According to PitchBook’s “All In: Female Founders in the US VC Ecosystem” report, companies founded solely by women received just 2% of the total capital invested in VC-backed startups in the United States in 2022. In Europe, the percentage was even lower, at 0.9%. These figures reveal the venture capital ecosystem’s ongoing struggle to achieve gender equity.

Venture Capital Funding for Women Founders is Trending Up, but More Progress is Needed

While the numbers may seem discouraging, the data does indicate a positive trend. VC funding for companies founded or co-founded by women has been trending up in recent years. In 2021, several women-led funds and incubators for female founders were created. However, VC markets in 2022 faced a challenging year, with female-founded companies in the U.S. experiencing similar lulls in deal activity as the overall market. Nevertheless, they appeared to have not been disproportionately affected by the decline in activity compared to previous slowdowns.

U.S. Startups with Mixed Founders Raised More Money

PitchBook’s data shows that companies with at least one female founder raised about $38 billion in venture funding over 3,503 deals in 2022, while startups with only female founders received $4.3 billion over 926 deals. These figures represent a sharp decline from 2021, although they are still the second-highest annual totals on record. It is also important to distinguish between companies with mixed founder teams (female and male) and startups with female founders only.

Women Garner More Venture Capital Funding with Male Co-founders

While funding for female-founded companies has declined year-over-year, the share of female co-founded VC capital increased to 16.5% of total U.S. VC funding in 2022, the highest it’s been since 2017. For female-only founded startups, however, that number is 2%, the lowest it has been since 2016. In January 2023, U.S. VC funding for female-founded or co-founded companies trended up to 17.6% and 2.5%, respectively, of total U.S. VC funding. It appears that the trend is heading in a positive direction.

European Women Have a Harder Time Raising Money

In Europe, the numbers are lower. Capital invested in female co-founded companies amounted to EUR 17.7 billion in 2022 across 2,531 deals. Funding for female-founded companies declined from 2021, but it was higher than previous years. In Europe, VC funding for female co-founded companies declined to 12.2% of total European VC funding in 2022 from 14.7% in 2021. It was the lowest level since 2014. The funding for female-only founded startups was 0.9% of the total capital invested, the same as 2015. However, there has been a recovery in deals and funding in January 2023.

Tech Is the Largest Industry for Female Founders

Technology is one of the most popular VC industries and by far the largest industry for female founders by deal value. According to PitchBook data, U.S. female founders in tech closed $26.8 billion in the first three quarters of 2022, just shy of the amount closed by the third quarter of 2021 and 54.3% higher than the amount raised in 2020. Also in Europe, tech is the largest industry for female founders by deal value, and software is the biggest segment with EUR 4.1 billion invested (as of end January). Healthcare is another large industry both in the U.S. and Europe.