2021 saw Irish women founders raise more than twice the record €105m in 2020.
New data from TechIreland indicates that in 2021 55 tech start-up and scale-up businesses with a woman founder or co-founder raised €230m to venture capital, grants and angel investments.
On International Women’s Day 2021, a goal set in 2018 to see funding raised by Irish women founders to surpass €100m was achieved and surpassed as 50 Irish tech start-up and scale-up companies with a female founder or co-founder raised a total of €105m through venture capital, grants, equity finance and angel investment.
“These are great results, but they are not grounds for complacency – female-led tech businesses still only get 13% of the investment into Irish tech. We can and must do better than this”
Now, on International Women’s Day 2022 (8 March) that figure has been more than doubled.
However, there is some distance to go towards parity when you consider that venture capital raised by Irish firms in the past year was €1.3bn.
Change needs to accelerate
A particular concern is the gender balance within the investor community where only 20% of partners in Irish venture capital firms are female and 30% of the mid-level team are women.
“Showcase our female founders and our female funders as role models. Society and the economy will benefit from harnessing their talent and perspective”
Chief Executive of TechIreland, John O’Dea said: “Diversity is really important as all the research shows that diverse teams perform better. From an investor’s perspective, and for Ireland, better performance means more wealth and employment. These are great results, but they are not grounds for complacency – female-led tech businesses still only get 13% of the investment into Irish tech. We can and must do better than this.”
TechIreland tracks more than 470 female founded companies, 16% of the overall start-ups and scaleups on the island. Of the 311 companies that raised funding in 2021, 18% are female founded.
As in previous years, the outliers take a large chunk of the pie. However young companies are scaling and raising larger, growth capital rounds. For the first time, eight female founded companies raised over €10 million each, or 70% of the total. In 2020 only two companies raised over €10 million.
Despite the huge jump in funding, companies with a female founder still raise less than the general population of tech companies. While female founders on average doubled their investment to €4.1 million last year, that was still significantly less than the average of €5.3 million for all companies.
“We can be confident that the investment climate for female founded companies in Ireland is improving,” said Sarah Jane Larkin of the Irish Venture Capital Association.
“However, none of us can be happy with a world where women secure only 13% of all funding, and we must now focus on efforts to accelerate the funding of female founded startups.’’
Despite significant support by Enterprise Ireland’s High Potential Start-up Funding and the Competitive Start-up Funding for early stage companies, the report shows a drop in the number of early stage rounds between €100,000 and €1m.
Sheelagh Daly of Enterprise Ireland said, “Back in 2011 only 7% of EI backed HPSUs included a woman founder. By putting a spotlight on this and providing capability and funding supports specifically targeting women, this has now tripled to over 21%.”
Healthtech, specifically life sciences, remains the top sector among women founders, adding to €117m or 50% of the total. In terms of the number of companies funded, Enterprise Solutions tops the chart with 35% or 19 of the 55 companies. Sectors such as cleantech and fintech recorded marginal increases in investment activity, whereas others like agritech, education and consumer products saw a marginal decline.
“Change is underway and great strides are being made, such as the €117m invested in the healthtech sector alone,” said Jennifer McMahon from Seroba Life Sciences. “Yet, numerous studies indicate that female founders face challenges in accessing capital, and in closing the confidence gap. We need more female led start-ups and various initiatives have created a nurturing environment for founders to ‘start’
The report also shows that Dublin-based female founded companies received more than 66% (€152 M) of the total. That is higher than the 46% share Dublin companies made in 2020. However, there were significant investments in female-founded companies in Galway, Cork and Mayo.
“We are fortunate that the Irish Government has a clear focus on growing the indigenous tech start-up sector and is incredibly supportive of female entrepreneurship,” said Niamh Parker from Altada Technologies.
Funding into female-founded companies in Northern Ireland represents less than 1% of the total funding raised, well down on their 4% share in 2020.
“Female founders deserve better,” said Mary McKenna of AwakenHub in Northern Ireland. “Last year the EU recognised that yet more needs to be done and launched a new Women TechEU pilot to provide additional supports for very early-stage female founders of deep tech businesses.’’
In conclusion, Gillian Buckley of the Western Development Commission said: “There is a lot being done but let’s keep the focus on encouraging more female founders and funders. Showcase our female founders and our female funders as role models. Society and the economy will benefit from harnessing their talent and perspective.”