Only 22% of European deep tech companies are women-led, new research from the GENDEX project and funded by the European Innovation Council (EIC) found.

GENDEX creaded an index assessing the state of play for the European deep tech scene, intended to identify gender diversity and inclusion gaps across the ecosystem and to offer actionable insights and recommendations for stakeholders to consider moving forward.

The report found that women-led companies account for other 11% of the value raised at non-IPO exits in the past decade, despite accounting for only 0.6% of total non-IPO exits completed in that time.

Further, it takes women-fronted companies on average six months longer than teams led by men to sign their first term sheet.

Companies led by men secured 1.8 times the funding women-led companies did between 2014 and 2024. Once funding is secured, the index showed that women-led companies often receive less favourable terms than teams led only by men.

One women founder interviewed as part of the index, explained: “I think men, when they see young women, especially in the mould of their daughters, who are so much younger than them… I think there’s a bias towards women being less capable or that they just see their daughters basically. A little bit of paternalism on their part.”

The research indicated that the gender imbalance is most evident in companies led by men.

Nearly a third (29%) of women foudners say they have over 50% women in technical positions, compared to just 1% of companies led only by men.

“If investors and policymakers don’t act now, Europe will continue losing billions in untapped talent. This data proves we need structural change,” Tanya Suarez, chair at GENDEX, said.

“Not only is it needed to fairly represent women, but evidence shows a gender-balanced ecosystem delivers the best results. Our inaugural index has been a huge undertaking by our team and partners, we’re today very grateful to all involved and look forward to helping companies benefit from the actionable learnings the index has generated.”

42% of STEM graduates in Europe are women, however, this level of representation isn’t maintained beyond the educational stage.

The GENDEX research shows that only 24% of patent applications in Europe included women as inventors.

Meanwhile, only about a third (31%) of the total researchers and scientists employed are women. This research is evidence of the narrowing funnel, where women talent is lost along the way, to the detriment of the tech industry as a whole.

Indeed, the research suggests that closing the gap between women and men-led companies could prove to be extremely lucrative for the industry. A more even representation of women-led companies at the exit stage (both IPO and non-IPO) in the past decade would have unlocked a potential €198.8 billion of value.

“Tapping into Europe’s diverse talent pool in the tech and investment sectors in the broadest and most effective way possible is vital if we are to capitalise fully on our many strengths in innovation,” Stéphane Ouaki, head of department, European Innovation Council, said.

“To address the persistent gender and diversity disparities within Europe’s innovation ecosystem, it is crucial to assess these issues in a coherent way using unified data. This is where the GENDEX project comes in.”

The Gendex report is intended to empower startups, scaleups, corporates, investors and policymakers to be able to take action and make decisions based on accurate, recent data and analysis, to improve the diversity among their businesses and investments.

The index provides four actionable recommendations to mitigate the apparent issues.

Closing the data gap by increasing and ensuring gender diversity reporting, following returns by allocating funding accordingly, securing IP rights for women by providing better legal support, and government co-investment to mandate gender-balanced portfolios is essential.

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The entire team behind the index implores business leaders, investment professionals and decision-makers across the board in the European deep tech scene to keep gender diversity and representation at front of mind, both to address disparities in representation and for the financial betterment of the industry as a whole.

“Gender diversity in tech is a problem we’ve never been more conscious of, but we’re nowhere near where we should be,” Raphael Crouan, managing director of Tech Clients in Europe for global law firm Orrick and President of French Tech London said.

“As a matter of fact, if you look at the numbers, we had a more diverse approach immediately post-pandemic than we do today. We are drastically lacking in consistency when it comes to this topic, across the board.

“However, you don’t change a generation of habits in one swoop, it’ll take another generation or so to put things right. This is why using an index as a point of reference is vital. By repeatedly assessing specific data points over prolonged periods, we’ll get a true understanding of the direction in which things are moving.”