CLOSING THE GAP

As we enter the last month of the year there are some signs that female entrepreneurs in the tech space are making meaningful progress. Though women are still far underrepresented in the tech start-up field, there’s good reason to believe that small but meaningful steps of progress could have a snowball effect, and help drive more growth for women in the tech ecosystem. 

After 2020 marked a dramatic decline in funding for female VCs, 2021 has shown a major turnaround. In the first three quarters of 2021 female-founded companies raised $40.4 billion, that’s up from $23.7 billion for ALL of 2019. Plus, for late-stage start-ups, median valuations increased about 70% from $70 million to $120 million. (This is all according to PitchBook’s Female Founders in the US VC Ecosystem report.)

There’s also evidence that the outperformance of female-founded companies will drive further investment. The PitchBook report finds that female-founded companies are outperforming the market, and female-founded firms are selling or going public faster, yielding quicker returns to investors. Those stronger returns could prompt other investors to follow — and invest more in female-led companies. 

Nothing shows the potential for female founders more than the fact that this year has turned three of them into billionaires. Fortune’s December/January cover story features Spanx founder Sara Blakely, Bumble CEO Whitney Wolfe Herd and 23andMe CEO Anne Wojcicki. In November, Blakely closed a deal to sell her company to Blackstone for $1.2 billion. When Bumble went public in February, Wolfe Herd's stake in her dating app that puts women in control, was worth $1.5 billion. (With the dip in Bumble share prices, Forbes recently said Wolfe Herd is not currently a billionaire, but she’s close.) And in June, 23andMe went public via a SPAC at a $3.5 billion valuation.  

What’s key here is that these three women have innovated in vastly different fields—consumer products, genomics and online dating. Not only do they offer role models for a next generation of founders, I would argue that they also create valuable new patterns for the male VCs who control the vast majority of investment dollars, by offering a counterpoint to the stereotype of young founders as typically male and white. Fortune makes the very strong argument that all the women who work at these companies have the potential to seed the next generation of female-founded start-ups as well.

Now there’s potential that success breeds success, and the funding trend continues into 2022.

What progress would you like to see for women founders in 2022? Share your thoughts with us at askmakeit@cnbc.com. 

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