Female-led AI startups in the UK receive only 2% of investment agreements
From 2012 to 2022, the majority of venture capital funding in the field of AI, specifically 80%, went to teams composed entirely of men. In stark contrast, teams comprised solely of women secured only a minimal 0.3% of the total funding.
A recent report by the Alan Turing Institute reveals that female-founded companies have accounted for only 2% of artificial intelligence (AI) startup deals in the UK over the past decade. This gender imbalance in AI investment is an urgent issue, as female-founded companies secure an average of £1.3 million per deal, compared to the £8.6 million raised by all-male founder teams – in other words, six times less.
To address the gender imbalance in AI investment, the report recommends improving recruitment, monitoring investment practices, and diversifying the ecosystem. There is a growing demand for generative AI products, with leading tech companies like Microsoft investing heavily in AI startups. However, the gender diversity gap across the investment space and uneven funding rates for female-founded startups remain significant challenges.
Why does it matter?
The AI market is already a multibillion-dollar industry, with Goldman Sachs predicting the market to reach $200 billion by 2025. However, the gender imbalance in AI investment persists, with venture capital (VC) firms tending to invest in companies that reflect their own networks and value systems. Closing the gender gap in AI startup funding is crucial for innovation and equitable progress. Reforms in recruitment and promotion practices and increased transparency and accountability in VC funding can help bridge this gap and ensure equal opportunities for female-founded AI startups.