2020 Review of Funding for Female Founders

COVID-19 Pullbacks Balanced By Upward Trends in Digital Health, Female-Led Social Networks

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As Women’s History Month concludes, Female Founders Fund is back with its annual review of the state of female entrepreneurship and funding in the United States.

Back when we first published this report in 2014, female entrepreneurs received just 2% of total venture capital dollars invested into early stage companies. Since then, this proportion has hovered at or just below 3%, but we have seen steady growth in the number of female-founded startups raising follow-on and later-stage rounds of capital.

Female Founders Fund launched in 2014 with a simple investment thesis: women will build the companies of tomorrow and we will back them. With this Annual Report, we aim to track the numbers, beginning with the first institutional round of capital — often the hardest for founders to secure. In addition, by shining a light on the early Series A/B rounds, we are able to identify shifts in capital allocation trends as these companies scale.

2020 showed both positive and negative results in business-building for women. Below, we’ve outlined fundraising metrics on the number, size, location, industry, and exit outcomes for female-led companies. We also discuss COVID-19’s effect on female entrepreneurship and weakness in overall fundraising, which was countered by bright spots in segments such as digital health and social networks led by female founders.

If we’ve missed any deals, please email [email protected] and let us know.

Key Stats on Female Founders in 2020

In 2020, 2,641 venture capital-funded deals for female-founded startups closed for a total of $22.6 billion, according to Pitchbook, compared with $22.2 billion invested across 2,785 deals in 2019.

Notably, the proportion of entirely female-founded companies increased from 6.2% to 6.5%, and in 2020, for the first time, startups led by Black and Latinx women crossed the $3 billion threshold in total funds raised, up from $1 billion in 2018. According to Project Diane, the proportion of Black women founders receiving funding also increased from 40% to 57%, and Latinx women founders from 64% to 70% between 2018 and 2020.

At the same time, all-female founding teams raised just 2.1% of total VC dollars, down from a peak of 2.6% in 2017 and 2.5% in 2019, and the subset of these dollars raised by Black and Latinx women founders was 0.64%. To put this in perspective, out of $156.2 billion that US investors deployed into private markets in 2020, female founders received just $22.6 billion.

Given COVID-19 dynamics (discussed further below), 2020 also represented a deceleration in the growth rate of total capital invested in female-founded startups, with 5-year CAGR dropping to 15%, the first time it has fallen below 20% since 2013.

Source: Pitchbook, Female Founders Fund research

Across all 2020 venture deals, teams with both male and female co-founders raised 12.3% of capital deployed, hovering around the median across the last five years.

During this same period, female-founded companies delivered more than twice the return per dollar invested as their male-owned counterparts.

In fact, according to Pitchbook, women-founded companies have outperformed the broader markets in terms of exit speed for the past ten years, with median time to exit for female-founded companies 11% lower than for US VC-backed companies overall (6.7 vs. 7.5 years).

Source: Pitchbook US VC Female Founders Dashboard

Importantly, female-founded companies have achieved these exits on far less capital raised. In 2020, the average amount of private funding raised by women-led companies that IPO’d was $71M, as compared to $300M for the IPO market overall. Furthermore, exits by female-founded companies increased 16% year over year while male-founded exits declined by 2%, and the value of female-founded startups that were sold or taken public in the first nine months of 2020 was up 30%, compared to 2019.

Since 2017, notable female-led unicorn IPOs have included:

• 2017: Katrina Lake’s Stitch Fix ($1.6B at IPO, $8.7B today)
• 2018: Julia Hartz’s Eventbrite ($2.8B at IPO, $2B today)
• 2019: Julie Wainwright’s The RealReal ($2.4B at IPO, $2B today)

Of 442 IPOs in 2020, four (Annovis Bio, Ayala Pharmaceuticals, Athira Pharma, and Amesite) were female-led — a high water mark in number, but not valuation, with all four debuting at market caps of under $1 billion.

