The Australian tech startup ecosystem is a vibrant space of innovation, but how equitable is it? The recently released 2024 Australian Startup Funding Report offers compelling insights. While there’s progress to celebrate, the data also shows persistent challenges in gender equity.
One positive takeaway is the increased participation of female and mixed-gender founding teams in early-stage deals.
A commendable 27% of total deals involved these teams, with strong representation at the Pre-Seed and Seed stages. This suggests a growing recognition of the talent and potential within diverse founding teams in the nascent phases of startup development. In fact, 42% of Angel & Pre-Seed deals and 29% of Seed rounds included women founders, marking improvements from 2023.
However, the picture isn’t entirely rosy.
Despite the increased involvement in deals, the share of overall capital secured by women-led startups fell 3%, at 15% in 2024 from 18% the previous year. This indicates a persistent funding gap, where all-male founding teams continue to dominate capital acquisition. In news that is of no surprise, male teams secured a whopping 85% of capital raised in the first half of 2024, while teams with at least one woman founder only managed 10%.
The report also underscores a significant lack of large deals for all-women teams.
Since 2019, they’ve only secured three deals exceeding $50 million, representing a mere 2.2% of such transactions in Australia. This reinforces the narrative that women-led ventures often struggle to access the significant capital needed for scaling and sustained growth. To challenge this requires systemic change – some of which was explored in our recent podcast interview with Nicole Cook of SBE Advisory.
While most active Australian investors backed at least one female or mixed-gender team in 2024, only 13% of the top 50 VCs made more than half their investments in women-led startups. This signals a need for more intentional and consistent support for female founders from the leading investment firms. While there is investor interest, there needs to be active action and investment in those teams – and investing in female led businesses to be seen as smart business sense, rather than a box to tick.
The report shows a divided reality. Encouraging gains in early-stage involvement are overshadowed by a persistent funding gap and difficulties in accessing later-stage capital.
What’s the solution?
Fostering genuine gender equity requires systemic and multifaceted efforts. This means actively addressing unconscious bias within investment decision-making processes, cultivating mentorship and networking opportunities for female founders, and promoting greater transparency and accountability within the funding ecosystem. In all, we have made small progress and further progression needs to happen.
Listen Now
To hear more on the real risks Australia face by not backing more female entrepreneurs, check out Flip the Focus with Host, Jen Dobbie and guest, Nicole Cook, Chief Executive and Advisory Board Chair and alumni of several billion dollar startups.
Listen to the full episode on Flip the Focus