Women Led Startups’ Contribution To Total Startup Funding Plummets To unprecedented 5% In 2023.
When an unprecedented funding winter freezes a vibrant ecosystem, do all startups suffer equally? For Indian startups, 2023 had been a challenging year as overall funding hit a seven-year low, tumbling to the levels of 2017.
As capital dried up across sectors and genres irrespective of funding stages, many women-led startups failed to attract venture capital despite the big strides made towards gender inclusivity.
India is not the lone sufferer. Globally, too, female founders lacked the much-needed financial backing from investors due to gender-based stereotypes and a limited number of iconic role models.
According to PitchBook-NVCA Venture Monitor, U.S. startups with at least one female founder bagged 26.1% of the VC pot in 2023, while all-women founding teams secured less than 2% (1.8%, to be precise) of the total deal value in the same year. Even in 2021, a year flush with VC money, female-led startups in the EU barely raised 2% of the funding, per a Reuters report.
Closer home in India, , women-led startups raised $480 Mn+ in 2023, an 80% decline compared to $2.4 Bn+ secured in the previous year, according to Inc42’s Indian Tech Startup Funding 2023 Report.
As for deal count, women-led startups saw a more than 50% dip in 2023 to 118 from 238 in 2022. In the Indian context, we have included co-led entities with at least one female founder, all-women teams and female solopreneurs.
Of the $10 Bn collectively raised by the Indian startups in 2023, 5% was scooped up by women-led businesses. It was lower than the previous year, when women entrepreneurs bagged $2.4 Bn+, or 9.6% of the $25 Bn funding.
Nevertheless, the highest amount in 2023 was raised by Pixis, a co-led martech startup founded by Shubham A Mishra, Vrushali Prasade and Hari Valiyath. It offers a codeless AI infrastructure for scaling up marketing efforts and has raised $85 Mn from a clutch of investors, including Touring Capital, Grupo Carso, General Atlantic, Celesta Capital and Chiratae Ventures.
Are Female Founders Falling Prey To Gender Bias?
According to Inc42 data, women-led early stage startups raised the lowest funding in 2023 at a little over $56 Mn, while growth and late stage businesses secured $198 Mn and $189 Mn, respectively.
There is a pressing need for heightened gender neutrality and an equitable evaluation process for more equitable funding across the investment ecosystem. With investors sitting on more than $23 Bn dry powder, 2024 may bring new hopes for female founders if the stage is set for diversity and growth.