Source: NASDAQ

That said, of the 20 female-led companies that currently trade publicly on major exchanges, seven are valued at over $5 billion, including Whitney Wolfe Herd’s dating app, Bumble, which debuted on the Nasdaq in February 2021 and trades, as of this writing, at a market cap of $7.6 billion.

2020 also saw heightened M&A activity for female founded start-ups. Beauty brand Charlotte Tilbury had a majority stake acquired by Puig in a deal valuing the company at $1 billion; fitness tech startup Mirror sold to Lululemon Athletica for $500 million just three years after its founding; and direct-to-consumer women’s shaving company Billie was in talks for purchase by Procter & Gamble, though the acquisition offer was ultimately blocked by the FTC.

Female-Led Series A Rounds in 2020

At Female Founders Fund, our strategy is to be the first institutional seed capital into top female-led startups; thus, we continue to closely track Series A follow-on rounds, particularly in our core geography, New York City.

By region, New York City and the Bay Area remained the top two destinations for fundraising, both overall and for female-led companies.

New York continued to be the most female founder friendly, with women-led companies representing 21% of total Series A fundraises, or 36 out of 170 deals.

In the Bay Area, this percentage was slightly lower, with female-led companies representing 17% of Series A fundraises, or 59 out of 345 deals. These numbers have more than doubled over the past five years; in 2016, New York saw just 14 women-led Series A fundraises, and the Bay Area saw 18.

Total Number of Series A Rounds Raised Nationally in 2020

Source: Crunchbase

COVID-19’s Impact on Female Entrepreneurship

While female founders have made significant strides in the last five years, 2020’s black swan event had a disproportionate impact on female entrepreneurs and women-led businesses.

Apart from spending significantly more time on responsibilities such as eldercare and childcare (contributing to the 3 million+ women that have dropped out of the workforce since the start of COVID-19), women experienced more negative outcomes for their businesses than male counterparts.

According to a survey conducted by the Female Founders Alliance and US Chamber of Commerce, prior to the pandemic’s start, 67% of male-owned small businesses ranked overall commercial health as “good” compared to 60% of women-owned SMBs. However, by July 2020, the proportion rating business health as “good” dropped to 62% for male-owned businesses and 47% for female-owned businesses.

The 15% disparity may be attributable to male-owned businesses being more likely to increase staffing, buoyed by increased investment into the business, rather than decrease it as with women-owned businesses, which overwhelmingly reported flat or decreased investment plans.

Furthermore, six months into the pandemic, 51% of women founders surveyed reported having delayed or scrapped plans to start companies, compared with 87% pre-pandemic that were “somewhat or highly likely to start a company.” For example, in FFF’s June survey of female founders, the CEO of a prominent DTC brand said, “We totally shifted from a ‘growth-at-all-costs’ strategy to modest growth with a clear path to profitability.”

Despite these circumstances, female-founded companies continued to push forward, with 174 Series A, 102 Series B, 35 Series C, and 20 Series D deals closing for companies with at least one female co-founder in 2020.

The Rise of Female-Founded Digital Health Platforms

Digital health is one area where female entrepreneurs have outperformed and continued to punch above their weight in 2020. Startups focused on digital health, fitness, and wellness received 10% of total Series A funding in the category, while representing just 7% (24 out of 310) companies in the industry at this stage.

Leading the charge, Maven Clinic, an end-to-end platform for women’s health and family planning, raised a $45 million Series C led by Icon, Sequoia, and Oak HC/FT, one of the largest ever rounds for a female-led healthcare company.

According to founder Kate Ryder, “As the pandemic continues to disproportionately impact women, resulting in millions of women leaving the workforce and 1 in 4 considering downshifting their careers, helping companies support their female employees is more important than ever.”

On the changing digital healthcare landscape, Ryder says, “The explosion of digital health over the past year has been a bright spot in such a dark year, and I’m hopeful that much of what we’ve learned about how technology can modernize certain care pathways is here to stay. Post-COVID, patients will demand even greater personalization, efficacy, and value, and technology has proven to be a powerful tool for accomplishing that. Companies and health plans that seamlessly provide these features will be best positioned to succeed.”

