Access to venture funding for women is poor all over the world, but it’s particularly concerning in Australia, where less than 1% of all private-sector funding in the country went to solely women-founded and -led businesses in 2022. Down under, only 3% of venture capital funding went to all-women-founded teams, and 10% went to teams with at least one woman founder.
A downward trend is emerging. In 2021 and 2020, 21% and 25%, respectively, of VC funding in Australia went to startups with at least one woman founder.
For women of color, that number is even worse. A report commissioned by consulting firm the Creative Co-Operative found that in 2021, despite a record increase in VC funding in Australia — about $10 billion — just 0.03% went to Bla(c)k women and women of color founders. (In Australia, “Bla(c)k” represents Aboriginal and Torres Strait Islanders, African Australians, Pacific Islanders, etc.)
Tracey Warren (pictured above center), CEO of F5 Collective, an Australian VC firm and advocacy group that’s backed by a U.S. family fund, said she’s worried that women will see those statistics and wonder, “What’s the point? I can’t get funding anyway. I’m just gonna give up.”
That’s why Warren and the F5 Collective sponsored a California bill that mandates VCs to report the diversity of founders they’re backing, including race, disability status, gender and LGBTQ+ status. SB 54, which Gov. Gavin Newsom signed in October, goes into effect March 1, 2025.
“Anything that goes on in Silicon Valley has a ripple effect across the world,” Warren told TechCrunch+. “We needed a precedent, to set a framework to then take to the rest of the world.”
F5 has already invested in eight Asia-Pacific, woman-led startups (and is targeting 12) using its $5 million proof of concept fund, which came from the family office of Kelly Kimball, co-founder and executive chairman of Vitu and chairman of F5. The VC aims to raise another $100 million for its Fund 2 in the spring of 2024. That money will be used for follow-on funding for its current portfolio companies, and to help F5 reach its goal of investing in 1,000 female founders in APAC by 2030.
F5’s investment mandate is broad. The VC will invest in tech that shapes our future and social and environmental impact technology. The founding teams can be mixed, but a woman founder has to be in a position of actual leadership.
“None of that giving a woman 2% equity and shoving her into a founder title,” Warren said.
Beyond just giving women money, Warren and F5 want to create generational change for a billion women across India, Southeast Asia and Australia. The fund is just one piece of a five-pillar strategy that includes mentoring women to be angel investors, working with corporations to facilitate pilots and use cases for women-led startups, and advocating for policy changes.
That’s where California SB 54 came in. “What gets reported and measured gets changed,” Warren said. “If we don’t start reporting, we’ve got nothing to start with.”
Advocating for political change
Policy is F5’s second pillar. Enacting political change can be more difficult in Australia than it is in the U.S., in part because lobbying isn’t as robust down under, Warren said. She also said passing a bill like SB 54 in Australia would be difficult, to say the least, and take much longer than the three months it took to pass the bill in California.
In October, 60% of Australians voted “no” in a referendum to recognize Indigenous Australians in the country’s constitution and establish an Indigenous Voice to advise Parliament on issues affecting Aboriginal and Torres Strait Islander people.
While a bill like SB 54 makes its way through Australia’s federal government procedures, F5 wants to pursue multiple smaller wins.
One of the levers F5 hopes to pull in Australia is incentivizing VC firms to report diversity data by tapping the funds’ LPs. Warren said she’s begun discussion with superannuation funds to start putting top-down pressure on Australian VCs.
She also hopes to work on policy that gives tax breaks to VCs who invest in women and people from historically unrecognized groups.
“These big funds have made a shitload of money doing what they do for a number of years,” Warren said. “What’s the incentive to change? Some will, some won’t. How do we now start enabling and incentivizing a whole new wave of investor to turn up?”
Corporate partnerships and angel investing
Women founders in Australia struggle to get pilots, use cases and customers locally, and many find they have a better shot at picking up a pilot in the U.K. or the U.S., Warren said. “This piece will look like working with industry groups and really understanding procurement,” she said, noting that F5 aimed to launch this pillar in the second half of 2024.
Around the same time, the firm hopes to launch the F5 Angels, its answer to bringing more women to the investment landscape.
The F5 Angels network will kick off with a pilot that selects five women of diverse backgrounds who have a circle of influence, like an ecosystem operator, a founder or a domain expert. F5 will mentor them and teach them how to analyze an investment, write up an investment thesis, do due diligence, present to an investment committee and more, according to Warren, who mentors about 60 women founders and investors today.
F5 will reserve a $50,000 portion of its second fund for the women in this initial cohort to use for investments across five ventures.
“When I started talking to the ecosystem about this piece, so many women who were already angel investors said, ‘When we turn up to Melbourne Angels, it’s 60 white dudes, and we don’t want to be there. Can we be part of your group?”
Evolving the investment landscape might help spark more funds that aren’t just geared toward B2B SaaS, which Warren said is most common in Australia because it’s an infinitely scalable product. Women-founded businesses don’t always fit that mold, but they do solve problems in other industries.
A global mission
F5’s final pillar is a philanthropic one. Warren said she’s already in talks with the UN Capital Development fund around grassroots entrepreneurship programs to lift women out of poverty across India, as well as financial literacy programs for women.
Warren is aiming to launch the F5 Foundation by the end of 2024 and said it will be funded via a portion of the fees and carry from Fund 2.
“When our first $5 million proof of concept turned up, I quickly realized that it wasn’t enough. As in, we can’t fund our way out of these problems, and it doesn’t matter how big the fund gets,” Warren said. “I can only help, what, 20, 30 women, and it’s not going to change anything. It’s not going to leave a legacy. So I stepped back and thought, how do we think bigger? How do we create that generational change for a billion women across India, Southeast Asia and Australia?”