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In light of International Women’s Day, we put our focus on gender diversity in private equity this month, and the numbers are staggering.
The good news? Executive teams with at least one female outperform their all-male counterparts in almost every facet that matters for a growing company. HEC research proved that women-led private companies are twice as likely to exit and are less likely to fail. However, the institutional investment statistics for female-founded companies don’t reflect the impressive evidence in their favour. Women-led startups received just 2.3% of VC funding in 2020, and less than 1% of all UK bailout money this year.
Our campaign development team is constantly on the lookout for high growth businesses, and we’re dedicated to improving the industry-wide trends in favour of female founding teams. Keep reading to find out which 4 impressive, female-founded startups we’re currently watching:
The convergence of financial talent from the City and technical talent from the silicon roundabout, combined with growing apathy for legacy financial institutions in the wake of the 2008 financial crisis, made London the perfect place for a fintech boom. However, despite billions being poured into fintech challengers, there has been a remarkable dearth of funding towards female leaders in fintech. Anne Boden and several others have built amazing companies, but with only 3.8% of fintech funding going to female founders, they are, sadly, the exception rather than the norm.
One example of a founder working against this trend is Molo Finance’s Francesca Carlesi, who is building a completely digital mortgage lending experience. The pandemic has caused a seismic shift in the digitisation of the UK property market, fueled in part by restrictions on movement, but also government policy waiving stamp duty in order to stimulate house purchases. With a Series A under their belt, including an impressive debt facility, Molo has begun to attack this market with a buy to let offering. Seedrs investors have always demonstrated a significant interest in the intersection of fintech and proptech, with over 21,000 investments in this space alone. Their growth to date, and validation from TechNation, make Molo a deal that we’ll be following closely over the next few years.
Over the last decade female entrepreneurs and founders have made significant inroads into raising equity investment, however progress is slow with the vast majority of VC investment going to male founded businesses across the globe.
A core part of this change in growth has been down to support networks and organisations as well as crowdfunding platforms helping to facilitate investment into female-led businesses. According to Beauhurst, crowdfunding platforms have seen more accelerated growth in the percentage of deals going to female entrepreneurs since 2012 compared to their VC counterparts. In the last few years there has also been a notable rise in the number of businesses leveraging technology and product innovation to improve women’s health.
DAME, a femtech that produces premium, award winning and sustainable period products to customers in over 60 countries, is one of these businesses. A registered B Corp, led by the original founder Celia Pool, DAME’s period products cause as little harm to our environment as possible and are sold via subscription service to an ever-growing female customer base. Initially launching their business with the help of a record-breaking Kickstarter campaign, the business has continued to grow, raising millions and securing backing from Sky Ocean Ventures as well as leading angel investors.
We are keeping an eye on DAME’s progress and in particular, how they have managed to navigate the pandemic and grow their D2C business. We are looking forward to hopefully working with Celia and the team in the future.
Beauhurst’s Female Founder Industry Report indicated that just 1.5% of investment in the UK went to all female-founded teams in 2019. The inference here is that large institutions are not allocating very much money to female founders, meaning these entrepreneurs often have to search for alternative fundraising options and are limited to smaller fundraises. As a result, we see many seed-stage businesses successfully raise funding on Seedrs, confirming Beahurst’s assessment that equity crowdfunding is the most gender-equitable investor type. Hopefully in the future, we’ll see retail investor appetite for female-founded, seed-stage brands matched by its institutional counterpart.
A pattern that has definitely emerged recently is the large proportion of female founders innovating in the environmentally friendly, vegan and healthfoods space. One such business is BEPPS Snacks, founded by Eve Yankah. Keen to introduce black-eyed peas as a healthier alternative to crisps, Eve has managed to raise over £500k of funding in the last two years, and has her snacks stocked in Tesco and Asda amongst others. We’ll be keeping close watch on BEPPS’ growth this year.
The gender investment gap is a huge £15 billion sized problem in the UK alone and it’s been reported that workers who identify as female in the UK will retire with an average of £70,000 less in their pensions compared to their male counterparts. A report released on International Women’s Day this year noted that it’s not a lack of knowledge impacting the gender wealth gap, but rather a lack of forthrightness in their knowledge – a tendency to be less fearless and brazen with their accomplishments than men are.
Female Invest was founded by Camilla Falkenberg, Anna-Sophie Hartvigsen and Emma Blitz in 2017, with the goal to close the gender wealth gap by making investment as simple as possible through investment and personal finance education. In 2020, the three female co-founders were each listed in Forbes Europe 30 under 30 list for their work on Female Invest – the only women in that list from Denmark. To date they have built a community of over 80,000 women from 56 countries, and they have their sights set on a UK launch this year. In December, Female Invest raised $1.6m, backed by Danish fund Vækstfonden, Saxo Bank co-founder Shailendra Patel and an investor on Denmark’s Dragon Den, to power their UK expansion. I’m really excited to see what FemaleInvest do in the UK this year and hoping to see that translate into more female investors on the Seedrs platform!