Across female-led digital health startups, notable seed fundraises included Oula (an FFF company), which raised $3.2M led by the Collaborative Fund with FFF, 8VC, Kapor Capital, and others to build co-founder Adrianne Nickerson’s vision of a modern, holistic prenatal and postpartum experience. According to Oula founders Adrianne Nickerson and Elaine Purcell, “Oula made a very deliberate decision to build a hybrid model that integrates in-person and virtual maternity care.” While recognizing that this model does not work for all healthcare startups, they intentionally chose to connect patients with clinicians physically, “to support human connection and trust, while supporting convenience and seamlessly integrating into patients’ already busy lives.”

Startups addressing queer health needs like Folx also saw increased traction, evidenced by the company’s seed and Series A rounds raised just three months apart ($4.4M seed in December 2020 led by Define Ventures; $25M Series A in February 2021 led by Bessemer).

Despite the fact that women in the U.S. make 80% of health care decisions for themselves and their families, much effort remains to address the gender bias in medical care today.

Oula, Folx and others are part of the 9% (and growing) of female-founded health tech businesses working to establish care systems based on actual research performed with female (especially POC) and nonbinary subjects.

Within the sector, notable Series A fundraises included:

• Tia Health, an all-in-one women’s care platform, which raised $24M led by noted healthcare investor Emily Melton at Threshold Ventures, with participation from Define Ventures, Homebrew, and John Doerr at Kleiner Perkins;
• Brightline, a virtual platform for adolescent cognitive behavioral health, which raised $20M led by Oak HC/FT and Threshold Ventures;
• Real, a group therapy app, which raised a $6M led by Forerunner Ventures with participation from Goop founder Gwyneth Paltrow;
• And Calibrate, a digital weight loss app, which raised $22.5M from Threshold Ventures.

And additional later stage fundraises/exits included:

• Cityblock Health, a tech-enabled community-based healthcare platform for marginalized and BIPOC communities, which raised a $160M Series C led by General Catalyst;
• Modern Health, a healthcare platform geared toward enterprises, which raised three rounds of funding in just 24 months, most recently closing a $74M Series D led by Founders Fund in February 2021;
• Everlywell, an at-home testing company, which raised a $175M Series D led by a host of investors, including Blackrock, The Chernin Group, and Foresite Capital;
• And Anne Wojcicki’s 23andme, which raised a $82M Series F and intends to go public via SPAC merger in 2021.

The success of women-founded digital health companies has been rejuvenated by COVID’s acceleration of the need for virtual care and consolidation of patient-provider relationships. As care models continue to decouple from traditional health systems, platforms like Maven, Tia, Modern Health, 23andme, and more are positioned to cultivate deeper, more holistic relationships between individuals and traditional healthcare systems.

The Power of Social Networks Led By Women

2020 also saw the proliferation of social platforms and networks created for and by women. Houseparty, a one-to-many platform for face-to-face interaction, saw its user base grow by 50 million in the first months of the pandemic, and Peanut (an FFF company) launched to provide space for women to share insights around IVF, adoption, pregnancy, and more. Peanut raised a $12M Series A in May 2020 led by EQT Ventures, with participation from Index and Female Founders Fund.

Given COVID-19’s disproportionate impact on female workforce participation, demand also compounded for solutions that help working mothers sustain professional communities. One example is The Mom Project, a digital talent marketplace focused on streamlining mothers’ return to the workplace, which raised a $25M Series B in July 2020 from 7GC and Initialized Capital.

Lastly, following in the footsteps of Bumble, female-led social networking and dating platforms sprang forward, focused on creating space for women to interact in safe, inclusive environments.

Lex raised a $1.5M seed round in July 2020 led by Female Founders Fund to build a first-of-its-kind text dating app for the queer community; Twitter announced its acquisition of screen-sharing app Squad, which saw tremendous growth during the pandemic; and Quilt continued this momentum into 2021 with a $3.5M seed round led by Mayfield Fund to build an inclusive social audio app for all identities.

