It’s about damn time: 13 Aussie VCs to disclose women-led funding data

Scale Investors co-chief executives Chelsea Newell and Samar Mcheileh. Source: supplied.

In an effort to foster transparency within the Australian venture capital landscape, 13 of the country’s most prominent VC funds have committed to disclosing comprehensive data regarding their investments in women-led businesses.

This comes as a response to a dire need for increased diversity in the VC sector and positive change for women-led businesses.

Despite us living in 2023, gender diversity remains a pressing concern in the startup ecosystem. The move aims to shed light on the status quo and actively promote greater opportunities for women entrepreneurs.

Thirteen funds in total have agreed to the program, which will run across this financial year. They include:

• Airtree
• Blackbird
• LaunchVic’s Alice Anderson Fund
• Artesian Female Leaders VC Fund
• Scale Investors
• Alberts
• Giant Leap
• Euphemia
• Trawalla Female-Led Ventures
• Tractor
• Friday Club
• Climate Salad
• Birchal

The data provided by the funds will be broken into three categories: all women teams, mixed teams, and all male teams.

“Transparency is a known tool for equality and we can’t improve what we can’t measure. A united industry with clear gender reporting is a great step forward for equality in venture capital in Australia”, Lisa Fedorenko, Investment Manager at Alberts said.

The funds will need to disclose the following for each group:

• The percentage of funds invested
• The percentage of deals
• The percentage of deals screened
• The percentage of deals progressed to a meeting
• The percentage of deals progressed to due diligence

“While we are starting with the venture funding space, our goal is to have these metrics reported across the startup ecosystem — particularly for early-stage accelerators, funding programs and the teams running them,” Samar Mcheileh, co-CEO at Scale Investors, said.

“We need to see change happen across the entire pipeline to ensure that women-led companies gain access to funding from larger VCs.”

Our View: A few big raises have never been enough, and the narrative needs to change

The initiative has closely followed the latest Cut Through Ventures quarterly report, which offered unsurprising statistics. It found that female founder deal participation was at a record high across all stages, except for Series A, which is at a five-year low.

It’s important to note that even the highs here are skewed thanks to a number of large deals. As Cut Through reported, $107 million of the $148 million raised by female founders in Q2 was made up of just three raises — Fleet Space, Constantinople and Lyka.

With that in mind, the data also revealed that the “actual number of funded female founders in Q2 is lower than the 2021-22 peak due to fewer deals being made. Median deal sizes for female-founded startups remain stubbornly lower than those for all-male teams”.

And this is not a new story. Honestly, it’s quite a tired one. Quarter after quarter there is a headline number that highlights an uptick in VC funds for women-led businesses. But the second you take more than a cursory glance you quickly find that it is thanks to a couple of big deals.

Let’s take a look at 2021, the ‘golden era’ where the VC funds were well and truly flowing. It also saw a ‘record high’ for deal participation from female founders.

However, this was largely thanks to some mammoth raises by Canva and Airwallex.

Comparatively, Q1 of this year (where the cash tap is more like a drip) saw an uptick in funding for women-led businesses. But that too was largely led by a couple of big raises, such as $105 million in Series B for Loam Bio.

This narrative needs to change.

While huge numbers for great businesses is wonderful, a few companies getting the lion’s share is not enough.

The ecosystem needs more deal participation for more female-led businesses — especially for women of colour and those doing great things outside of major capital cities.

Hopefully, this initiative will be more than lip service, and VCs will commit to publicly addressing their diversity shortfalls as hard as their wins.

Because what the VC space needs is to shine a blinding spotlight on where the gaping holes are so real change can be achieved.

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