More venture capital funding is going to female founders than in previous years, according to research.
Twenty-seven per cent of equity deals in the UK last year went to female founded or co-founded businesses, up from 24 per cent in 2021, a report by Beauhurst has found.
The figures follow a report by KPMG that total VC investment in UK businesses dropped by a third in 2022, although the £22.7bn total was still the second-highest figure since the report began in 2014.
Over the course of the year, businesses set up by women alone secured 9 per cent of equity funding, an increase from 6 per cent in 2021. The total raised by companies in 2022 was £19.7bn.
Despite the rise in companies receiving funding, the amount invested in female-founded businesses accounted for just 2 per cent of the total pot, pointing to VC firms mostly backing the very earliest stage businesses rather than making larger, follow-on investments.
A study from J.P Morgan Private Bank and Beauhurst last year found female founders were giving away 10 per cent more equity to VC firms than their male counterparts, with 43 and 33 per cent being given away respectively.
Many VC firms are making a concerted effort to back more women-led businesses, with funds such as Capital Pilot’s Boost Fund 1 and the Fund Her North campaign concentrated on doing so.
Henry Whorwood of Beauhurst told Growth Business: “Beauhurst monitors a couple of metrics around diversity among UK start-ups and scale-ups; investment into female founders is where we see the most initiatives to improve diversity, so it’s great to see their impact being felt, especially when conditions are tightening in the overall market.”
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