Final Takeaways

2020 was a year of tumult for female entrepreneurs, but not one without optimism.

• Despite the effects of a global pandemic, female entrepreneurs still managed to set records in 2020.
• Exits surged to a record high of four IPOs by female-founded and led companies, with momentum continuing into 2021 with Bumble’s IPO and 23andme’s impending SPAC debut.
• Female entrepreneurs doubled down on trends toward digitization of healthcare and personal/professional development and raised record dollar amounts in early-stage and follow-on funding.

As we move into 2021, we are starting to see signs that the burdens placed upon female founders in 2020 have begun to correct. We expect female-led strength in healthcare and social platforms to continue, accompanied by a boom in women-founded remote learning products and platforms to support aging communities as pandemic recovery begins.

Finally, as our last six years of reporting have shown, early-stage funding is made truly meaningful by the presence of follow-on funding and ultimately, exits. Thus, the increase in female representation in SPAC ownership (see: ABLE Brands, Powered Brands, Athena Technologies, and Perella Weinberg’s SPAC led by Betsy Cohen) as optimistic signs that women will play an ever increasing role in the exits of their peers in 2021 and beyond.

Big thanks to FFF’s MBA intern, Megan Ruan, for her hard work on this year’s report!

Appendix

2020 Series A Rounds — NYC — Female Co-Founder(s) or CEO

• ByHeart — Mia Funt — 4/15/2020 — $70
• Radish — Yun Cho — 8/4/2020 — $63.2
• Metagenomi — Jillian Banfield — 11/12/2020 — $38.6
• Actym — Laura Hix Glickman — 4/27/2020 — $34
• Novome Biotechnologies — Liz Shepherd — 1/7/2020 — $33
• Tia — Carolyn Witte, Felicity Yost — 5/28/2020 — $24.3
• C16 Biosciences — Shara Ticku — 3/2/2020 — $20
• Chili Piper — Alina Vandenberghe — 8/18/2020 — $18
• Eximis Surgical — Kristin Johnson — 2/28/2020 — $17
• Bond Vet — Zay Satchu — 11/12/2020 — $17
• Redpin Therapeutics — Elma Hawkins — 3/25/2020 — $15.5
• Lili — Lilac Bar David — 10/22/2020 — $15
• Funnel — Caren Maio — 11/12/2020 — $14.1
• CUUP — Abby Morgan — 2/4/2020 — $11
• TARA Biosystems — Gordana Vunjak-Novakovic, Kacey Ronaldson, Milica Radisic — 6/23/2020 — $10
• MikMak — Rachel Tipograph — 8/3/2020 — $10
• Laika — Eva Pittas — 9/23/2020 — $10
• ADAY — Meg He, Nina Faulhaber — 1/29/2020 — $8.5
• Tilt Five — Jeri Ellsworth — 10/28/2020 — $7.5
• Serial Box — Molly Barton — 1/29/2020 — $6.8
• PathSpot — Christine Schindler — 5/21/2020 — $6.5
• MeetElise — Minna Song — 7/21/2020 — $6.5
• Andie — Leah Schwartz, Melanie Travis — 12/16/2020 — $6.5
• The Financial Gym — Shannon McLay — 1/28/2020 — $6
• Kinnos — Katherine Jin — 3/5/2020 — $6
• REDD Intelligence — Valeria Morozovsky Girimonte — 8/6/2020 — $5.8
• Stringr — Lindsay Stewart — 5/28/2020 — $5.8
• Wellthy — Lindsay Jurist-Rosner — 5/18/2020 — $5.6
• CreativeX — Anastasia Leng — 11/16/2020 — $2.5
• NexTravel — Wen-Wen Lam — 1/28/2020 — $2.4
• Move This World — Sara LaHayne — 3/5/2020 — $0.5

