Only 15% of the seed funding goes to women-led deep tech startups, reveals new study
Study of 7,165 startups across 37 countries reveals that the percentage of women founders in deep tech has doubled since 2010, however, women remain underrepresented in the field at 17.4% (average for 2010-2022) of all deep tech startups.
The Study has been brought forward by the European Institute of Innovation and Technology (EIT), a body of the European Union; the European Investment Fund (EIF) and European Investment Bank (EIB) Advisory Services. The main findings are now available and are being presented at the EIT INNOVEIT conference in Helsinki today. The full Study will be launched during the third edition of the Empowering Equity event, organised by the EIF and EIB Advisory on December 5th.
The EIT conference, INNOVEIT — Pioneering women: driving innovation and investment in Europe — is an event focused on the EIT’s role and impact in boosting women-led innovation and investment across Europe. The conference is showcasing the EIT as Europe’s largest innovation community in Europe and its innovation opportunities in deep tech, women entrepreneurship, sustainability and more.
7,165 startups founded since 2010 were analysed as part of the study using the Dealroom database (a global provider of data and intelligence on startups and tech ecosystems) across 37 European countries.
“This EIT study is a call to overcome the gender gap for investment in deep tech. The percentage of total funding going to deep tech startups with women founders stands at only 11.4%. This is a missed innovation opportunity that Europe simply cannot afford. That’s exactly where the EIT comes in. Our programmes, including SUPERNOVAS, are dedicated to strengthening women-led startups, providing access to funding, access to markets and clients, mentoring, thematic expertise, all as part of a community of partners across Europe.”
Women remain underrepresented but the trend is moving upwards
Whilst women founders remain a minority, the study finds that the percentage of women over the total number of founders of deep tech startups has doubled between 2010 and 2022 (from 7% to 14%). Similarly, whilst women are less likely to start a deep tech startup on their own, the percentage of solo woman startups has been steadily increasing.
The study notes that deep tech startups with at least one woman founder are significantly larger in terms of number of people employed, and that larger founding teams are associated with higher employee growth.
The study has also found that most women-led deep tech startups launched between 2010 and 2022 come from France with 2,616 (21.0%), followed by Germany and Spain. Netherlands, Italy, Sweden, Finland and Belgium are among the following most represented. In most countries, the percentage of women deep tech founders among all founders is concentrated between 10% to 20% with the average at 17%.
Funding remains a significant challenge
According to the findings of the study, women face significant funding challenges compared with their male counterparts. On average, deep tech startups with at least one woman founder receive less total funding, less funding per round, and smaller first rounds. Women-founded deep tech startups receive significantly less funding compared to those founded by men. At the seed stage, women-led startups secure only 15% of funding, while men-led startups take the remaining 85%. For early and late-stage venture capital, women-founded startups receive just 11% of the total investment, with 89% going to men-led companies. Women also face barriers to entering deep tech compared with other fields.
The report also indicates that women in deep tech may face barriers to accessing private investment and are more likely to receive a first round from public sources. Women deep tech startups not only receive a lower first valuation than their men counterparts, but they continue to receive lower valuations throughout their startups’ growth cycle and are less likely to reach a €20 million valuation.
The only positive trend in funding is that deep tech startups with women in their founding teams receive their first funding faster than startups with all-men founding teams.
In this context, the EIT and its Knowledge and Innovation Communities have launched the Supernovas programme, bringing more women into the world of entrepreneurship and investment as well as supporting women already in it, facilitating women’s engagement in the early-stage investment industry, and igniting growth for women business angels and VC investors.
During the INNOVEIT event, the Supernovas Data Room is also presented – a platform showcasing women-led startups in high and deep tech entrepreneurship across all EIT Knowledge Communities: EIT Climate-KIC, EIT Culture & Creativity, EIT Digital, EIT Food, EIT Health, EIT InnoEnergy, EIT Manufacturing, EIT RawMaterials and EIT Urban Mobility. The platform also gives investors, corporates, journalists, publishers and other interested parties access to data about these startups.
About the European Institute of Innovation & Technology (EIT)
The EIT strengthens Europe’s ability to innovate by powering solutions to pressing global challenges and by nurturing entrepreneurial talent to create sustainable growth and skilled jobs in Europe. The EIT is an EU body and an integral part of Horizon Europe, the EU Framework Programme for Research and Innovation. The Institute supports dynamic pan-European partnerships, EIT Knowledge and Innovation Communities, among leading companies, research labs and universities. Together with their leading partners, the EIT Community offers a wide range of innovation and entrepreneurship activities across Europe: entrepreneurial education courses, business creation and acceleration services and innovation driven research projects.
The EIT bridges gender gaps in the European innovation and entrepreneurship, through gender mainstreaming, and tailored women entrepreneurship & leadership programmes. The EIT is acknowledged by the European Commission for bringing down barriers to women’s participation in Europe’s innovation. In 2023, the EIT won the European Union Agency Network (EUAN) Diversity & Inclusion Award. In the EIT Community women make 40% decision makers, 27% of CEOs/ Owners of the EIT KICs-supported start-ups and scale-ups, and 45% graduates from the EIT labelled education programmes. Join us to make gender-smart innovation happen!
About The Supernovas Programme
The Supernovas Programme is an EIT Community Initiative led by EIT Food, EIT Manufacturing and EIT Urban Mobility, Knowledge and Innovation Communities of the European Institute of Innovation and Technology (EIT) The aim of the Supernovas programme is to bring more women into the world of entrepreneurship and investment. Supernovas empowers women-led start-ups and future role models for women in business while at the same time fuelling talent to the next generation of women VCs and angel investors.
Find out more at www.eit.europa.eu.
Check out the EIT Gender Equality Factsheet.