A total of $703 million flowed into startups across 66 deals in the first quarter of 2024, Cut Through Venture data shows, with all-female founding teams hitting an all-time high in funding share.
Startup funding in Q1 marginally outpaced this same period last year, but lagged significantly on the lively end to 2023, the data found.
Two companies, Bugcrowd and Deputy, hit unicorn status (achieved a valuation of $1 billion or more), becoming the first new additions since 2022 after receiving capital this year.
Cybersecurity company Bugcrowd took the crown for the largest funding round in Q1, 2024, at $156 million, followed by biotech company Aravax ($66 million), Gilmour Space ($55 million), Constantinople ($50 million) and Deputy ($37 million).
In terms of sectors, cybersecurity received the largest share of funding, despite just two deals in the space, led by Bugcrowd’s capital raise. Climate-tech and health-tech companies continued their run of delivering a high number of small deals. Fintech also remained one of the most highly-funded sectors.
But the big highlight was the finding that funding for female-only founder teams reached its highest-ever percentage. Across the first quarter, 21% of funding flowed to female-only founder teams, while 30% flowed to start-ups with at least one female founder. That compares to just 5% of funding flowing to all-female teams in 2023, 3% throughout 2022 and 2% across 2021.
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The largest deals for female founders were across Aravax, Constantinople, Prota Therapeutics ($32 million), Ultra Violette ($15 million) and Kismet ($13 million).
However, median deal sizes for teams with female and mixed genders were significantly lower compared to those of all-male teams. Female founders were more actively involved in smaller rounds, particularly those $1 million or less, the data found.
According to Cut Through, Q1 deal processes usually begin late the previous year, meaning that we won’t know whether transactions have truly picked up until Q2 data is revealed.
In late 2023, 92% of surveyed founders said they were planning to raise capital in 2024 or 2025 – and 86% were confident they’d be successful. About two-thirds of investors expected startup funding deal flow to increase in 2024.
Investor sentiment this year is a little more cautious.
“The Cut Through Quarterly Investor Sentiment Survey depicted a nuanced view,” Cut Through said in a blog post. “On one hand, the overall perception of portfolio and market health has improved, but on the other, there’s been a noticeable rise in layoffs and company closures. Clearly, the period did not show an uptick in transactions, pointing towards cautious optimism among investors.”
How did startup funding fare in 2023?
Overall startup funding in 2023 was similar to COVID levels, topping just $3.5 billion compared to $7.4 billion in 2022, with just 413 deals reported. While it’s largely in line with the global downtrend in funding, Australia’s fallout (54% decline year-on-year) was larger than the reduction in funding witnessed globally (38%). But 2023 was still Australia’s third-highest funding year on record, the organisation’s previous report found.
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