In 2022, start-ups with at least one woman founder or co-founder raised £3.6bn representing a 24% increase from £2.9bn in 2021, according to Dealroom data for the UK’s Department for Science, Innovation and Technology (DSIT). While deal volumes and values are still low compared to male led start-ups, the data demonstrates that the UK tech sector is making some progress in gender diversity.
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The majority of investments into women-led businesses, in 2022, were seed investments with 158 start-ups raising early-stage funding, which, indicates a strengthening pipeline of women-led next-generation businesses.
While the data also revealed that eight companies with women founders raised over $100m each there is still much progress to be made. Only 13 of the UK’s 144 tech unicorns – companies with at least $1bn valuation – have at least one woman founder, representing just 9% of the total unicorns created in the UK. High-profile women-led UK tech unicorns include Matches Fashion, Interactive Investor and Lastminute.com
Yvonne Bajela, a partner at UK venture capital firm LocalGlobe, has backed female-founded businesses including Supercritical, a company helping businesses to reach net zero and Cable which is tackling financial crime. “Incredible progress has been made so far and it’s important that we continue to champion and support women founders at all stages of their journey,” says Bajela.
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By GlobalDataBut scaling up a business in the UK remains a challenge. In addition, women have access to a shrinking pie as global VC funding dropped significantly across the board in 2022. According to GlobalData, the value of global VC dropped by 36% in 2022. In 2021, the value of global VC deals was $512.7bn compared with $293.8bn in 2020.
Women founders have been particularly strong in fintech start-ups and impact businesses - startups focused on using technology to solve the UN’s Sustainable Development Goals. Kate Hofman, co-founder and chief brand officer at GrowUp Farms says the progress made so far in supporting women entrepreneurs and founders is great to see but there is more to do to make it a level playing field. “We need more diversity in business leadership if we’re going to make UK food and farming resilient and self-sustaining. We need to better support our women entrepreneurs who are building impact businesses to solve pressing challenges facing society, from the environment to the economy and people.”
Measures to address the issue of gender diversity in business founders by policy makers in the UK have included industry-led group, the Tech Talent Charter launched in 2016. And 2022, the government launched The Digital Skills Council, as part of its Digital Strategy bringing together industry leaders from companies including Starling, Google, Future Dot Now, Microsoft to improve diversity in the talent pipeline.
Also in 2022, the Government Equality Hub launched an industry-led taskforce to increase the number of women-led high-growth businesses, with a particular focus on regions outside of London to include its focus on levelling up. Chaired by Anne Boden, CEO and founder of Starling Bank, the taskforce is working with women entrepreneurs and investors to help deliver the government’s target of increasing the number of female entrepreneurs by half by 2030.
