Of all the startups launched in the UK between 2000-2018, 19.4%were founded by women.
It’s safe to say that the startup scene has always largely been dominated by men. As this stat shows, it still is. Delve deeper into that figure, however, and women entrepreneurs in the UK have founded over 500 still-active startups in the last 18 years.
Women founders are taking their much-deserved place in the business world through newfound confidence in the system, winning ideas and grit – but there’s still a long way to go.
Despite evidence that women-led companies perform better than male-founded startups, generate 10% more in cumulative revenue over five years and are less prone to corruption, women-founded startups achieve considerably less funding from the investment community.
Through a series of interviews with women founders and analysis of Crunchbase’s data on startups with at least one woman founder, we’ve unpacked key stats that tell the story of women-led startups across the UK.
The top industries are similar for both men and women, though certain research and community-led fields, such as education, are more prominent with women founders. Quantitative-based sectors like finance are also traditionally seen as male-dominated industries, which not only creates career advancement challenges for women in these sectors, but engenders cognitive bias, steering women towards more soft-skilled-based businesses.
Healthcare is a top industry for women due to the recent rise in 'Female Health Innovation' or 'FemTech'. Research shows that women make primary healthcare decisions for their families, are key influencers on healthcare advice for friends, and are more likely to use digital healthcare tools compared to men. It’s no wonder then that this industry – which incorporates fertility solutions, period tracking and pregnancy care – is not only booming but is being led by women founders.
Charlotte Guzzo, co-founder of Heterogeneous – a DNA insights platform – reveals why she began her startup below.
We wanted to build a platform that would allow individuals to truly be a part of the research process and to contribute to scientific progress. We thought that if people knew the difference, they could make with their data, they would likely want to participate and benefit from cutting-edge insights about their own health in the process. Unlike many direct-to-consumer sequencing companies, however, we also felt that it was fundamental for individuals to fully control their data and decide who can access it and for what purpose.
It’s no surprise that London and Cambridge, the UK’s answer to Silicon Valley, are home to the most startups, but the more interesting data lies within the types of startups found in these cities, as shown in the table below.
Healthcare startups are the most popular ventures for women founders in London, while Cambridge’s scientific, analytic and tech resources seem to have led women to see more potential in IT, financial services and AI.
Scroll down to view the number of startups across other major cities in the UK.
Types of Startups Founded by Women
Clothing and Apparel Design
Advertising, Sales and Marketing
Sports Health Care
Types of Startups Founded by Men
Information Technology Software
Fitness, Health Care, Wellness
Types of Startups Founded by Women
Privacy and Security Software
Consumer Goods and Engineering
Data and Analytics
Science and Engineering
Types of Startups Founded by Men
Medical Device, Therapeutics
Clinical Trials, Virtual Reality
Content Syndication, Publishing
Manufacturing, Renewable Energy
Glasgow takes the third spot for women, boasting the closest thing to a level-playing field in terms of the startup gender gap.
The biggest disparity appears to be in Manchester and Edinburgh, home to more than 50 men-founded startups and fewer than 10 women-founded startups.
Despite a dip in 2014, the steady-then-steep curve in women-led startup numbers can not only be attributed to a cultural shift towards entrepreneurialism, but also to society’s willingness and government pressure to support women founders.
Underlying societal norms, such as men being primary breadwinners and women taking career breaks to start families, may still deter women from founding a company.
The sharp drop between 2015-2017 is also seen across men-led startups – perhaps a result of Brexit uncertainty and investor appetite moving away from Angel and Seed investment towards funding more mature businesses at later stage investments in areas like finance; this inevitably favours male-dominated founders. You can read more about this in KPMG’s global analysis of funding.
Beneath the bar chart, you’ll find key dates of funds, schemes and communities that may have influenced the trend.
Please note: 2018 data is not yet available and therefore hasn’t been included in the chart
Woman-led UK startups receive only 12.8% of total funding. Unfortunately, there may be a direct link between gender and the lack of funding. We spoke to two women founders who, despite having personally witnessed bias, remain adamant that sexism won’t hold them back. Read their testimony below.
Funding for startups founded by men£20,207,446,424
Funding for startups founded by women£2,579,818,506
There was an investor who attended the Entrepreneur First demo day, who said that they wouldn’t invest in our company because the CEO was female. EF blacklisted them from their investor list. Whilst this was an instance of overt sexism, unconscious bias does exist towards female founders and other underrepresented groups. That being said, this was very much the exception, and Brolly has an incredible group venture capital and angel investors backing us from the US and UK. Generally, I’ve never seen this as a barrier that will affect Brolly’s progress or success.
I think there are genuine biases against women, particularly around getting funding, - I know this from personal experience. That said, being aware of that and challenging yourself to overcome those barriers is a great place to start. And let’s not forget that generally speaking, women are more collaborative and community-minded than men, these attributes definitely help when setting up by yourself.
Startups go through a series of funding stages from venture capital firms. They progress through the funding series as they demonstrate:
• Increased probability of success
• Proof of concept
• Growth in customer base
As discussed, VC investment focus has shifted towards businesses at Series A and B stages, where women-led companies are less prevalent. Investors are also favouring male-dominated industries like Fintech and AI.
Orla Shields, CEO and Co-Founder of GetRentr, also highlights the abundance of male investors and how we tend to subconsciously stick to our own kind.
Hover over each bar in the chart to see the percentage of businesses currently at each venture stage.
…if you look at the statistics, far fewer female entrepreneurs get VC and angel investment for their businesses and I do think this is an issue. There are fewer female entrepreneurs, of course, but I think when you allow for that, there are still far too few female entrepreneurs getting funded. It’s hard to say what the reason is, though my hunch is that there are also far fewer female investors. The fact that we as female entrepreneurs are pitching to men 99% of the time may mean that there is sometimes an unconscious bias.
Size isn’t always an indicator of success. The successful companies of the founders we interviewed, GetRentr, Brolly and Farillio, all have 1-10 employees.
Overall, the data shows that more women founders currently have companies with 1-10 employees. This could mean that they’re at the initial growth stage, or perhaps that they have a lack of funding. As founders Romi Savova and Merlie Calvert explain – it could be that women also take a more considered approach to hiring.
It’s crucial to build the right team, who you can trust to help deliver your vision. Culture is at the heart of every organisation and I’m constantly inspired by the PensionBee team and their ability to make the right decisions so that we do right by our customers.
…if you surround yourself with great people, you’ll be amazed what can get achieved. Farillio is only possible because great people also staked their careers, reputations and money on it alongside me. I might be the driving force behind it, with a very strong vision of what I want us to achieve, but it’s only as a team that we can achieve that vision – and make it far better, in fact.