In a banner year for venture capital funding in Philadelphia, startups founded by women have made great strides.
What is happening: Women-only startups in Philly accounted for 23 deals in 2021, valued at more than $127 million, according to the Philadelphia Alliance for Capital and Technologies (PACT), which gave Axios an exclusive first look at its latest venture capital annual report.
- In 2020, $35 million was invested in startups led solely by women, up from $2 million a decade ago.
Yes, but: That’s still just a fraction of the city’s record 411 financing deals last year, valued at nearly $8 billion.
- Despite talk of more equity nationwide, progress in funding women-founded businesses has plateaued in the United States in recent years, reports Lucinda Shen of Axios.
By the numbers: Aro Biotherapeutics — a Philadelphia-based biotech company co-founded by Susan Dillon and Karyn O’Neil — accounts for a massive chunk of last year’s total for all-female teams after scoring a round of more than $90 million.
- Meanwhile, startups with at least one female co-founder totaled 57 deals valued at $426.3 million last year.
- In 2020, startups with at least one female co-founder closed 56 deals valued at $214.5 million, according to PACT.
The big picture: Philadelphia’s record year for venture capital funding erased its previous record of $2.6 billion in 2019.
- Businesses that stand out include businesses related to food delivery GoPuffwhich contributed half of the nearly $8 billion figure, and Misfit Market.
- But the biotech and enterprise technology industries remain the biggest sectors to attract venture capital funds.
To note : The report does not share any data on startups owned by people of color as this has never been tracked, but PACT acknowledges that this group is underrepresented.
- Black entrepreneurs received 1% and women entrepreneurs received 2% of the $137 billion in venture capital invested in US startups in the first half of last year, according to Database Crunch.
What to watch: It was common for Philadelphia startups to move to bigger cities before they left, but that’s starting to change. Startups seem to stay put as outside investors come to them, usually from Silicon Valley, New York and Boston.
- The pandemic has prompted traditional venture capital centers to pay more attention to external markets, and venture capital portfolios are diversifying geographically with the rise of remote working.
- Experts predict this will benefit smaller hubs like Philadelphia, which has a lower cost of living than larger markets.
What they say : Dean Miller, CEO of PACT, said he expects overall growth to persist.
- “We have the advantage of diversity in different types of industries, and that’s only going to continue,” he said.
Sylvester Mobley, Managing Partner of Ordinary View Capitalsaid this period of growth in Philadelphia should be an opportunity to prioritize marginalized entrepreneurs.
- “Philadelphia is an underrated city that has the potential to push equitable growth in technology and innovation early on,” Mobley said.