Australian Women-Led Ventures Received Only 4% of Funding in 2023

According to the most recent statistics from the State of Australian Startup investment study, female-founded firms in Australia would get only 4% of the total $3.5 billion in startup investment by 2023. The analysis finds a sharp contrast, with all-male teams dominating the investment environment, securing the majority of the 413 investment agreements completed.

Surprisingly, 62% of financing transactions went to all-male founding teams, with all-female founding teams receiving only 12%. Teams with at least one female founder performed marginally better, closing 26% of the transactions.

These figures highlight a troubling trend in the Australian startup environment, where gender inclusiveness is still a major issue. The disproportionately low amount of money allocated to female-founded enterprises raises concerns about the sector's capacity to leverage different viewpoints and new ideas.

Although the 4% figure represents a minor increase over prior years, growth remains largely concentrated among a small number of businesses. Notably, five firms, including Constantinople and Secure Code Warrior, received half of the money raised by teams that included at least one female founder.

The survey also indicates a persisting gap in financing amounts, with the typical transaction size for all-male teams being $3 million against $0.7 million for all-female-founded firms.

While there has been some improvement, with more equity financing coming to teams with at least one female co-founder and an increase in deals featuring female co-founders, significant efforts are needed to close the gender gap in startup funding.

Investors' reactions to the disparity have been mixed, with several announcing plans to encourage diversity among their investment teams and work with diversity-focused accelerators. However, real steps to address the issue, such as creating diversity policies and measuring diversity indicators, are insufficient.

As the startup landscape changes, there is a rising need for greater transparency and accountability in investment methods, with efforts emerging to encourage the disclosure of financing data for female-led enterprises.

The State of Australian Startup investment study, co-published by Cut Through Venture and Folklore Ventures, also shows a sharp reduction in overall investment for startups in 2023, following larger worldwide trends. Despite the hurdles, hope remains, with artificial intelligence emerging as a potential industry for the coming year, with sustained interest in corporate software and climate technology.