2017 Review of Funding for Female Founders
Written By Claire Burke
Edited by Kate Dwyer
In November, Stitch Fix (led by Katrina Lake) went public, making it the first female-led company to complete an IPO since Sheila Marcelo and her company Care.com went public in January 2014.
Stitch Fix’s successful IPO followed a number of milestones: the company reached $1 billion in revenue in less than six years, achieved profitability, and recruited top talent from Netflix, Walmart, and Nike throughout its lifecycle as a startup. Pre-IPO, the company raised $43 million in venture capital, which demonstrates not only the strength of Lake’s vision, but investors’ belief in her ability to execute that vision and sustain profitable growth over time. As of this report’s publication, Stitch Fix’s market cap is nearly $2 billion.
The Stitch Fix IPO is just one of 2017’s notable accomplishments of female-led companies. In addition to an overall increase in the size of Series A rounds, we’re witnessing large raises by female-led companies in all stages of the startup lifecycle: Moda Operandi ($165m, Series G), FIGS ($65m, Series B) and The RealReal ($50m, Series F) are examples of this. While the funding gap remains an ever-present reality, female entrepreneurs made significant strides in closing it last year.
In 2017, NYC-based companies led by female CEOs represented 13% of total Series A deals. Most notably, the average size of women-led rounds in New York increased by 55% from $6.2 million in 2016 to $9.6 million in 2017, as founders continue to raise larger rounds to extend their runway between seed and Series A raises.
This past year, investor appetite expanded beyond traditional tech as female entrepreneurs continued to innovate and embrace the value of physical spaces — whether in the health and wellness, coworking, or retail sectors. (The Wing is an example of this.) Driven in part by the desire and need to support each other in our current socio-political climate, women are building experiences for other women beyond the digital realm.
Note that the data below contains information on financings reported on Crunchbase, Mattermark, and CB Insights. (If we are missing any deals, please let us know.)
Key takeaways are bulleted below:
Series A Rounds in 2017
Our 2017 analysis began with an overall review of Series A rounds globally, nationally and regionally.
Series A Rounds Raised Globally, Nationally and Regionally in 2017
Globally: 1,433
United States: 746
Bay Area: 177
NYC: 104
Los Angeles: 45
Boston: 42
Seattle: 24
Chicago: 21
San Diego: 18
Denver: 11
The total number of Series A rounds in the U.S. increased by 13% in 2017, but the number of female-led companies raising Series A rounds declined by 7%. That said, each individual deal closed by a female founder/CEO was on average larger than in 2016.
Of the regions that we track in the United States, Denver, San Diego, Boston and Los Angeles saw the largest increases in female-led deals, at 120%, 64%, 36% and 18%, respectively.
Notable Series A Deals in Los Angeles
(i) HopSkipDrive, led by CEO Joanna McFarland, which raised a $7.4 million Series A2 round in November 2017 from Student Transportation Inc.;
(ii) BeautyCon, led by CEO Moj Mahdara, which raised $9 million in March 2017 from A+E Networks and Main Street Advisors;
(iii) Ritual, led by CEO Katerina Markov Schneider, which raised $10.5 million in August 2017 from Founders Fund; and
(iv) Stem Disintermedia, led by CEO Milana Rabkin, which raised $8 million in June 2017, led by Aspect Ventures and Evolution Media.
In addition, FIGS, led by CEO Trina Spear, raised $65 million from Tulco in December 2017, the fourth-largest raise by a female-led company of any stage in 2017. As we saw in 2016, Los Angeles remains among the most female entrepreneur-friendly cities in the U.S.
In New York, the largest A with a female founder-CEO was Ellevest, which raised $34.6 million in September 2017 led by Rethink Impact. The next two largest A rounds were Maven Clinic (a Female Founders Fund portfolio company), which raised $10.8 million from Spring Mountain Capital in July, and Frank, which raised $10 million from Reach Capital and Ground Up Ventures in December.
