that they hire other women.
Layla Li, the founder of KOSA AI, a software that audits, explains and monitors AI developments for bias and risks, said that there’s also a pressing need for more inclusive datasets to be built for everything ranging from voice bots to resume scanners.
“If the gender gap in AI is not solved, the technology we produce can only generate outcomes that look like history but don’t represent our future,” Li told TechCrunch. “Women are already leading the way.”
Aparna Dhinakaran, who founded Arize AI, said it was “absolutely exciting” to see these funding stats. “It opens the doors for others from underrepresented backgrounds to see themselves in these roles and gets me excited about a more equitable future,” she told TechCrunch.
Lightship Capital’s Alexis Alston shares Dhinakaran’s excitement over women getting more funding. “And it’s very exciting to hear that women are thriving in one of my favorite industries,” she told TechCrunch. “This is a great pathway to women getting more high multiple exits over the next few years.”
Alston said she hopes the increase in funding indicates that firms are working toward being more intentional with their investing. “Even in our own pipeline, we’re seeing significantly more diverse founders building in AI today than when I started investing years ago,” she said. “Let’s get these women funded.”