Contribution of the Female-led Startups to the Funding Pool incresed in 2022 : Study

By: WE Staff | Saturday, 25 February 2023

A recent poll indicated that because women-led entrepreneurship is becoming more popular in India, businesses with female founders were able to account for a larger part of the overall funding in value terms last year compared to 2021.

According to a new study by market intelligence platform Tracxn, women-led enterprises represented over 11% of the total funds raised in 2022 compared to 8% in 2021, even if the value of their investment remained around the same at $3.9 billion during both years.

According to the data platform, the overall funding values declined by over 34% year over year last year to $35.6 billion due to a shortage of late-stage financing.

It's interesting to note that five of the 11 unicorns (startups valued at $1 billion or more) with female leadership joined the club in 2022. Amagi, 5ire, Lead School, Open, and LivSpace are a few of them.

The study found that, despite the fact that early-stage investment was falling less sharply last year, women-led enterprises defied the trend and received capital that nearly doubled from $550.5 million in 2021 to $1.1 billion in 2022.

In India, early-stage companies raised 13.4% more money than they did in the previous round, or 7.8%, thanks to the support of women-led businesses.

Early-stage companies raised roughly $8.2 billion in equity rounds in 2022 compared to $7.1 billion the year before, according to Tracxn statistics.

The femtech sector, which comprises startups that provide digital solutions for women's and baby health, raised 38% more money overall as a result of this surge in funding for women-led businesses. The industry raised over $98.4 million in 2022, up from $71.2 million in 2021, indicating a rise in investor interest in initiatives that prioritise the health of women and children.

The research also mentions a 91% rise in industry investment during the five-year period from 2017 to 2022.

Investor preference for companies led by women is expanding, which contributes to this growth in investment.

In order to lower the cost of internet access, it was reported in December that Google plans to concentrate its 75,000 crore India Digitization Fund investments on funding women-led early-stage businesses.

According to a report from VCCircle in October, Enzia, an all-female startup capital fund, is reportedly close to raising Rs 200 crore for its Rs 300 crore fund and may wrap up the fundraise in early 2023.

Along with a rise in corporate interest in these businesses, the government has stepped up initiatives to support female entrepreneurs. Karnataka's government and Google struck a contract in November to support the state's emerging businesses.

As per the contract, Google will work with the Karnataka Innovation and Technology Society (KITS) to provide companies run by women access to partners and training in the cloud, user experience (UX), Android, Web, product strategy, leadership, and marketing in the state's Tier 2 and Tier 3 cities.