Women are Significantly Underrepresented in the European Tech Ecosystem

According to a recent study conducted by Sista in collaboration with the Boston Consulting Group, women continue to be significantly underrepresented in the European tech ecosystem. The research sheds light on the alarming gender gap, revealing that only 22% of startups founded in 2022 included at least one woman in their founding team.

Even more concerning is the fact that when examining women-only founding teams, the number drops significantly to a mere 10%. In essence, a staggering 78% of European startups established last year had male founders exclusively.

The study, which focused on five key European countries – France, the U.K., Germany, Spain, and Sweden – uncovered the persisting gender disparity across the region. While women’s representation remains low in France, the U.K., Germany, and Spain, Swedish startups show a slight improvement. In Sweden, nearly one in three startups boast the inclusion of at least one woman in their founding team.

Comparatively, startups with all-women founding teams in the United States secured a mere 1.9% of venture capital funds invested in 2022. In Europe, women-only teams received a slightly higher proportion of funding, capturing 7% of angel and pre-seed investments. However, this figure drops significantly when examining late-stage startups, with only 2% of Series D rounds or later being raised by women-founded startups.

The study highlights a widening financing gap as startups progress to later stages. This imbalance is further exacerbated by the lack of female role models within the industry, as they play a crucial role in inspiring and encouraging aspiring entrepreneurs.

Furthermore, the research reveals that startups with at least one woman founder tend to perform better financially. In 2022, mixed-gender teams raised an average of €12.1 million, while men-only teams secured an average of €17 million. In contrast, investors chose to invest a meager average of €4.2 million in women-only teams.

These funding disparities can be attributed to the underlying issue in the European tech ecosystem, where women are underrepresented not only as startup founders but also as investors and tech executives.

In response to these challenges, Sista has developed a charter aimed at investors and venture capital firms, with the objective of promoting gender parity. By 2025, Sista hopes to ensure that 25% of startups funded by “investor allies” will have at least one woman co-founder. The organization aims to increase this figure to 30% by 2030, ultimately striving for 50% gender representation by 2050.

The findings of this study underscore the pressing need for concerted efforts to address gender inequality in the European tech industry. Creating a supportive and inclusive ecosystem that fosters the participation and success of women entrepreneurs is crucial for achieving sustainable growth and innovation in the region’s startup landscape.

The gender disparity highlighted in the study not only hampers women’s opportunities for entrepreneurial success but also hinders the overall growth and innovation potential of the European tech sector. Research has consistently shown that diverse teams lead to better decision-making, improved financial performance, and increased innovation. By excluding women from the startup ecosystem, Europe may be missing out on significant economic and technological advancements.

To bridge the gender gap in the tech industry, it is essential to address the systemic barriers that women face at every stage of their entrepreneurial journey. Initiatives such as mentorship programs, networking opportunities, and targeted funding schemes can provide the necessary support and resources for aspiring women founders. Additionally, efforts should be made to promote diversity in leadership positions and foster a more inclusive culture within the tech community.

Investors and venture capital firms also play a critical role in promoting gender parity in startup funding. By adopting Sista’s charter and committing to investing in diverse founding teams, investors can help break down the funding barriers that women entrepreneurs often encounter. Furthermore, it is crucial to eliminate unconscious biases in investment decision-making processes and actively seek out opportunities to support women-led ventures.

Government bodies and policymakers can contribute to fostering gender equality in the tech ecosystem by implementing supportive policies and regulations. This can include creating incentives for venture capital firms to invest in diverse founders, promoting gender-balanced representation on corporate boards, and providing targeted funding programs for women entrepreneurs.

The findings of this study serve as a call to action for all stakeholders in the European tech community to collectively work towards achieving gender parity. By empowering women, promoting inclusivity, and providing equal opportunities for entrepreneurship, Europe can unlock the untapped potential of its diverse talent pool and drive innovation and economic growth in the digital age.

The industry must recognize that gender equality is not only a matter of social justice but also a strategic imperative. By harnessing the full potential of all individuals, regardless of gender, Europe can establish itself as a global leader in technology and entrepreneurship while creating a more equitable and prosperous future for all.