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Source: Worawee Meepian, Shutterstock
Summary
- Venture funds to female-founded start-ups declined globally by around 27 per cent in 2020.
- The number of female-founded start-ups grew significantly since 2015.
- VC funds to such companies in the US dropped 31 per cent in the first 3 quarters of 2020.
While the pandemic has disproportionately impacted women in the workplace, funds from venture capital firms to female-founded companies have also dropped significantly, show multiple studies.
According to Crunchbase, a business information platform, venture funds to female-founded start-ups may decline around 27 per cent to US$4.9 billion in 2020, compared to the previous year. The estimate may slightly vary as some of the companies were still to report, it said.
Furthermore, the income of female-only founders has also declined, from 2.8 per cent in 2019 to 2.3 per cent in 2020. Funds to such companies also tend to fluctuate from year to year, its findings show in December, but they have not been widely covered in the media.
However, when a female-founded company raises a huge amount singlehandedly, as in the case of Ant Group in 2016 and 2018, it often makes a huge impact, it said.
Pic Credit: Pixabay.
Fewer Lone Female-Founded Companies
Further pointing at the gap between female and male founders, it said that of the 120 unicorns to join the Crunchbase Unicorn Board in 2020, only 10 were female founders.
But firms that have a male co-founder, may see steady funding. One of its surveys has shown that such firms consistently received above US$20 billion annually.
However, the larger picture is not so bleak. Interestingly, the number of female-founded start-ups, which have raised funds themselves, grew to 4,200 since 2015.
And the number of companies that had male-female co-founders rose to 7,700 in 2020, which was an increase of 72 per cent from the period between 2011 and 2015, according to Crunchbase.
Also, the total amount of funds raised by the solo female founders rose significantly since 2015, compared to the 2011-15 period.
Another report from PitchBook, a New York-based data research firm, shows that venture funds to female-founded companies in the US dropped 31 per cent to US$13.8 billion in the first three quarters of 2020, compared to the same period in 2019.
Female entrepreneurs have been the worst hit in the pandemic, the study noted.