Female-founded companies are raising venture capital at significantly higher levels than at any point in the last decade, suggesting that long-standing efforts to boost representation in entrepreneurship are paying off at an accelerating rate.
In the first half of 2021, US venture-backed companies with a female founder or co-founder took in $25.12 billion, more than the total amount raised in any prior year.
The advances come as women founders raise a greater share through late-stage deals and high-value sectors. Also helping: More women are writing checks at VC firms, and the networks of female founders in places like New York have matured.
But a deeper look into the data highlights stubborn realities for female founders. The gap in funding between all-women teams and mixed-gender teams continues to grow. And female-founded startups' share of overall VC dollars remains small. For more charts and fresh data, visit PitchBook's Female Fouders Dashboard, which is updated quarterly.
Female-founded or co-founded companies have taken in ever-larger sums of late-stage funding, which is one of the main drivers of the surge in overall deal value.
Late-stage deals in 2021 have topped $20 billion, easily on pace to nearly double the total for all of 2020. This shatters 2019's decade high of nearly $12 billion, according to an analysis of PitchBook data.
The average value for late-stage deals has also skyrocketed this year, reaching nearly $34 million.
The upshot is that these deals now make up a larger-than-usual share of money raised by companies with a female founder, according to the data. After years of hovering around 50%, about two-thirds of this year's total deal value has come in the late stage.
Medical practitioners turning into entrepreneurs is a common path in the healthcare industry—and one that has proven fruitful for female founders.
"The life sciences and biotech sector has always had a more balanced approach in terms of gender because of the supply of trained experts in these fields," said Abby Levy, co-founder and managing partner of Primetime Partners.
Investment in healthcare companies with a female founder or co-founder has steadily grown, now comprising more than 43% of dollars raised so far this year. In 2011, that share was less than 25%.
Drug discovery company Insitro raised a $400 million Series C in March, marking the largest deal for a female-founded company this year. Another notable healthcare VC deal was the $62 million Series C raised by femtech startup Kindbody in June.
For the venture capital world at large, the Bay Area is the center of the known universe. San Francisco's enduring status shows how the network effect is an essential element, like capital and talent, in creating high-growth businesses.
For female founders, New York is the leading metro area of entrepreneurial activity. In recent years, the city has seen 27.4% of all deals for companies founded solely by women, more than San Francisco's 23.6% share.
The city is home to the Female Founders Fund, a woman-led VC firm that closed its third vehicle at $57 million earlier this year. New York has also produced many well-known consumer brands founded by women, like beauty company Glossier and ecommerce platform Rent the Runway.
VC firms with at least one female decision-maker have raised over $40 billion every year since 2018, and 2021 is on pace to set a new high-water mark.
While the trend is encouraging for female founders, the numbers pale in comparison to the overall VC market's rise in fundraising activity over the years.
"One of the reasons why it's been hard for female-founded companies to attract funding is that only a small percentage of venture capital dollars are controlled by female VCs," said Elizabeth Edwards, founder and managing partner of H Venture Partners, a female-owned venture capital firm.
The raw numbers show a quantum leap for female founders, but it's easy to lose sight of what that means in the broader narrative of booming US venture capital investment.
In this context, the progress is more sobering. For the pool of deals where the founders' genders are known, startups with all-male founders raised around 75% of all rounds in the last three years. Over a longer time span, there has been consistent incremental progress, with the all-male founder share declining from 85% in 2011.
In terms of deal value, male founders have taken in 83% of deal dollars this year, which is in line with recent years. Late-stage deals capture an outsized proportion of deal value, so the trend of female founders capturing more late-stage deals could help to close this gap in the long term.
While the total and average deal value for companies with only female founders have grown over the years, they are far behind the growth seen by those with both male and female founders, according to the data.
One major contributor to this disparity: Companies with only female founders have raised late-stage rounds that are half the size, on average, of deals by mixed-gender founders so far this year.
The difference in fundraising between companies with only female founders and those with both male and female founders has widened in recent years, and 2021 shows the biggest gap yet.