The Next Wave of Female-Led Unicorns

Female Founders Fund
Female Founders Fund
8 min readAug 14, 2019

By Anu Duggal, Founding Partner at Female Founders Fund

Illustration by Alana Peters/The We Company

For many in Silicon Valley, 2019 has been the year of the long-awaited IPO. Uber, Lyft, Zoom, Pinterest, and Slack, amongst others, finally went public this year to much fanfare and mixed results. Around the same time those companies went public, several venture capital backed businesses achieved unicorn status, or valuations at $1 billion or more.

While unicorn status was previously seen as an elusory milestone (hence the name) it’s now fairly common for companies scaling quickly. However, given that female founders receive less than 2% of venture capital dollars overall, it’s difficult for their companies to achieve these high valuations. But in certain industries, particularly those where the buying power is dominated by other women, female-led businesses are seeing rapid, even exponential, growth. For example, Pat McGrath Labs, the eponymous beauty company led by the celebrity makeup artist, reached unicorn status in 2018, as did Huda Beauty and Canva, the graphic design platform.

For us at Female Founders Fund, the first half of 2019 has been historic for the number of women-led businesses achieving unicorn status. There were more female founded businesses crossing the $1 billion valuation threshold in the first half of 2019 than ever before. We believe these businesses set a much-needed precedent for the many other female-led companies who aspire to be the next generation of unicorns.

In February, The New York Times published an article outlining the “The Next Wave of Unicorns,” highlighting the differences between the first wave of unicorns — think Airbnb and Uber — and the next wave of unicorns, like Blend and Earnin.

Since the article published in February, we have seen four more female-led startups attain unicorn status (with majority of these being NYC-based):

  1. Glossier, which announced a $1.2bn valuation (March 2019)
  2. Rent the Runway, which announced a $1.0bn valuation (March 2019)
  3. Away, which announced a $1.4bn valuation (May 2019)
  4. TheRealReal, which went public with a $2.3bn valuation as of July 2019

“For those investors still living in the dark ages, perhaps the billion-dollar announcements from Glossier and [Rent the Runway]… are another wake-up call about the potential of women-led and women-focused businesses,” tweeted Jason Del Rey, senior editor of commerce at technology news website Recode, following the Rent the Runway announcement.

Building on the NYT’s observations, we’ve compiled a list of the next generation of female-led unicorns: companies we believe will soon be valued at $1 billion or more, all with women at the helm.

Redefining Retail

Away cofounders Jen Rubio (left) and Steph Korey

The travel company Away, one of the newly-minted unicorns of 2019, has built a cult-like following by redefining the traditional retail experience. From exclusively focusing on owned distribution channels, to building communities that bridge digital interaction with in-person contact, to leveraging customer feedback for new product development, Away has proven that D2C brands are creating a new playbook for retail success.

There are several other soon-to-be unicorns in the direct-to-consumer retail space. In late 2018, intimates company ThirdLove, led by CEO Heidi Zak, was purported to be valued at $750mn, with annual sales topping $160mn. ThirdLove has leveraged over 600mn data points to produce the “perfect-fitting” and “most comfortable” bra, and asks customers to submit (optional) data on their bra preferences before purchasing.

In 2017, Billie launched the first direct-to-consumer subscription razor business marketed exclusively to women. Fourteen months after launching, Billie raised a $25mn Series A, with lead investor Goldman Sachs commenting, “Billie has undergone rapid growth by creating a product and brand that has strongly resonated with women across the country.”

There’s Gwyneth Paltrow’s wellness empire Goop, which is valued at $250mn and stocks an in-house brand plus items from partner companies. The plus-size clothing brand Dia & Co. has raised over $90mn and leverages data through a styling quiz, similar to ThirdLove.

Disrupting Beauty

The Winky Lux pop-up store in Soho, NYC

The $250 billion beauty industry has not historically received much attention from venture capital until recently. Beauty is an industry where brands can scale quickly with high margins and high repeat rates and venture capitalists have started to take notice. In 2017, Sequoia invested in Charlotte Tilbury, a UK-based beauty brand based in the UK started by a celebrity make-up artist. A year later, Pat McGrath Labs and Huda Beauty, both prestige makeup brands, and Glossier, a leading skincare, bodycare, makeup, and fragrance brand, became unicorns.

A notable newcomer to the space is Winky Lux, led by CEO Natalie Mackey who raised a $6mn Series A in mid-2018, and pioneered the use of fast-fashion manufacturing practices in the beauty sector. Because social media engagement has played a pivotal role in shifting the dynamics of retail in the beauty space, companies like Winky Lux and Glossier have also developed socially engaging brick-and-mortar retail spaces where shoppers can experience brands IRL.

