Despite more women investing in startups in Florida, there still is a gap in venture capital funding for startups led by women, especially in Orlando.
An Oct. 19 report by Tampa-based innovation hub Embarc Collective found the proportion of venture capital funds in the Sunshine State for women-led startups ticked up from 7% in 2019 to 8% in 2020. Still, Florida is below the national average of 11%.
Meanwhile, women-founded startups in Orlando last year raised a negligible amount of venture capital compared to Tampa, Miami and markets outside Florida such as Nashville, Denver and Minneapolis. The graphic below shows how Central Florida compares.
This disparity exists despite metro Orlando companies last year raising more venture capital ($416.5 million) than metro Tampa firms ($247.7 million), according to data from PitchBook and the National Venture Capital Association. Miami was the No. 1 market in Florida, with $1.08 billion in venture capital raised last year.
Access to venture capital is important because companies often use it to scale their workforces, develop products, boost sales efforts and more. In turn, these funds can spur growth at high-tech companies and create high-wage jobs and new, innovative solutions for the region.
Women’s representation in startups
Here's a closer look at the report's findings on women representation in Sunshine State startups:
- Only 18% of new startups in Florida have a female founder, down from 23% in 2019.
- Like last year’s report, 42% of women said access to capital was the main challenge, but 2020 also brought an issue in finding talent, with 21% of respondents agreeing. In comparison, male-founded companies state their most significant issue is building a business in a smaller market.
- The 8% that received backing was across 92 funding rounds and represented 15% of the state’s overall funding rounds.
This is not the first time a report identified shortcomings in the representation of women in metro Orlando's tech sector. Commercial real estate firm CBRE's 2021 Scoring Tech Talent Report found Orlando is the fourth-least diverse market when it comes to women in the tech field. Women make up 25% of Central Florida's tech workforce, compared to women making up 53% of total office workers, according to the July report.
Still, Embarc Collective's report did highlight a local success story: Lisa Catania, founder and vice president of client success at Orlando-based OneRail. The last-mile delivery software firm in August closed a $9 million investment round, and the company expects to employ 200 people by the end of next year.
Of course, one of Central Florida's most prominent founders in Suneera Madhani, CEO of Orlando-based Stax. The homegrown fintech startup is on track to hit unicorn status of a $1 billion valuation.
The report is an indication of how the Covid-19 pandemic and subsequent economic fallout in 2020 may have negatively affected Florida's women-founded startups, Lakshmi Shenoy, CEO of Embarc Collective, said in a statement. “Despite many wins, it’s clear there is still a need for support and services that address the glaring gap of women in entrepreneurship in our state.”
Women’s representation in investing
Meanwhile, Florida experienced a boost in the number of women investing in these companies.
- There was a 36% increase in the number of women at Florida-based investment firms in 2021
- But Florida still is behind when it comes to the percentage of women at venture funds, with 21% versus the 36% national average
Embarc Collective published its second annual Glaring Gap report with funding from JPMorgan Chase (NYSE: JPM). The report looked at data of Florida startups funded from 2011 through 2020, totaling 2,675 startups. This is in conjunction with the Tampa Bay Wave/Embarc Collective TechWomen Rising Accelerator program, which is mentoring 12 local, women-led startups.
To hear more executives weigh in on the state of female investors in Florida, read the Tampa Bay Business Journal’s Women Who Lead panel here.
You can view the full report here.
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