In terms of sectors, there were four NYC deals in SaaS (Maven Clinic, Sawyer, BentoBox, Pymetrics); three in fintech (Ellevest, Frank, FinMkt); three in food & beverage companies (Daily Harvest, Milk Bar, Minibar); and one each in coworking (The Wing), beauty (Wander Beauty), and biotech (Tara Biosystems).
Meanwhile, in the Bay Area, 18 female-led companies received A funding in 2017, representing 10% of total Series A rounds. These numbers were consistent with 2016’s deals, showing there was no growth in female-led deals.
The largest A round led by a female founder-CEO in San Francisco was Nuna, which raised $90 million led by Kleiner Perkins in January 2017. This marks an increase from 2016, when Cortexyme raised $15 million in January 2016.
Overall, New York remains more female-founder friendly than the Bay Area, as the percentage of female-led companies raising Series A is still greater in NYC than in SF. In the Female Founders Fund portfolio alone, four NYC companies (BentoBox, Maven, Minibar, Sawyer), and one LA-based company (Reaction Commerce) raised their Series A last year, and one NYC company, Thrive Global, raised their Series B in 2017.
Series B Trends in 2017
In 2017, there were five total Series B rounds led by female founders or CEOs in New York, many of whom had raised Series A funding in 2016 and on which we reported last year.
Daily Harvest raised both an A and B round in 2017.
In 2016, the average size of Series B rounds raised by female CEOs in NYC was $15.8 million; in 2017, that number increased to $24.1 million.
In the Bay Area, there were 10 total Series B rounds led by female founders or CEOs, the largest of which, Brandless, raised $50 million from NEA. As stated at the outset of this report, round sizes have continued to increase in each stage of the venture capital value chain.
Key Takeaways
Raising a Series A led by an institutional VC remains difficult, but female founders in NYC raised, on average, the most capital per company in 2017 compared to female founders in the Bay Area.
Even though there were fewer female-led Series A rounds last year (compared to 2016), the round sizes were larger. New York-based founders witnessed a 62% increase in the average dollar amount raised in Series A rounds in 2017.
“In 2017, Maven raised a $14 million Series A round,” CEO Kate Ryder says. “As the founder of a technology company focused on improving the women’s health experience, I’ve been excited to see the increase in VC interest in building businesses that speak to the female market.”
Appendix of Funding
2017 Series A Rounds — NYC — Female CEO
Ellevest — $34.6 million — September — Sallie Krawcheck
Maven Clinic — $10.8 million — July — Katherine Ryder
Frank — $10.0 million — December — Charlie Javice
Tara Biosystems — $9.0 million — October — Misti Ushio
Pymetrics — $8.0 million — September — Frida Polli
The Wing — $8.0 million — April — Audrey Gelman
Sawyer — $6.0 million — August — Marissa Evans Alden
FinMkt — $5.0 million — November — Luan Cox
Minibar — $5.0 million — August — Lindsey Andrews, Lara Crystal
BentoBox — $4.8 million — July — Krystle Mobayeni
Wander Beauty — $4.5 million — May — Divya Gugnani
Milk Bar — November — Christina Tosi
Daily Harvest — June — Rachel Drori
2017 Series A Rounds — Bay Area — Female CEO
Nuna — January — $90.0 million — Jini Kim
Node — July — $16.3 million — Falon Fatemi
Vineti — June — $13.8 million — Amy DuRoss
Genome Medical — May — $12.0 million — Lisa Alderson
Alight — June — $11.0 million — Michele McGovern
Paradata — March — $10.0 million — Debbra Rogers
Workboard — December — $9.3 million — Deidre Paknad
Qool Therapeutics — November — $8.0 million — Beverly Huss
Dote — July — $7.2 million — Lauren Farleigh
Clara Labs — July — $7.0 million — Maran Nelson
Long Game — November — $6.5 million — Lindsay Holden
Replika — November — $6.5 million — Eugenia Kuyda
Solv — April — $6.3 million — Heather Mirjahangir Fernandez
Zum — August — $5.5 million — Ritu Narayan
Qordoba — May — $5.0 million — May Habib
Kuli Kuli — January — $4.3 million — Lisa Curtis
Jooko — March — Ilit Raz
Hooked — May — Prerna Gupta