Bay Area still dominates with 'unicorns' globally but women-led startups have lost ground

The Bay Area continues to pump out more so-called unicorns than any other region around the world, but despite raising a record-breaking amount of funding last year, fewer female-founded startups broke through to the coveted $1 billion valuation, according to a new report.

Despite the average valuation of unicorns more than doubling from $3.1 billion in 2017 to $7.5 billion in 2021, the share founded by women dropped by more than half over the same period, it says.

Affinity, a relationship intelligence platform based in San Francisco, analyzed data from over 1,700 venture and private capital firms that use its software to get a picture of how deal-making and valuations have evolved between 2017 and 2021.

While unicorns are no longer as rare as they were when the term was coined by Aileen Lee in 2013, only 2.5% of startups currently reach such a milestone and more still come from the Bay Area than anywhere else in the world, according to Affinity's new "Relationship Intelligence Benchmark Report: Unicorn Edition" released today.

There have been around 950 unicorns emerge globally since 2017 and 59% are from the US, largely concentrated in the Bay Area, according to the report. China has clocked the second largest number of unicorns at 13%, followed by India at 6% and the UK at 4%. 

In 2021, the US took a smaller share of the top 20 companies — 43% compared to 60% in 2017 — but still dominated, followed by the UK at 19%.

There are more than 250 startups in the Bay Area with valuations of at least $1 billion, according to PitchBook. Among them, the top five are Stripe ($152 billion), Instacart ($45 billion), Databricks ($38 billion), Juul ($38 billion) and Waymo ($30.8 billion) — all founded by predominately white men.

I crosschecked data between PitchBook and Crunchbase and couldn't find a single female founder in the top 10 Bay Area startups by valuation, and not a single all-female founded team shows up in the top 50.

In 2017, 13% of unicorns were founded by women, and only 6% in 2021. Affinity acknowledges in its report that there could be a potential delay in the data because, on average, startups that achieve unicorn status are 7 years old.

Affinity’s report didn’t include data on racial diversity, but founders of color still raise a fraction of the total venture capital spent in the US, as well. Black and Hispanic founders received just 3.5%, combined, of all funding nationally last year through mid-December. 

And there are only nine Black-founded startups in the US that are valued at $1 billion or more, according to Crunchbase. They are (in no particular order):