Navigating the 2023 Funding Landscape: Female Founders in the DACH Startup Ecosystem

Key Findings:

• In 2023, the total funding volume in the DACH region declined by 36.1% to 9.5 billion EUR across 1,605 deals.
• Public funding was crucial, with every 7th funding round being a grant.
• Early-stage investments dominated, with 31% seed funding and 13.6% pre-seed.
• Vienna, Berlin, and Zurich are central hubs for startup activity.
• In Austria, 57% of funding rounds were closed by Vienna-based startups, with per capita funding in Vienna at 219.43 EUR.
• Gender disparities were stark, with only 1.5% of capital going to all-female teams and 6.5% to mixed teams.
• In 2023, women accounted for 17% of startup founders in Austria, yet only 9% of founders in startups receiving funding were women. 
• On a per capita basis, most funding is going to the Swiss startup ecosystem, followed by Austria. Germany leads in the region in terms of total volume funding.
• Investors shifted to focusing on fewer but higher-quality investments due to market conditions.
• Strong focus on digital technologies and sustainability, with the Software & Analytics sector receiving 27.7% of total funding.

5 June, 2024 Vienna – Female Founders is an organization committed to promoting diversity within the European technology and innovation landscape. In collaboration with the Vienna Business Agency, we are pleased to present this report, which offers insights into female entrepreneurship in the DACH region for the year 2023. The Vienna Business Agency plays a crucial role in fostering a startup ecosystem that is more inclusive and equitable. This report is driven by the necessity to address and highlight the specific challenges and opportunities that women face in securing funding and growing their businesses in the DACH region. In this reportwe highlight the specific challenges and opportunities women face in securing funding and growing their businesses in Austria, Germany, and Switzerland. The insights aim to inform stakeholders about the needs of female entrepreneurs, guiding tailored and impactful interventions.

Economic Climate and Its Influence on Startups

In 2023, the DACH region, like the broader European market, faced significant challenges due to global economic downturns. About 9.5 billion EUR, across 1,605 recorded deals, were invested into the DACH startup ecosystem, a sharp decline of 36.1% in total funding volume and a decrease of almost 20% in funding rounds compared to the previous year. Despite this downturn, the long-term growth trajectory of the region’s startup ecosystem remains promising.

Willingness to Invest: Despite Decline in Funding Volume Austria Sees Rise in Funding Rounds

Not every DACH country was impacted the same by the economic downturn. Across the region, Germany was the hardest hit in terms of total investment volume, which plummeted by 39%. However, the decrease in the number of financing rounds was relatively modest, at 15%. Austria presented a contrasting scenario. Despite a similar reduction in investment volume of 38%, the number of funding rounds actually rose by 22%. This points to a reduction in average deal sizes but a growing willingness to invest across a broader number of startups. Most of the total funding volume was concentrated in the German ecosystem, but Switzerland led the region on a per capita basis. Austria, which saw an increase in funding rounds, ranked second.

Early-Stage Investments Dominate

The year was marked by a dominance of early-stage investments, with 31% of funding rounds categorized as seed funding and 13.6% as pre-seed. This trend underscores a strong pipeline of new startups and reflects investor confidence in early-stage companies.

Public Funding Emerges as Crucial Buffer 

Public funding emerged as a crucial buffer against economic adversities, with every 7th funding round being a grant. This level of grant funding indicates substantial support from public or non-profit entities, which is especially crucial for early-stage ventures focusing on research and development or those in sectors with longer paths to commercialization.

Vienna Showcased Among Key Startup Hubs

Vienna, Berlin, and Zurich emerged as central hubs for startup activity. In Austria, nearly 57% of funding rounds were closed by Vienna-based startups, with per capita funding in Vienna at 219.43 EUR. However, startups with at least one female (co-)founder received only 18.50 EUR per capita, almost 11 times less than male-only teams.

Gender Disparities and Sector Investment Focus

Gender disparities were stark across the DACH region, with only 1.5% of capital going to all-female teams and 6.5% to mixed teams. In Austria, women accounted for 17.4% of startup founders, yet only 9% of those receiving funding were women. The highest representation of women in founding teams was in Professional Services at 30%, followed by E-commerce at 14.6%, and AgTech at 12.5%. However, the majority of investments were concentrated on digital technologies and sustainability, with the Software & Analytics sector receiving 27.7% of total funding. The health sector followed with 16.8% of total investment, and 11.2% of funding went into the energy sector.

“While 2023 was a challenging year for fundraising in the DACH region and beyond, the underlying strengths of the ecosystem – such as a vibrant early-stage funding environment and supportive public funding mechanisms – provide a foundation for recovery and growth. Entrepreneurs need trusted partners and reliable touchpoints from both the private and public sectors to succeed. By fostering these connections, we can continue to drive progress and create a more inclusive and dynamic startup environment.” – Nina Wöss & Lisa-Marie Fassl, Co-Founders of Female Founders & Managing Partners of Fund F

“Changing the status quo and ensuring equal representation for women in business is an endeavour that requires consistent, thoughtful, collaborative work. It is exactly because of this that we are proud to have teamed up with Female Founders in bringing this report to life, and why the Vienna Business Agency has worked alongside the City of Vienna for decades to provide ever more support for female entrepreneurs and women-led startups – through consultations, training and funding. The current report findings reaffirm our commitment, and embolden us to strengthen our efforts in building a more inclusive startup ecosystem.”
–  Gerhard Hirczi, Managing Director of the Vienna Business Agency