The Landscape of Venture Investment in Female-Founded Startups
Venture investment in startups led by women has historically lagged behind the overall market, a trend that has raised concerns about the future of female founders, especially as companies across various sectors scale back their diversity, equity, and inclusion efforts. However, a recent report from the European venture platform Female Foundry offers a more nuanced perspective for 2024, revealing both challenges and opportunities for women entrepreneurs in Europe.
A Closer Look at the Numbers
According to the Female Innovation Index 2025, venture investment in startups founded by women in Europe saw a decline of 12% in 2024, mirroring the overall 11% decrease in venture investment across the board. This statistic suggests that while female-founded startups are still facing significant hurdles, they are not disproportionately affected compared to their male counterparts. The report indicates that female entrepreneurs raised €5.76 billion in 2024, down from €6.56 billion in 2023, highlighting the ongoing struggle for funding in a competitive landscape.
The Rise of Deep Tech
One of the most promising findings from the report is the increasing success of women in the deep tech sector. Female founders in this area are raising more capital than their male counterparts, with approximately 33% of all venture capital raised by female entrepreneurs in Europe directed toward deep tech startups. This figure is notably 2% higher than the capital allocated to gender-agnostic startups. Key areas of innovation within deep tech include synthetic biology, generative AI, and drug development, all of which are attracting significant investment and attention.
Methodology and Sample Size
The Female Innovation Index report is based on a comprehensive survey of over 1,200 female founders, investors, and executives, as well as more than 35 private equity firms and venture associations across 20 European countries. A crucial aspect of this report is its inclusive definition of female-founded startups, which includes any startup with at least one female co-founder. This broader definition significantly increases the sample size and provides a more accurate representation of the landscape compared to other reports that focus solely on all-women founding teams.
The Gender Gap in Venture Capital
Despite these positive indicators, the gender gap in venture capital remains stark. All-women founding teams raised only 2.2% of the total venture capital allocated in 2024, a statistic that underscores the ongoing challenges faced by female entrepreneurs. Agata Nowicka, the founder of Female Foundry and author of the report, emphasizes the need for more nuanced metrics in understanding the contributions of female founders. She notes that her own experience as an entrepreneur with a male co-founder would not have been captured by the traditional 2% statistic, highlighting the importance of inclusivity in data collection.
Encouraging Women in Academia
Nowicka also points out that while the deep tech sector shows promise, there is still a stigma associated with transitioning from academia to entrepreneurship. Encouraging women in academic environments to pursue entrepreneurial ventures could help bridge this gap. The COVID-19 pandemic has played a role in leveling the playing field, as the industry has become more accessible and competitive, particularly for women seeking venture capital.
Transformations in the Venture Capital Landscape
The venture capital landscape has undergone significant changes in recent years, particularly during the COVID-19 pandemic. As the industry adapted to new realities, many venture capital firms became more accessible to women entrepreneurs, driven by a need for deal flow and increased competition. Nowicka recalls a time when many venture capitalists lacked even a basic online presence, making it difficult for female founders to connect with potential investors. The transformation brought about by the pandemic has opened doors for women in tech, creating new opportunities for growth and investment.
Key Insights from the Report
The Female Innovation Index 2025 report offers several noteworthy insights:
- Female-founded businesses in Europe raised €5.76 billion in 2024, a 12% decrease from the previous year.
- The health, fintech, and food sectors are leading in venture investment for startups with female founders.
- Female founders experience the most success at the seed stage, with average round sizes increasing by 7% across all stages compared to 2023.
- Over 80% of the largest funding rounds for female-founded startups in 2024 were secured by those with scientific backgrounds, particularly in synthetic biology, generative AI, and drug development.
- The U.K., France, and Germany are the top countries for investment in female-founded companies, while Finland and Denmark allocate the highest proportion of venture capital to these startups.
Conclusion
The data from the Female Innovation Index 2025 paints a complex picture of the venture investment landscape for female founders in Europe. While challenges remain, particularly in terms of overall funding and representation, the growth of women-led deep tech startups and the evolving venture capital environment offer a glimmer of hope for the future. As the industry continues to adapt, the potential for female entrepreneurs to thrive is becoming increasingly evident.