Cut Through’s Q1 2024 report includes a women-led raise from 2023

The latest report from Cut Through Ventures reveals funding for all-women founding teams hit an all-time high in the first quarter of 2024. However, it also highlighted a $10 million raise by UV protection brand Solbari, which was first announced in December 2023.

“The share of funding directed to all-female founding teams hit an all-time high in Q1,” the report read.

“Significant funding rounds for companies like Aravax, Prota Therapeutics, Ultra Violette and Solbari — all of which have ties to healthcare — played a key role in achieving this positive outcome.”

However, the $10 million raise by the women-led Solbari was reported by this publication on December 22, 2023, after it was announced by the Australian Business Growth Fund (ABGF). The Australian also had the story the previous day.

According to Cut Through, it keeps its reporting consistent by measuring funding by when it is first reported in the media or by direct submission.

“There is often a delay between when funding events occur and when they are announced publicly, lodged with ASIC [Australian Securities and Investments Commission] or submitted to Cut Through Venture directly,” Cut Through Ventures CEO Chris Gillings told SmartCompany on Wednesday.

“Accordingly, for consistency, Cut Through Venture includes deals within the period that they are first reported.”

In this case, Cut Through confirmed the Solbari raise was counted from when it appeared in Startup Daily on January 3, 2024, thus folding it into the Q1 2024 numbers.

However, as previously stated, the raise was publicly announced in December 2023 and published by multiple publications.

Cut Through has stated that discounting Solbari’s $10 million from Q1 2024 “doesn’t make an impact” on the record-high numbers it reported, as the Solbari raise wasn’t included in the data to calculate overall deal participation.

This was due to the stage of the funding round not being disclosed publicly or to Cut Through.

Some all-time highs for women-led startup funding

According to the same report, deals for all-women founding teams sat at 25% for pre-seed rounds across Q1. This dipped to 14% for seed rounds but saw an uptick to 20% for Series A and Series B+.

The numbers were lower for mixed-founding teams, with 13% for pre-seed, 9% for seed and 10% for Series A. Regardless, their numbers were also all-time highs.

The difference in Series A is particularly noticeable compared to Q1 2023, where there was no deal participation for all-women founding teams and only 7% for mixed-gendered founding teams.

These record-breaking numbers for women-led startups were from companies with ties to the healthcare sector, including Aravax, Prota Therapeutics and Ultra Violette.

But…

As usual, it wasn’t all good news for funding for women founders in Australia.

As the graphs in the report reveal, there was no deal participation for mixed founding teams in Series B+ rounds in the quarter.

The median deal sizes for both women and mixed founding teams were also notably lower than for all-male founding teams. The data also once again found women founders were generally more active in smaller rounds with investments of $1 million or less.

Looking back at Q1 2023, there hasn’t been improvement across the board.

The best news was for pre-seed investment, which saw 13% of deals go to mixed-gendered founding teams in Q1 2024. In Q1 2023, there was no deal participation whatsoever. We have also seen all-women founding teams stand strong at the same 25% figure as last year.

However, there was a noticeable decline in mixed-gendered deal participation for seed rounds compared to Q1 2023.

There was also a struggle when it came to deal participation in later-stage rounds. While 20% of the deals went to all-women founding teams (compared to zero this time last year), there was a complete dropoff of mixed founding teams. Last year, that figure was at 30%.

So overall, there was a lower percentage of Series B+ deals closed that involved women founders in some capacity.

The question is whether we are likely to see these numbers improve throughout the rest of the year. So far, the median deal size by gender is looking okay at $2 million for women-led teams, and $800,000 for mixed teams.

While this pales in contrast to the $5.5 million for all-male founders, it’s still an improvement on the overall 2023 median, which was only $700,000 for all-women founding teams.

However, as Cut Through notes, we’ve seen a significant funding cool-off this quarter compared to the last-minute gold rush of Q4 2023.  In fact, Aussie deal announcements have hit a five-year low.

But perhaps we’ll be surprised. The slew of late investments in December 2023 weren’t expected, and there’s still over eight months for more cash to come rolling in — hopefully towards women and people and colour.