Funding for female founders remained consistent in 2023

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.”