2020 Series A Rounds — Bay Area — Female Co-Founder(s) or CEO

• Ventus Therapeutics — Hao Wu, Judy Lieberman — 5/6/2020 — $60
• Brightseed — Sofia Elizondo — 9/15/2020 — $27
• Swarm Technologies — Sara Spangelo — 1/25/2020 — $25
• Streamlit — Amanda Kelly — 6/16/2020 — $21
• Deep Isolation — Elizabeth Muller — 1/7/2020 — $20
• Dishcraft Robotics — Linda Pouliot — 5/29/2020 — $20
• Brightline — Naomi Allen — 8/19/2020 — $20
• VERSATILE — Meirav Oren — 12/3/2020 — $20
• Deepcell — Maddison Mahdokht Masaeli — 12/7/2020 — $20
• Ermetic — Sivan Krigsman — 7/29/2020 — $17.25
• strongDM — Elizabeth Zalman — 10/27/2020 — $17
• Shyft — Daniela Alpert — 1/21/2020 — $15
• Wyze Labs — Elana Fishman — 7/29/2020 — $15
• Shop Ware — Carolyn Coquillette — 12/2/2020 — $15
• Prime Roots — Kimberlie Le — 7/6/2020 — $14.04
• AllStripes — Nancy Yu — 4/16/2020 — $14
• OpenPhone — Daryna Kulya — 11/17/2020 — $14
• OrthoFX — Nichole Garcia — 7/22/2020 — $13
• Unit21 — Trisha Kothari — 10/19/2020 — $13
• Lily AI — Purva Gupta, Sowmiya Chocka Narayanan — 1/9/2020 — $12.5
• Kikoff — Cynthia Chen — 7/1/2020 — $12.5
• Ellevest — Sallie Krawcheck — 11/12/2020 — $12.3
• SparkMeter — Allison Archambault — 8/25/2020 — $12
• Run The World — Xiaoyin Qu, Xuan Jiang — 5/21/2020 — $10.8
• Juni Learning — Ruby Lee, Vivian Shen — 8/26/2020 — $10.5
• Observable — Melody Meckfessel — 11/20/2020 — $10.5
• SkySelect — Erkki Brakmann — 1/10/2020 — $10
• Lightning Labs — Elizabeth Stark — 2/5/2020 — $10
• LeadIQ — Mei Siauw — 5/15/2020 — $10
• Sail Internet — Dana Tom, Sharon Wan — 11/11/2020 — $10
• Silo — Chia-ying Jackie Lee — 9/24/2020 — $9
• Elevate Security — Masha Sedova — 9/29/2020 — $8.3
• Hummingbird — JoAnn Barefoot — 7/16/2020 — $8.2
• Slingshot Aerospace — Melanie Stricklan — 10/29/2020 — $8
• Agora — Maria Rioumine — 10/30/2020 — $7.2
• boostr — Katie Schuele — 7/27/2020 — $7
• BSPK — Zornitza Stefanova — 10/5/2020 — $7
• Lunewave — Sherry Byon — 11/23/2020 — $7
• Mobilize — Sharon Savariego — 4/13/2020 — $6.8
• Aegle Therapeutics — Shelley Hartman — 9/29/2020 — $6.5
• Priori — Basha Rubin, Mirra Levitt — 10/28/2020 — $6.3
• Ride Health — Sumun Khetpal — 1/7/2020 — $6.2
• Brandzooka — Kelly Dotseth — 10/14/2020 — $5.6
• Motherly — Elizabeth Tenety, Jill Koziol — 4/9/2020 — $5.4
• Valence Community — Emily Slade — 8/11/2020 — $5.3
• Imprint Energy — Christine Ho — 1/14/2020 — $5.2
• Rizzle — Lakshminath Dondeti — 1/18/2020 — $5
• Clarity Movement — Hannah Laura Hagen — 3/17/2020 — $5
• HelloRelish — Lesley Eccles — 4/27/2020 — $5
• Slintel — Ranjana TN — 10/20/2020 — $4.2
• Bioz — Dr. Karin Lachmi — 5/24/2020 — $4
• Box Media Holdings, Ltd — Clare Stewart Munn, Elisabetta Zucchi, Michelle Czarnik — 4/6/2020 — $2
• Scaeva Technologies — Wendy Curd — 10/12/2020 — $0.5