Female-founded companies in the U.S. raised $44.4 billion out of the $170.59 billion in venture capital allocated last year. Companies with founding teams that are all women raised around $3.1 billion — or 1.8% — which is a dip from $5.1 billion (2.1%) in 2022 and from the $7.3 billion (also 2.1%) raised in 2021’s bull market.
In fact, this is the lowest percentage of venture capital allocated to such teams since 2016, when they picked up 1.6% of all venture funds. There is good news for mixed-gender founding teams, however. Such teams raised 26.1% of all venture capital allocated this year, a sizable jump from the 18.2% they picked up last year. This follows the pattern that women founders still fare better with a male co-founder in the mix.
Kyle Stanford, lead VC analyst at PitchBook, told TechCrunch+ that it’s difficult to pinpoint a single reason why funding to women founders has dipped a bit, but he added that the decline in deal counts for women founders follows the trends of the broader market. Otherwise, he said, data shows there is still a long way to go before the market is seen as equitable.
“Venture has had several tough years, and capital availability in the market has declined significantly. In general, the VC market saw declines of nearly 20% in deal count and 50% in deal value between 2021 and 2023,” he said. “That is not meant to make activity in female-founded companies look better, but the context of market difficulties is important.”
Overall, less than 25% of all deals went to female-founded companies in 2023. The most popular category was software, where around $8.4 billion was invested, followed by B2B, SaaS, and pharmacy and bio. New York City takes the top spot for where women receive the most deals, followed by San Francisco and Los Angeles.
“While it has been a large market for a while, it is beginning to close the gap with the Bay Area in terms of investment count activity,” Stanford said. “New York has become a great market for founders of all types, and right now that is showing through its high VC levels in female-founded companies.”
Women founders can attest that this has not been an easy year for fundraising. Dina Majzoub, the founder of animal healthcare company Vidapaw, started fundraising in October and said investors were hesitant to cut checks. She said that finding money as a woman founder is an uphill battle. “I’ve been asked some things in meetings that my male counterparts wouldn’t blink at,” she said. “One investor even suggested a male co-founder might make Vidapaw more fundable.”
For the most part, she is optimistic for the year to come. She said the landscape for female founders hasn’t radically changed and that women are adapting to play the game better. “While awareness around gender disparities in VC funding has increased, the actual capital flow still lags. It’s a learning curve: Each no is a lesson in relationship-building and navigating a male-dominated arena,” she said. “The funding gap persists, but our resilience and strategic networking are slowly bridging the divide.”
Maya Watson, the co-founder of SaaS startup Manual, spent the entire year raising and is close to finishing her round. She said she didn’t see much traction in the spring but received more inbound toward the end of the year.
Raising in a bear market has had its benefits, though, as investors are paying closer attention to who they are cutting checks to. “I’m excited and hopeful about the companies who are raising in this window,” Watson, who is a first-time founder, said. “I think they’re going to be really solid because the evaluation process feels really thorough and thoughtful.”
Majzoub said she noticed that investors are already more enthusiastic about market conditions this year. “There’s real energy. Investors are getting their pens ready,” she said. “It’s a tougher climb for us women founders, but the view’s starting to look pretty good.”