Drunk Elephant, a high-end skincare brand, founded by Tiffany Masterson in 2012 and backed by VMG, is another contender to join the unicorn club with a rumored $1B bid by Unilever earlier this summer. The success of new brands like Glossier, Drunk Elephant and WinkyLux proves that developing genuine relationships with the consumer directly and leveraging feedback from the community for product innovation is how female founders are building the beauty brands of tomorrow.

New Platforms of E-Commerce

Sixty percent of millennial purchases happen online, primarily via mobile. As a result, millennial tastes drive new trends in this sector. For example, market leaders in e-commerce — including two of this year’s female-led unicorns, The RealReal and Rent the Runway — were early to identify millennials’ behavior patterns. Taking another approach, Stitch Fix (also public, also a unicorn) proved that millennial women value experiences tailor-made for them.

Three female-led ecommerce platforms that are changing the scope of their industries are Zola, Minted, and Mirror. Zola, led by CEO Shan-Lyn Ma, modernized the wedding registry startup by re-inventing a category long overlooked by venture capitalists. Zola raised $100mn in 2018, valuing the company at $600m and has quickly become the fastest growing wedding website in the country.

Minted, led by CEO Mariam Naficy and valued at $700mn, democratizes product design and leverages data to determine product attributes that best translate into sales. Mirror, led by Brynn Putnam, sells $1500 full-length mirrors that serve as interactive home gyms with an affiliated mobile app. Valued at $300mn as of June 2019, Mirror’s success is driven by millennials’ moving away from traditional gym membership and embracing brands offering tech-enabled health and fitness experiences installed within the home. It raised both Series A and B in 2018, scaling extremely fast.

Healthcare Mavens

23&Me Co-Founder Anne Wojcicki

Healthcare innovation, coverage, and access has historically been driven by the needs of men, despite women outspending men over 5x on healthcare in their lifetimes. The introduction of technology to the healthcare industry has proven a powerful tool for the previously underserved, especially women. Several female-led healthcare companies are driving change in the industry, bringing improvements in level of care and time efficiency, and significant decreases in costs. Healthcare unicorn 23andMe, valued at $2.5B and led by CEO Anne Wojcicki, uses technology to share personal health and genetic data with researchers via its at-home DNA kits. It has informed 10mn consumers about their genetic make-up, with 5mn users in 2018 alone.

Speaking of women’s health, Maven Clinic, founded in 2016 by Kate Ryder, was the first telehealth startup providing healthcare services to women via its mobile app. Since its founding, Maven has raised $42mn in venture capital, most recently from Sequoia and Oak Health VC. Maven has served over 200K patients, and counts more than 1,300 health specialists in its network and over 300K monthly active users who access free medical advice on its online forums.

EverlyWell, led by CEO Julia Cheek, is on a mission to provide access to affordable, fast, and easy lab testing with 35 different types of at-home health tests. In April 2019, EverlyWell raised $50mn from Goodwater Capital to expand its footprint in drug stores and improve its already well-received digital distribution model.

Mobile

Ninety-five percent of Americans have a mobile phone, and nearly 5 billion people have a mobile phone globally. Female founders are capitalizing on this shift in global mobile phone utilization, setting their sights on transforming industries from fintech to social media both in the U.S. and internationally. Bumble, a social networking app founded in 2014 by Whitney Wolfe Herd, has 50 million registered users worldwide and earned close to $200mn in revenue in 2018. By rewriting the rules of dating, Bumble’s success is proof that the younger demographic is open to new social norms.

Another global mobile leader led by a female founders is Tala, led by CEO Shivani Siroya. Tala provides micro-loans to women in countries with limited to non-existent financing options, including Tanzania, Kenya, and the Philippines. In its fifth year, Tala has distributed more than $500mn in loans to the form of over 9mn loans worldwide and raised $65mn in funding from PayPal and Revolution Growth in 2018.

YouCam, run by CEO Alice Chang, has created a proprietary technology allowing users to experiment with different makeup looks and selfie-editing tools. YouCam apps have been downloaded more than 700M times to date with 60M monthly active users.

Looking to the Future

Taking a step back, it’s clear that we have reached a tipping point in 2019. The companies above represent the beginning of tomorrow’s reality: a more diverse representation of founders building the next generation of technology companies.

According to Shan-Lyn Ma, CEO & co-founder of Zola, “Through the success of these companies, we’re starting to see the massive return on investing in female talent, both for investors who spotted the opportunity early, as well as stakeholders benefiting from a much more gender diverse entrepreneurial ecosystem.”

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Published in Female Founders Fund

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Written by Female Founders Fund

An early-stage fund investing in the exponential power of exceptional female talent.

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