Gender Analysis of the 2022 Funding Report

Last year, we reported on how funding rounds were split between the genders of founders for the first time. In our last report for 2022, we continued the trend with a promise of more detailed analysis through the gender lens.

This year, we’re adding an additional report focusing on the topic. As we just started tracking these data recently, we’re sadly not able to provide timeseries data or trends (yet). Please reach out with any thoughts, comments, concerns, ideas to us at northstack@northstack.is

A note on methodology: Our data is based on publicly announced, or public knowledge, funding rounds (for example, a funding round not announced but mentioned in an interview). We time them based on the announcement date. The data is supposed to capture funding going into the Icelandic ecosystem, not to anlyse the Iceland-based venture capital funds. Most of the capital deployed into startups in Iceland is from abroad so limiting our reporting to Iceland-based funds would provide a very skewed image. We know and understand that this approach to gender and diversity is limited – we’re only analysing based on two genders and not taking any other diversity attributes into consideration due to time and resource constraints.

The key takeaways are the following:

• Most of the capital flows to male-only teams. This is due to most of the capital being deployed into later stage or growth focused companies, which currently are mostly or only led by men (in Iceland).

• We do not see a meaningful difference in splits between genders if we slice the data based on the geographical source of the funding; i.e. the picture looks the same (or very similar) whether you look only at Iceland located investors or include foreign investors as well.

• The data tells a significantly different story if we filter on only first tracked rounds. First tracked rounds are the first tracked funding rounds for a given company.

Most of the money goes to male-led companies

If we look at the funding data by gender of founder, the vast majority – around $294 million – are raised by companies with only male founders. Less than $7 million go to founding teams with only female founders.

As a percentage, this means that – in total – less that 2% of deployed capital went into female only teams last year.

The picture is a tiny bit better if we only look capital deployed by Icelandic investors (i.e. excluding all funding rounds that include foreign investors). In that, female only teams take almost 6% of total funding.

This result is not surprising. When looking at numbers of total capital deployed, few companies that raise large growth rounds – tens of millions of dollars – and are responsible for most of the capital that is deployed. Total capital deployed is therefore not a good proxy for how easy or equal it is today to raise capital, but rather an indicator of how it was.

First tracked rounds look much better for gender equality

To try and get a better understanding of what fundraising looks like today from a gender perspective, we categorized each funding event into whether it was the first tracked round. That means, the funding round that we track in our database.

When we slice the data according to that, the picture is quite different.

Female-only teams represent more than 26% of deals and capital deployed (22% of deals and 33% of capital deployed if only looking at Icelandic investors), which suggests a more equal landscape in early stage deals than it does in later stages.

Post image by Khamkéo Vilaysing.