Female founders don’t have it easy in European tech. Whether it’s struggling to raise later-stage rounds or having to field inappropriate questions from VCs, there always seems to be an extra hurdle to overcome when building a startup compared to their male peers.
Despite these obstacles, a recent PitchBook report examining the experiences of female founders and VCs in 2023 has found that while female founders still hold a relatively small portion of the total funding landscape, that portion is a growing one. The report delves into various aspects, including the percentage of decision-making roles women hold at VCs, the activity of female angel investors and the exit timelines for female-founder startups.
Here are five charts to sum up how female founders and investors are doing.
Female-founded startups broke two funding records last year
All-male founding teams in Europe have raised more than €10bn in funding every year since 2015, and have raised at least €4bn a year since PitchBook started recording data in 2010. By contrast, all-female founding teams have only passed the €1bn milestone once, in 2021.
But in a sign of good news from the report, they’re starting to grab a larger share of the total investment pie. Female-founded startups (with at least one woman cofounder) set all-time highs in 2023 when it came to the proportion of total deal value and deal count they represented across all of Europe’s funding rounds. They represented 20.5% of the total deal value generated by startups — 5.2% more than the year before — and 25.8% of the total deal count.
The UK leads the way in funding female founders
Of all the funding raised by startups with at least one female founder in 2023, the UK and Ireland grabbed the biggest share with 40% (a total of €4bn). France followed in second with 25.9% and the DACH region — comprising Germany, Switzerland and Austria — came third with 16.1%.
The order of the top three has been fairly consistent over the years. However, in 2019 and 2020, France and DACH swapped positions while the Nordic region was third in 2022 ahead of DACH.
At the other end of the scale, the Nordics saw the biggest drop year-on-year. Its share dropped from 15.4% in 2022 to 7.8% in 2023.
The number of active female angel investors fell by 42%
2021 was a good year for active female angel investors, with double the number participating in at least one deal compared to the year before. Those numbers were maintained in 2022, with 421 active investors — but in 2023 that figure fell to 244.
Though a decline compared to the years preceding it, it still signals progress: the 244 active female angels was an increase in the years before the surge in 2021.
Despite the drop, female angel investors still held onto a similar percentage share of total angel deals in 2023 than they had in 2022. 28% of female-founded companies that raised from angel investors in 2023 saw participation from female angels, compared to 2022’s 30.9%. That was also an increase from the 25.3% seen in 2021.
When it comes to the number of deals closed, there was a decline: 85 female-founded startups raised a round in 2023 that included a female angel investor, compared to 167 in 2022. But it’s worth noting that this drop isn’t surprising, given the overall downward trend in deal count across Europe’s last year.
Just 15% of the decision makers in Europe’s VC firms are female
The median time to exit for female-founded teams reached the highest since 2012 — but is still lower than the standard set across Europe.
As of December 2023, the report showed it takes a median time of 7.9 years for a startup with at least one female cofounder to exit, which is the highest it's been in 12 years. That said, those same startups have consistently exited quicker than all European startups combined. The median exit time for all of Europe’s startups stood at 8.5 years in 2023, which is the highest figure since PitchBook’s records began in 2010.
In a downturn where capital is being deployed more carefully and exit opportunities are in low supply, PitchBook’s report says this could be attractive for investors looking for sources of liquidity. “The ability to secure an exit in a timely fashion is an attractive quality for potential portofolio additions,” says the report, “and female founders have exhibited strength in this regard.”
To caveat that though, the difference between the two is around half a year tops.
