Supernovas | Achieving Superior Returns with Gender Diversity in European Venture Capital Firms
In 2021, the European tech ecosystem broke records as total investments reached $100 billion for the first time. However, 2022 was a sobering follow up — according to Atomico’s State of European Tech, investments totalled $85 billion during the year. Despite the 18% year-on-year decline resulting from uncertain macroeconomic conditions, this outcome still represented a twofold increase over capital investments in 2020. Nevertheless, this overall positive scenario does not align with relevant gender diversity improvements in the European Venture Capital (VC) ecosystem.
This report is a continuation of research started by IDC and European Women in VC (EWVC) in 2022. It also provides a 2023 update of selected findings from the 2022 report.
This report aims to show that the diversity of investment teams could be beneficial for superior return generation. According to our analysis, mixed-gender investment teams show higher returns on managed funds. The report also shows how gender diversity is much more than just a bullet point on an organization’s environmental, social, and governance (ESG) checklist.
Report findings are based on a survey of 104 European-headquartered VC firms representing 220 funds with combined assets under management (AUM) of nearly €12 billion, as well as a PitchBook data sample of 558 European-headquartered VC firms with combined AUM totalling €148 billion (over €25 million AUM each). For the financial performance analysis, the sample was narrowed to 100 VC firms and 220 funds with combined AUM of nearly €34 billion, based on the availability of fund performance indicators.