The UK’s startup ecosystem is suffering from a ‘deep and persistent’ gender funding gap, with women, and especially all-female teams, struggling to raise the same level of investments that male-led ventures typically enjoy.

UK-based policy and advocacy group Startup Coalition’s latest report, Girls Just Wanna Have Funding: Addressing the Barriers to Finance for Female Founders, found that gender disparity is deeply rooted among UK-based startups and scaleups, where despite women making up nearly 14% of founders, all-female teams receive just 6-7% of equity deals. 

All male founding teams take in 72-73% of deals across markets, while a disproportionate share of funding for female founders flows to mixed-gender teams, which the data shows receive 21% of British Business Bank (BBB) supported deals and 19% of overall equity market and PE/VC market deals.

According to Startup Coalition, a non-profit that campaigns in support of tech startups in the UK, the gulf widens at higher investment levels.

Female-founded and led companies receive only 2.4% of raises worth £10 million or more, with thirty-six times as many male-founded startups securing high-level deals, while three times as many companies founded by mixed teams hit the £1 million mark.

Figures from the BBB’s most recent Small Business Equity Tracker illuminate the scale of the problem. In 2023, all-female founding teams secured just 162 equity deals worth £232 million, compared to 1,413 deals totalling a staggering £6.5 billion for all-male teams over the same period. 

Put another way, all-male teams have managed to raise more deals during a single year than female teams have in the last decade.

Part of the problem stems from investor bias, with many of the female founders questioned as part of Startup Coalition’s research reporting that they were treated noticeably differently to their male counterparts in interactions with investors.

That included questions about their competence, commitment, and the seriousness of their ideas, while male founders were more typically asked business and technical questions.

Those sentiments are backed up by recent research from wealth management firm Charles Stanley and data platform Beauhurst, which found that 25% of women feel that, even in 2024, it would be much easier to secure funding for their venture as a man. 

For those female founders from minority backgrounds, the situation is even more stark. Several reportedly told Startup Coalition that they didn’t feel taken seriously by investors until they ‘brought a white man’ into the C-suite, seeing this as having a significant impact on their ability to secure funding.

At a debate yesterday (13th May), the UK parliament heard from Sarah Olney MP, who pointed out that only 0.24% of venture capital funding between 2009 and 2019 went to black founders, with women from ethnic minorities raising only 0.02% of the total amount invested through VC.

“What entrepreneurs from affected communities need is for the Government to take meaningful action to ensure that the UK’s venture capital industry is accessible and inclusive,” said Olney.

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To that end, Startup Coalition’s report makes several key recommendations for concrete steps the UK Government, regulators, and funding bodies can take to deepen support for existing initiatives and help break down barriers to funding.

Among those is a call for better access to grant funding and angel investing for female founders, clear guidance from regulators and development banks to prevent discriminatory investor practices, and childcare reforms that support women in entrepreneurship.

The organisation also wants the government to make the Investing in Women Code mandatory for public funding recipients, which aims to increase the finance provided to women-led businesses by asking signatory firms to commit to promoting female entrepreneurship.