Female founders in ‘green tech’ businesses are fast closing the equity funding gap, according to new research.
Female representation accounts for just over a third of all businesses in the sector (34%), according to the Female Founders Forum – a partnership by think tank The Entrepreneurs Network and Barclays.
As global and business leaders gather in Glasgow for Cop26, the report, titled Inspiring Innovation, reveals female-led GreenTech businesses have raised £2.8 billion in equity funding since 2018.
This totals 42 per cent of all venture capital going towards GreenTech businesses; almost one in three (31%) Scottish high-growth businesses are female founded – 6% higher the UK average.
However, despite progress for GreenTech businesses, the gender funding gap across all sectors still persists.
Across the UK, a shortfall of £1.6bn in funding for female entrepreneurs still remains, with female-led businesses raising only 15% of all equity finance. For Scottish female led businesses, this is just 13%.
Leah Hutcheon, founder of Appointedd – a smart scheduling system that enables staff to spend less time on manual scheduling, and more time on business critical tasks – is one of the Forum’s Scottish members.
Appointedd is based in Edinburgh, with a team of 30 people. The business has raised £2.5 million in investment and works with a range of clients – mainly in the retail, finance, professional services, and healthcare sectors – powering bookings in over 100 countries.
Leah Hutcheon, CEO and founder of Appointedd, said: “Having built a technology company that has customers all over the world, it’s easy to forget the challenges that we’ve faced during that journey – but unfortunately the stats don’t lie. With only 1p in every £1 of Venture Capital funding going to all-female founder teams, the odds are stacked against us3. Luckily, there’s a lot of support out there and I feel genuinely lucky to be party of the supportive network that organisations like The Entrepreneurs Network and Barclays offer. It’s at times like this when innovation really thrives – but all cutting edge companies need to have the right backing to succeed.”
Aria Babu, Head of the Female Founders Forum, said: “It’s encouraging to see the gender funding gap start to close, but there is still a way to go. We know women start businesses with on average half as much money as men do, so raising equity finance is critical. However, due to unconscious bias, Venture Capitalists are more likely to invest in people just like them – and with half of firms not having any female investors, female founders are massively on the back foot.
“The last 18 months have demonstrated the importance of innovation, from life-saving developments in Life Sciences, to technology bringing our society together. It’s incredibly important that female founders in all sectors are receiving proportional backing from investors, to ensure no opportunities are missed and the UK stays at the forefront of innovation.”
Katherine Morgan, Head of High Growth & Entrepreneurs at Barclays, said: “It’s inspiring to see female entrepreneurs leading the charge in GreenTech. In the run up to COP26, innovations from these companies will be vital in helping the UK reach its target of net zero by 2050. However, despite this sector setting the standard, overall progress is stagnant – and we need investors to help women in all sectors succeed.
“At Barclays, we’re committed to connecting more women with the right finance and providing skills to this generation of female entrepreneurs, as well as the next. I’m continually amazed by the innovative businesses we work with, such as Appointedd, and I know these female entrepreneurs will continue to inspire the next generation of female-led STEM businesses. However, we need a collective effort across the industry to ensure we’re doing everything we can to make the UK the best place in the world to be a female entrepreneur.”
