Fundings in women-led  startups outperform men

Amid the funding winter in the start-up sector there’s cheer for women entrepreneurs, a new study indicates a surge in confidence with which they have managed to outperform the Indian startup ecosystem as a whole.

Startups led by women entrepreneurs in India’s tech industry has grown by 8 per cent among the funded companies with their share growing by over 18 per cent according to a study conducted by market intelligence platform Tracxn.

Funding trends:

The share of funding into women-led startups, as a percentage of overall total funding, has risen to 16 per cent in 2022 from 11 per cent in 2021, noted the report. The number of active investors funding in women-led startups has seen a steady increase since 2010, with a sharp year-on-year jump of 42 per cent in 2021.

Bengaluru topped the list with 1404 fundraising rounds, followed by Delhi NCR with 1271 rounds and Mumbai with 960 rounds.

Among the cities in India, women-led startups in Bengaluru have raised the highest funding of $11.3 billion, followed by Delhi NCR at $5.7 billion and Mumbai at $3.5 billion.

While, Delhi NCR topped the list with a number of 2126 companies led by women followed by Bengaluru with 1711 companies, and Mumbai with 1438 companies.

In 2021, funding in women-led startups rose by a whooping 91% to $4.9 billion, which was the highest in a decade. Despite the 2022 funding winter that plunged funding by 12 per cent women-led startups have outperformed the Indian startup ecosystem.

Out of over two thousand women-led startups in India that have received funding, 36 per cent have progressed to the Series A stage, and 24 per cent have gone on to the Series D stage or beyond.

Overall funding values declined nearly 49 per cent year-on-year due to weakness in late-stage funding, according to the data platform, however, women-led startups saw a 26 per cent year-on-year drop in it.

Even in the early stage funding rounds, women-led startups have been able to perform significantly better than the overall Indian startup ecosystem in 2022.

The startups led by women saw a 76 per cent year-on-year increase in early stage funding in 2022 as compared to a 9 per cent increase in early stage funding in the startup ecosystem.

Sequoia Capital, Accel & Venture Catalysts are the overall top investors in the space to date, while Venture Catalysts, CIIE & 9Unicorns are the top accelerators and incubators investing in women led startups.

 Unicorn trend in women-led startups

The report noted that almost 60 per cent of all unicorn startups had women at the helm were added in 2021 and 2022.

5ire, Mama Earth, ACKO, Mobikwik, and Amagi are some of the unicorn companies founded or co-founded by female entrepreneurs.

Acquisition trends in women-led startups:

In 2021 and 2022, women-led startups accounted for more than 50 per cent of the total acquisitions in the last five years. However, there has been a drop in the average acquisition price in 2022, due to the ongoing funding winter. The acquisitions of Big Basket, WhiteHat Jr, Curatio Healthcare, and PaySense are some of the acquisitions seen in the past two years.

In 2021, five startups led by women went public, while in 2022 there was just one woman-led company that had an IPO, showed the report.