On paper, 2025 looked like a breakthrough year for female founders in Australian startups.
Teams with at least one female founder captured 24% of all equity capital, up sharply from 15% in 2024. That is the strongest result since 2019 and the kind of headline that generates optimistic press coverage.
Then you read the fine print.
Deal participation for female-founded teams actually fell from 28% to 24%. Fewer companies with female founders received funding in 2025 than in 2024, even as the total dollars going to those who did increased significantly.
All-female founding teams dropped to just 2% of total capital, down from 4% the previous year. This figure has been virtually unchanged for years and shows no structural improvement.
The gains were concentrated at the very top of the distribution. The top five female-founded companies took 79% of all the capital that went to women-led teams. The remaining 87 companies with female founders split just $257 million between them.
Women's Agenda summarised the situation directly: lack of progress for women startup founders masked by headline improvement.
The data reveals a persistent pattern that the report has tracked across multiple years. Female and mixed-gender founding teams are well represented at pre-seed and seed stages, then drop sharply at Series A and beyond.
This is the leaky pipeline problem. Women are starting companies and raising initial capital at reasonable rates. But they are not progressing through later funding stages at anywhere near the same rate as male-founded teams. Median deal sizes for all-female teams remain smaller at every stage, making it harder to hit the milestones required to raise the next round.
The drop-off at later stages is not explained by company quality or market performance. Research consistently shows that diverse founding teams generate stronger risk-adjusted returns. The pipeline leaks because of structural factors in the investment ecosystem, including network effects, pattern matching in investor decision-making, and the relative scarcity of female partners at venture capital firms making investment decisions at Series A and beyond.
The founder sentiment data in the report adds important context.
Only 18% of female founders said they feel supported by investors. 27% said they feel supported by the wider ecosystem. Female founders were significantly more likely than male founders to say that gender affected their ability to raise capital.
These are not abstract complaints. They reflect the lived experience of founders who face longer fundraising timelines, more sceptical investor conversations, and fewer warm introductions to the people writing cheques at later stages.
Victoria led the states on gender diversity in funding, with 37% of its capital going to teams with at least one woman founder, compared to the national average of 24%.
However, even Victoria's result comes with familiar caveats. The share of capital going to all-women founding teams in Victoria fell sharply to just 1% in 2025, down from 17% in 2024 and the lowest level in more than five years. The gains were driven by mixed-gender teams on large rounds, not by broad-based improvement across the ecosystem.
SmartCompany noted that the Victorian data reveals a familiar tension beneath the headline gains, with lower deal participation for female-founded teams year-on-year, particularly at pre-seed and seed stages.
This is not just a gender equity issue. It is a capital efficiency problem for the entire startup ecosystem.
Deloitte Access Economics data shows that women-founded companies are 40% more likely to access international markets, raise four times as much capital overall, and grow revenue nearly four times faster when backed. Lacey Filipich, founder of Money School and quoted in the report, put it directly: the most gender-diverse teams are 39% more likely to financially outperform.
An ecosystem that systematically underfunds its highest-performing cohort is leaving money on the table. Every investor who pattern-matches away from a female-founded company is making a statistically suboptimal decision, and the aggregate effect of those decisions compounds across the entire market.
The report data points to several structural interventions that would make a difference.
Three to five new or scaled Series A funds with explicit diversity mandates would address the most critical gap in the pipeline. The drop-off at Series A is where the leaky pipeline does its most damage, and targeted capital at that stage would have outsized impact.
NSW needs to match or beat Victoria's 37% through targeted follow-on programs that support female-founded companies progressing from seed to Series A. The early-stage pipeline in NSW is strong enough to support this. The follow-on infrastructure is what is missing.
Better transparency through initiatives like Equity Clear's diversity data standard would make it harder for the ecosystem to hide behind headline improvements while underlying participation declines.
The 24% capital number is worth celebrating as a floor, not as a ceiling. The underlying participation data tells a more cautious story: fewer companies with female founders got funded, the gains were concentrated in a handful of large rounds, and all-female teams remain almost invisible at 2% of capital.
Broad-based participation, not concentrated headline gains, is what will move the needle for the whole ecosystem. Every piece of evidence available says that backing more diverse teams produces better financial outcomes. The question is whether the ecosystem will act on that evidence or continue to settle for headlines that mask the real picture.
State of Australian Startup Funding 2025 (Cut Through Venture and Folklore Ventures) - australianstartupfunding.com
Women's Agenda, "Lack of progress for women startup founders masked by headline improvement" (February 2026) - womensagenda.com.au
SmartCompany, "Victoria takes venture capital crown from NSW in $2.2 billion funding surge" (23 February 2026) - smartcompany.com.au (for Victoria 37% statistic)
Overnight Success, "Nine interesting things from the 2025 State of Startup Funding Report" (5 February 2026) - overnightsuccess.com.au
Forbes Australia, "Australia's startup funding jumps to $5.1 billion in 2025 as AI takes the lead" (3 February 2026) - forbes.com.au
Teams with at least one female founder captured 24% of all equity capital in 2025, up from 15% in 2024. However, the top five female-founded companies took 79% of all the capital that went to women-led teams. The remaining 87 companies split $257 million.
Deal participation for female-founded teams fell to 24% in 2025, down from 28% in 2024. This means fewer companies with female founders received funding, even as the total dollars increased due to a small number of large rounds.
All-female founding teams captured just 2% of total capital in 2025, down from 4% the previous year. This figure has been virtually unchanged for years and shows no structural improvement despite gains for mixed-gender teams.
Victoria led with 37% of its capital going to teams with at least one woman founder, compared to the national average of 24%. However, all-women founding teams in Victoria received just 1% of capital, down from 17% in 2024.
Research from Deloitte Access Economics shows that women-founded companies are 40% more likely to access international markets, raise four times as much capital overall, and grow revenue nearly four times faster when backed. Gender-diverse teams are 39% more likely to financially outperform their peers.
Female founder deal participation fell from 28% to 24% despite capital share increasing. The gains were concentrated in a small number of large rounds involving mixed-gender teams, while the broader pipeline of female-founded companies raising capital at all stages contracted. The leaky pipeline from seed to Series A remains the primary structural barrier.
The leaky pipeline refers to the pattern where female and mixed-gender founding teams are well represented at pre-seed and seed stages but drop sharply at Series A and beyond. Median deal sizes for all-female teams remain smaller at every stage, making it harder to hit milestones required for follow-on funding. Structural factors including network effects and pattern matching in investor decisions contribute to the drop-off.
Only 18% of female founders surveyed in the 2025 report said they feel supported by investors. 27% said they feel supported by the wider ecosystem. Female founders were significantly more likely than male founders to report that gender affected their ability to raise capital.
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