BREAKING THROUGH

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DISRUPTING THE TECH SECTOR While tech startups are still dominated by men, women are increasingly making an impact, both in traditional “female” businesses such as fashion tech and beauty tech as well as other areas like biotech and fintech Women still make up a relatively small share of all tech startup founders in New York City and few of the city’s most successful tech firms have been started by women. However, the tech environment is rapidly changing. Today, hundreds of tech startups in the five boroughs have women at the helm. And there is evidence that women entrepreneurs are playing a more prominent role in New York’s tech sector than they are in Silicon Valley and the Boston area, the nation’s other leading tech hubs. Women entrepreneurs have helped make New York the epicenter of fashion tech, beauty tech and e- commerce via companies such as Birchbox, Rent the Runway and Gilt Groupe, but they are also increasingly going beyond traditional “female” industries. Female founders in the city develop new allergy tests (Immunovent), build messaging platforms (Snaps), provide crowdfunding analytics (Crowdnetic) and innovate on the cutting edge of bone implants (Epibone). They are building telemedicine platforms (Maven), platforms to purchase legal services (LawGo), and personal finance sites for women (The Daily Worth). One indication of the rising prominence of women in the city’s tech ecosystem is the growing number of women entrepreneurs accessing financing from angel investors and venture capital firms. For instance, between 2003 and 2009, none of the 11 companies receiving funding from New York Angels had a female founder, according to a CUF analysis. But over the past four years, 16 of the 45 companies (36 percent) receiving seed funding from New York Angels, the city’s most well-known angel investment group, had a woman founder. The last half-decade has also seen the rise of angel groups targeting women entrepreneurs and/or bringing more female investors to the table, including New York-based funds, such as Golden Seeds, BBG Ventures, 37 Angels and Female Founders Fund, which collectively have investments in 80 women-led companies, 40 percent of them in New York City. Similarly, a growing number of startups with women founders have been breaking into the city’s accelerator programs. In the first class of Techstars NYC, in the summer of 2011, just one of the 12 participating startups had a woman founder, and overall just 1 of the 32 founders of those companies was a woman. But in Techstars NYC’s Winter 2015 class, 3 of the 12 participating companies had a female founder. Likewise, 6 of the 12 companies in the summer 2015 class of the StartUp Health Accelerator had a woman founder. In its debut class in the spring of 2012, on the other hand, just 2 of the 9 participating companies were founded or cofounded by a woman. Women tech entrepreneurs are also increasingly accessing later stage venture capital, which is often a precursor to achieving successful exits through either an IPO or acquisition. Female-founded companies in New York City that raised significant amounts of Series A financing in 2015 include The Muse, DWNLD, Way Up, Nestio, Alfred and Andela. These six companies alone raised close to $60 million of additional capital last year. In January 2016, insurance navigation site Policy Genius raised $15 million in Series B funding and online jewelry retailer BaubleBar raised a $20 million Series C round of funding. Other femaleled companies in the city that raised Series B or later stages of funding during 2015 include 3D orthotics maker Sols ($11 million Series B) and ClassPass ($40 million Series B and $30 million Series C). “We’re seeing some women-founded companies get to scale in New York,” says Frank Rimalovski, executive director of the New York University Entrepreneurial Institute. “It’s not 50/50, but I expect many more, large, female-founded, female-run companies.” 24 Center for an Urban Future
While women still account for fewer tech companies overall than men, many of the tech experts we interviewed for this report—including entrepreneurs and venture capitalists—told us that women make up a larger share of tech entrepreneurs in New York than in other leading tech hubs. The data seem to corroborate this. Indeed, in the third quarter of 2015, a higher percentage of companies receiving venture capital in New York City had women founders than in Boston or San Francisco. According to a CUF analysis of the PricewaterhouseCoopers’ MoneyTree Report, 16.9 percent of New York City companies receiving venture capital in the third quarter of 2015 had a women founder, compared to 14.8 percent in Boston and 12.1 percent in San Francisco. Overall, 15 out of the 89 New York City companies receiving VC funds in the third quarter of 2015 had a woman founder, compared to 4 out of 27 in Boston and 16 out of 132 in San Francisco. Other studies have reached similar conclusions. Startup tracker TechCrunch found that New York City produced a greater number of startups with women founders than any other tech hub in the country between 2009 and 2014. During that period, 374 companies or 21 percent of all tech startups created in the city, were founded by women, compared to 15.5 percent nationally, according to TechCrunch. San Francisco ranked second with 338 companies, or 16 percent of the total startups. In terms of percentages, Brooklyn on its own beat every other tech enclave in the nation, with 33 tech startups that had at least one women founder, or 28 percent of all venture or angel backed companies launched in Brooklyn during those years. That’s nearly double the national average and well ahead of other hubs, including Boulder, Colorado, where womenfounded companies accounted for 18 percent of tech startups, San Francisco with 16 percent and Palo Alto with 12 percent. 15 Overall, according to Endeavor Insight, the number of technology companies founded by women entrepreneurs in New York City has grown tenfold since 2003, when only 10 percent of tech businesses or 42 companies had a female founder. Ten years later, in 2013, there were 457 startups with female founders amounting to 15 percent of New York City tech companies, 90 percent of them founded since 2003, and 75 percent, since 2008. 16 Companies with at least one female founder today employ more than 7,000 people in New York City, and have attracted nearly $3 billion in investment. 17 New York’s advantages are many, chiefly size, the breadth of its economic base and its dominance in industries such as fashion, media, beauty and retailing, all of which are rapidly being transformed by technology. Long time players in those industries, women are now using their experience and insider knowledge to move them into a digital future. In merging fashion and technology, for example, New York City has only one close competitor, London. Feeding off the city’s long time reputation as a fashion capital and bolstered now by technology, New York is helping to transform the 3 out of 12 companies participating in Techstars NYC Winter 2015 class 17% of the member companies in the ACRE cleantech, smart grid and sustainable, smart cities incubator Have a Female Founder fashion industry for the digital age. New York fashion tech, and its cousin, beauty tech, are changing the way businesses interact with consumers. Rent the Runway, Chloe + Isabel, BirchBox, GlamSquad and BaubleBar have collectively raised nearly $275 million dollars. All have women on their founding teams and four have women-only founders. Other companies, including Stylesage and Trendanalytics are providing software solutions to the retail industry to help the sector operate more efficiently. Women entrepreneurs are also playing a key role in emerging fields of wearable tech and 3D printing, with startups such as Sols, Ringly and Jewelbots having recently raised capital to build out their businesses. The services market is another standout sector for women-founded tech companies in New York. These companies are developing new business models for the digital age, using technology to play intermediary and connect consumers with service providers in new ways. ClassPass, for one, makes it possible for monthly subscribers to take exercise classes at multiple gyms— without having to pay membership fees. With $84 mil- Breaking Through 25
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BREAKING THROUGH

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