Women still underrepresented on European VC market

There is no improvement from a gender perspective on the European venture capital scene. It experienced record-breaking growth in 2021, with over Euro 100 billion invested in one single year in European startups. These investments created almost 100 unicorns in the region and contributed to a strong startup pipeline going into 2022, a report from European Women in VC shows.

“Despite these staggering results there remain challenges on the way forward, especially when it comes to gender diversity. Progress is flat. Comparing 2021 to 2020, there has been hardly any change in the percentage of funding that is raised by all-male founding teams, all-female founding teams or mixed gender founding teams.”  ​

Financial data and software company PitchBook says that Q1 2022 recorded 153 existing Europe-based unicorns, a 21.4% jump from 2021’s cumulative figure, and 28 new unicorns were minted during the quarter.

European Women in VC commissioned IDC to analyze the female funding gap on both funders and founders level for a Pan-European report (covering EU 27 + UK) providing a survey and data based overview of gender diversity across the European VC sector. ​

“From a funding perspective the gender gap is ubiquitously present. The combined desk and survey research of over 400 venture firms managing each at least Euro 25 million in AUM (assets under management), indicates that on average 85% of VC General Partners are male, 15% female”, European Women in VC says. ​

“However, moving towards a balanced gender structure at the VC/ funding level clearly indicates that the number of female GPs (general partner) must increase. More importantly though these female GPs need access to larger pools of capital, they need to manager larger funds, if they want to exert influence on the start up market and be able to follow on with portfolio companies. Analyzing actual investment power shows that female GPs have less investment power (9%) of the total AUM versus 91% of the male GPs of the total AUM, indicating that females tend to be GPs at smaller funds.”

“The strong emergence of bio-tech and life science funds of a significant size, in certain parts of Europe, is the early sign of progress in bringing more capital to the hands of female investors and creation of diverse investment teams”, says Kinga Stanislawska, Co-founder of the organisation. “If this segment of funds was removed from the analysis, the picture of European VC management will show significantly a lower result for female presence across general partnerships”

The funding gap for female founders remains largely the same as in the previous years even though capital deployed to mixed founding teams increased slightly. In 2021, female led startups raised just 1,8% of investment in Europe.

“The problem is systemic, thus we must search for holistic solutions. Capital imbalance is not only visible at startup level, it exists across the entire value chain and must be tackled from the top of capital flows. We need more capital for female led funds and female GPs on the fund management level! This is a solution for more venture money to reach female founders and in general to better address impact and smart investing”, says Anna Wnuk, Head of Community of European Women in VC.