Meet the women closing the UK’s gender funding gap

For women entrepreneurs operating in competitive markets, growing a business can always feel like an uphill battle, especially when it comes to attracting investment for a venture. This is called the gender funding gap.

According to Crunchbase research, only 3% of venture capital funding goes to companies founded by women. But across the pond, the UK is tackling the gender funding gap head-on, with £255 million ($320 million) being earmarked for investment, particularly in women-founded businesses, through a government-backed task force. ) has just been procured. I spoke to the women who are leading the way to find out how they are closing the gender funding gap.

UK gender funding gap

Women are underrepresented as investors and underfund their businesses as founders. The gender funding gap refers to the disparity between investment funding and venture capital allocated to female and male entrepreneurs. The gender funding gap in the US means female founders currently receive just over 2% of venture funding in 2022, while the outlook is bleak in the UK.

“The gender investment gap in the UK is embarrassingly low. If you’re a female founder looking to secure funding in the UK, you’re likely to be at a disadvantage,” multi-exit entrepreneur and investor Debbie Woskow told me. told.

“The biggest barrier as a woman is that when you walk into a room to make a pitch, you’re likely to be faced with a room full of men. Only 11% of senior investment roles in UK companies are held by women. and 14% of angel investors The stark reality is that women are more likely to invest in other women, but unless women are represented in senior positions that influence the flow of capital, the size of investments will remain disproportionate. “It will be,” she said.

And high-growth companies can’t keep up with the slow pace of change. A UK government report on women-led high-growth companies, published earlier this year, said: “For every £1 ($1.26) invested in equity in the UK, only 2 pence (2.5 cents) goes into companies entirely founded by women, meaning economic growth has not improved at all.” 10 years. ”

The UK has not seen dramatic progress in terms of funding parity for women-led businesses, but now may be the time to finally turn the tide in the right direction.

Businesses powered by women are on the rise

A common justification for the gender funding gap is that there simply aren’t enough women business owners in the market, and as a result, fewer women entrepreneurs receive funding. But there is now evidence that the diversity of female founders is steadily improving.

A new research report titled “Top 200 Women-Powered Companies,” produced by JPMorgan Private Bank in collaboration with Beauhearst, shows that the proportion of companies founded by women will increase from 18.3% in 2021 to 2024. was found to have increased to 29.7%. Furthermore, despite overall investment falling, women-led businesses in the UK have secured 23.2% of total funding in recent years, up slightly from 23% in the UK. 2022.

“It’s really positive that women-powered businesses continue to be the driving force behind the UK economy,” Maya Prabhu, market head of UK domestic business at JPMorgan Private Bank, told me. spoke.

“Many of the big brands making waves in the market are from Beauty Pie, founded by Marcia Kilgore, to Tropic Skincare, founded by Susie Ma and Shreddy, to Tara, and Grace Beverly,” she said.

Closing the funding gap between men and women in the UK

Bright prospects for UK female founders in 2025 There is undoubtedly a long way to go to achieve gender parity in funding, but proportionally investment in female-led ventures is slowing to a trickle. is increasing.

A new initiative, the Investing in Women Taskforce, aims to accelerate that progress in the UK.

Mr. Woskow, co-chair of the task force, said: “The Investing in Women Taskforce is an industry-led, government-backed initiative set up to tackle the UK’s funding gap. Since its launch earlier this year, our initial focus has been to The aim was to create a £50m ($314m) funding pot for women-powered businesses, deployed through female investment professionals. ”

“The Investing in Women Taskforce was set up to make the UK the best place in the world for female entrepreneurs,” Hannah Barnard, head of business banking at Barclays and co-chair of the taskforce, told me. Ta.

“For too long, innovative women-powered businesses have been held back by a lack of funding. We need to challenge the status quo and engage the public and private sectors to create systemic change on both sides of the table. It’s bringing us together,” she said.

Since launching the taskforce in March 2024, Barnard and Woskow have exceeded their fundraising targets, raising £255 million ($320 million) and creating the world’s largest fund for women-led and mixed businesses. created one of the largest investment pools in the world. The pair are now ready to deploy capital into women-powered businesses through female investment decision makers and fund managers across the UK.

“While this funding pot represents an important milestone, there is still much work to do. We want and need to drive systemic change in the funding ecosystem.” said Waskow.

Barnard added: “It’s important to drive this change organically. We know that women investors are twice as likely to invest in women entrepreneurs. This is why we start at the top. It’s a way to prepare for generational change.”

And with a bright future ahead for female founders in the UK, there’s no reason why similar initiatives can’t work to close the gender funding gap in the US. The key to a brighter and more prosperous future is having more women in relevant positions of influence.

Closing the gender funding gap may finally seem achievable. “We know women support women, which is why women entrepreneurs need more women investors, creating a ripple effect of opportunity,” Bernard said. said.