More than two decades after the first high-profile campaigns to support women in enterprise, the UK’s female founders still receive a tiny fraction of the venture capital (VC) invested in startups. According to the British Business Bank’s latest UK VC & Female Founders report, all-female founder teams secured just 2% of total UK equity investment in 2022 — down from 2.4% in 2021 and well below the 3.6% peak seen in 2018. All-male founder teams, by contrast, captured 87% of the total, with mixed-gender teams accounting for the remaining 11%.
Put simply, for every £1 of VC funding raised in the UK, all-female founder teams receive around 2p. The gap is not only in the share of funding but also in the size of individual deals. The average round raised by an all-female team in 2022 was £1.6 million, compared with £2.8 million for an all-male team — a difference of roughly 43%. This means women are not only less likely to raise at all; when they do, they typically raise substantially less.
The downward trend is particularly disappointing because the number of women-led businesses in the UK has grown significantly over the past decade. The Alison Rose Review of Female Entrepreneurship estimates that women-led businesses now account for around 20% of all UK businesses and contribute approximately £105 billion to the economy. The Review also calculates that closing the entrepreneurship gender gap could add as much as £250 billion to the economy if women started and scaled businesses at the same rate as men.
Yet access to finance remains one of the biggest brakes on that growth. Women entrepreneurs are twice as likely as men to cite a lack of access to funding as a barrier to starting or scaling a business, and the latest VC data suggests the problem is getting worse, not better. While all-female teams accounted for 6% of UK VC deals in 2022 — up slightly from 5.6% in 2021 — the amount of capital flowing to those deals has fallen. This points to a “quantity without scale” problem: more women are starting investable businesses, but investors are writing smaller cheques and male-led teams continue to dominate the largest rounds.
Alice Hu Wagner, Managing Director of Economics and Business Finance at the British Business Bank, said: “The UK has a world-leading venture capital market, but it is clear that more needs to be done to ensure female founders can access the finance they need to grow. The decline in the proportion of investment going to all-female founder teams is a reminder that progress is not inevitable and that targeted action is needed to address the barriers female entrepreneurs face.”
Sector patterns show both overlap and divergence. Health technology, e-commerce and artificial intelligence appear among the most common sectors for both male and female founders, reflecting the UK’s strengths in digital and life sciences. Women are also strongly represented in femtech, sustainability, education technology and social enterprise, while men continue to dominate fintech, enterprise software and deep-tech hardware. These differences matter because some of the highest-growth, highest-investment sectors — such as fintech and SaaS — remain male-dominated, which can skew overall funding totals and limit the visibility of female founders in investor networks.
Geography also plays a role. London continues to dominate the UK startup ecosystem, hosting around 47% of all-female founder teams that raise VC, followed by the South East, East of England and Scotland. Beyond the capital, Cambridge, Edinburgh, Manchester, Bristol, Glasgow and Oxford all have active networks of female founders, incubators and angel groups. The concentration of funding in London and a handful of other cities underlines the importance of regional funds, angel syndicates and mentorship programmes that can connect women entrepreneurs with investors outside the Golden Triangle.
The barriers are not purely financial. Research consistently finds that women entrepreneurs face smaller professional networks, fewer warm introductions to investors, and a pitching environment that can favour male-coded language and growth narratives. Maternity, caring responsibilities and a lack of flexible funding options can also affect timing and risk appetite. Founders frequently note that the questions of maternity leave and childcare are non-trivial when running an early-stage company — budget is usually tight and company policies are undefined.
Despite the gloomy headline figures, there are signs of change. The Investing in Women Code now has more than 180 signatories, including major banks and venture capital firms, who have committed to collecting gender-disaggregated data on the founders they finance. Female-focused angel networks and government-backed schemes are also designed to improve transparency and increase the flow of capital to women-led businesses. A growing number of institutional investors now track the gender composition of founding teams, and several high-profile exits by female-founded companies have helped to demonstrate the commercial case for backing diverse founders.
For women entrepreneurs looking to raise investment, the message is to prepare early, build relationships with investors before you need the money, and seek out funders with a track record of backing diverse teams. Our guide to finding funding lists grants, loans, angel networks and venture capital options aimed at women-led businesses in the UK.
Closing the gender funding gap is not only a matter of fairness. It is an economic imperative. Until female founders can access capital on equal terms, the UK will continue to miss out on a substantial pool of innovation, jobs and long-term growth.
