Australian startups could break records in 2022 – but most female founders still feel gender impacts their ability to raise venture capital

  • Total equity investment in Australian startups surpassed $10 billion in 2021, a new report says.
  • The first State of Australian Startup Funding paper found investors and founders are excited for 2022.
  • However, women in the scene have voiced far less optimism than their male counterparts.
  • Visit Business Insider Australia’s homepage for more stories.

Nine out of 10 Australian investors expect startup funding activities to increase in 2022, according to a major new report, but female founders still feel far less likely than men to reap the benefits of a booming sector.

In its inaugural State of Australian Startup Funding report, issued Tuesday, Cut Through Venture and Folklore Venture state total equity investment in startups tripled in 2021 to north of $10 billion.

Last year saw Australian firms secure eight funding rounds worth more than $250 million, more than every prior year combined.

At the tail end of the year, eight startups, including headline-grabbers Canva and Airwallex, maintained ‘unicorn’ status with valuations over $1 billion.

Smaller players benefited, too. The data shows the size of each round category, from pre-seed funding to late Series C raises, grew through 2021.

The average value of seed rounds, benefiting startups in their earliest phases, more than doubled over the year, reaching almost $4 million.

Those record breaking figures have fostered serious optimism in 2022.

“More than half of investors expect to pick up their investing pace in 2022, and angels have more ways to invest than ever,” said Cut Through Venture editor Chris Gillings.

A full 61% of surveyed investors expect investment activities to pick up “significantly”, and 29% foresee a marginal increase. Some 7% said investment will remain at the same level, and just 3% predicted a marginal or significant downturn.

As Australia lurches towards climate action, investors circled ‘cleantech’ as their most-hyped sector for 2022. Fintech, AI and big data, enterprise projects followed, with Web3, blockchain, and cryptocurrency startups rounding out the top five.

That fawning assessment of the local startup scene spread to founders, too.

“Eighty-eight per cent of founders are confident they’ll successfully raise their next round,” Gillings added.

However the optimism was not evenly divided between men and women, whose expectations of the new year varied wildly.

While six in 10 male founders feel “highly confident” about securing their next raise in 2022, just one in 10 women who helm a startup feel the same.

Just 16% of founders are women, the report said, meaning that not only are women underrepresented among founders, they are also considerably less likely to report high levels of confidence than their male counterparts.

A full 82% of women said they believed their gender impacted their ability to raise venture capital funding.

Away from the heroics of founders like Canva CEO Melanie Perkins and Airwallex president Lucy Liu, the report suggests investors could be overlooking the talent behind Australia’s next unicorn.

“As an ecosystem, we need to continue to do better to make sure that rockstar founders who are solving our most pressing challenges, no matter their gender or identity, get the funding and support they need,” said Sarah Nolet, general partner at Tenacious Ventures.