Venture capital deals slowed down dramatically last year, but startups led by women saw a smaller decline than the industry as a whole.
Startups in the U.S. with at least one female co-founder raised 28% less funding in 2022 than the previous year, but they weathered a tough economy better than the industry at large, according to a report from the Female Founders Fund.
Globally, venture capital investments dropped 35% to $445 billion last year from $681 billion in 2021, according to Crunchbase. And in the U.S., funding dropped 31% over the same period, according to a report from PitchBook and the National Venture Capital Association.
Female founders have been "resilient in navigating this tough macroeconomic environment, and have not been disproportionately impacted by the market downturn," the Female Founders Fund said in a blog post.
Based in New York and San Francisco, the venture firm cited data from both PitchBook and Crunchbase.
Despite last year's slowdown, startups in the U.S. with at least one female co-founder took more than 18% of all the capital deployed, a 74% increase over the amount raised by such companies in 2020, the report said. Early-stage investing was particularly strong.
"While the overall numbers may look bleak, it is important to note there has been consistent growth for female founders raising institutional capital at the Series A," the firm wrote.
The average Series A for female-led companies has increased every year over the past three years to $14.8 million in 2022 from $14.2 million in 2021 and $9.2 million in 2020. More than half of those rounds went to startups in the Bay Area and New York, with Bay Area founders taking a full third.
While the deals going to female-led startups are still smaller on average, the industry overall saw a drop in average Series A round sizes in 2022 to $20.8 million from $25.6 million the year before, though still up from $16 million in 2020.
The number of female-led companies reaching so-called unicorn status dropped to only 13 last year, as well, compared with 83 in 2021.
But female-led companies also burn less cash than the industry on average and are exiting 12.5% faster at 7.2 years compared to 8.1 years for the industry overall.
Racial and ethnic diversity still lags, though, and 85% of female-founded startups at the Series A level were led by white women.
One of the largest funding rounds in the Bay Area last year went to TeraWatt Infrastructure in San Francisco, which is led by CEO Neha Palmer. The startup is building out electric vehicle charging infrastructure for fleets and raised $1 billion in a Series A round.
The report also highlighted a few other notable female-led startups in the Bay Area that had successful Series A rounds or reached $1 billion or higher valuations last year including:
- Commons, formerly known as Joro (Oakland), a consumer app that gives people insights into the carbon footprint of their purchases, raised a $10 million Series A.
- Veev (San Mateo), which designs and manufactures prefabricated homes, raised a $400 million Series D round at $3.36 billion valuation (though PitchBook data puts the valuation at $1 billion).
- Athelas (Mountain View), an at-home blood diagnostics and monitoring, was valued at $1.56 billion after raising a $59 million Series B.
- MinIO (Redwood City), open-source data management for unstructured media like photos, video and audio, was valued at $1 billion after raising a $103 million Series B.
