Number of Female-Founded Unicorns Reaches High Water Mark in 2019

January 8, 2020

By Cary Zimmerman

2019 in Review: Uptick in Unicorns

female unicornsGreat news! In an exciting follow-up to my previous article on this topic, final 2019 data is showing that it was a historic year for female-founded unicorns. Crunchbase reports that an all-time high of 21 female-founded startups raised equity rounds at post-money valuations of $1 billion last year—with the $1 billion valuation being the critical hallmark of a “unicorn.” This number is up from 15 female-founded unicorns in 2018 – a 40% increase year over year – and 8 female-founded unicorns in 2017, an 88% increase year over year.

This is encouraging news for female entrepreneurs and, importantly, their investors. But while it is cause for some celebration (glass ceiling, be damned!), there’s still ample room for gains to be made. This is because the 2019 vintage of female-founded unicorns represents only 15% of the 142 startups reaching the billion-dollar mark last year (78 of those were in the U.S., for what it’s worth), and women-led companies still receive about 3% of venture funding nationally. In a nutshell, there’s a substantial gap in funding going to female-founded startups. Without adequate capitalization, these companies will continue to struggle to succeed.

Closing the Funding Gap: More Women Must Invest

One cause of the funding gap is the underrepresentation of women in investing positions. However, the tide is turning on that, with 69.2% of the top-performing funds now having female GPs in control of the use of capital within venture firms. In addition, more women are launching venture funds with the specific objective of investing in women-led businesses. To date, these developments have yielded only modest increases in funding to female entrepreneurs, but the impressive growth in the number of female-founded unicorns demonstrates very clearly that by funding women-owned businesses, tremendous value can and will result. Further, data shows that female-founded companies reach exit more quickly. So why isn’t more money going to female-founded startups? The economic argument is there.

What to Expect in 2020: Trending Up?

With more women making investment decisions in 2020, we will almost certainly see an increase in funding to female-founded companies, since women are twice as likely to invest in female founders. Hopefully, that increase will not merely be incremental. Whether we’ll also see an increase in the total number of female-founded unicorns remains to be seen, but the trends seem to suggest this is possible, if not likely. Ultimately, investors—whether GPs or angel investors funding companies, or LPs investing in funds—have the power to direct more money to women business owners. If it’s a priority for investors, more female-led companies will receive funding. And even for investors that don’t prioritize “gender lens” investing, the data demonstrates that women-led startups offer exceptional potential for value creation and compelling returns.

If you have questions about launching a startup, investing in start-ups or capitalizing your business, contact Cary at 216.736.7275 or caz@kjk.com, or reach out to any of KJK’s Corporate or Securities professionals.


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