Catalysts of growth
Startup founders play a pivotal role in driving innovation and economic growth in Europe, serving as catalysts for new technologies, services, and business models.
They help to address unmet market needs, which leads to increased competition, productivity, and technological advancements.
Economically, startups contribute significantly to job creation, with many of Europe's new employment opportunities arising from young, fast-growing companies.
By fostering a dynamic and competitive business environment, startup founders encourage a culture of innovation that is essential for Europe's ability to maintain its economic vitality in the global market, adapt to technological changes, and sustain long-term economic prosperity.
The Builders
1
1.1
The Funnel
Capturing potential
Mapping the data across the entire funnel of female-founded businesses in Europe, as they navigate through various development stages, from an idea to an exit, provides invaluable insights into the innovation ecosystem and highlights opportunities for investment and support.
By understanding patterns, challenges, and milestones, investors and policymakers can adapt their strategies and resources to better meet the needs of European female-founded companies at each stage of their development.
Understanding the funnel better also helps to identify high-potential ventures and sectors ripe for innovation, enabling more targeted backing of the female-founders likely to drive significant economic and technological growth.
See below a bird's eye view of the number of female-founded companies that are at the top of the investment funnel in Europe.
Notes:
Source: Dealroom
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Founder, Saidot
Meeri Haataja
€1.75m Seed round in October
Finland
"The AI industry where we operate, attracted a lot of capital in 2023, so the investment environment has been quite positive for us regardless of the overall climate.
What has made a big impact on our fundraising success was the restructuring of the company during 2023. One of the two original co-founders who was not operationally involved sold his shares to a late co-founder who joined the company in an operational role, making the company more attractive to investors. So even in the uncertain investment climate, we managed to implement changes that had a big impact on our fundraising outcome."
1.2
Funding Overview
Building in a bear market
Building a startup in 2023 was challenging for European female founders largely due to the prevailing macroeconomic conditions and a significant contraction in available capital.
With high market uncertainty, inflationary pressures, and geopolitical tensions, angel investors and VCs adopted a more cautious approach when deploying capital, resulting in a tighter overall fundraising environment for startups seeking an investment.
Consequently, reduced liquidity has meant that female founders had to rethink their operating models and expansion plans, run leaner budgets and prioritise financial sustainability.
Key insights.
Even though the total amount of funding dropped in 2023 to €5.9 billion from €8.9 billion in 2022 and €9.5 billion in 2021, the drop is consistent with the overall venture capital slowdown we have seen across the capital markets in 2023.
However, 70% of those venture capital investors that are proactive in increasing their female-founder deal flow prioritise their network outreach as oppose to self-organised events, 33%, conferences, 30%, and mentorship programs, 30%, to discover new investment opportunities.
While the United Kingdom has consistently taken the top spot over the past five years, France, Germany, and Finland have been taking second and third places.
Those venture capital funds that are proactive in increasing their female-founder deal flow prioritise network outreach, 70%, self-organised events, 33%, conferences, 30%, and mentorship programs, 30%, to discover new investment opportunities.
The size breakdown of 2023 investment rounds for female founders in Europe clearly indicates that it was the slowdown in investments for rounds of €90M+ that was the primary reason behind the decline in total funding between 2022 and 2023.
Analysing deal numbers across stages reveals that Pre-Seed stage companies were the hardest hit by the economic downturn, experiencing a 36% reduction in deals. Meanwhile, the Seed stage remained the most active, showing only a 15% reduction in deal-making.
Female entrepreneurs in Europe raised
The total amount of funding raised by European female entrepreneurs in 2023.
€5.9B
Notes: Whole of Europe.
Source: Dealroom
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Founder, Outdid.io
Ana-Maria Pricop
$2.5m Seed round in June
United Kingdom
"Our latest fundraising round was challenging; It took us more than six months to fundraise.
The involvement of angel investors played a crucial role in attracting the attention of these venture capitalists. Ultimately, we decided to decline one of the term sheets after careful consideration of what we as founders and the business need.
Female founders that raised capital believe it is harder to raise capital today than it was twelve months ago
To gain a better understanding of how female founders feel about the current fundraising conditions, we asked them in our survey whether it is easier or harder than it was 12 months ago for them to raise capital in Europe.
Overwhelmingly, those founders who raised capital in 2023 reported that it is much tougher for startups to secure funding today compared to twelve months ago, with 76% stating this.
Interestingly, only 52% of the female founders who did not raise any funding in 2023 said it was harder.
In your opinion, is it easier or harder for female (co)founded startups to raise external capital in Europe now than it was 12 months ago?
Female founders only
Notes: 'Raised' includes only European female founders that raised any capital, equity or non-equity, at any time.
2023 is the third largest year for investment in European female-funded companies in the last five years
Despite the challenging fundraising environment, female founders have shown resilience.
In 2023, European female-founded startups raised €5.9 billion in funding.
Even though the total amount of funding dropped in 2023 to €5.9 billion from €8.9 billion in 2022 and €9.5 billion in 2021, the drop is consistent with the overall venture capital slowdown we have seen across the capital markets in 2023.
Capital invested (€B) into female-founded companies, 2019 to 2023
Tap on the bar to reveal the number
Notes:
Source: Dealroom
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Husmus
Sarah Wernér
£119k grant in September
United Kingdom
"In the past, securing a lead investor accelerated the fundraising process, but this year, the pace of getting funded has been slow, even with a lead investor on board.
Investors asked for more substantial proof of the value of our solution, so prioritising customer engagement proved to be a successful strategy for us. By pre-selling our product based on our early MVP, which wasn't perfect but functional, I managed to generate solid traction for my business. Securing customers first was an effective way to build trust and create fundraising momentum."
UK-based companies raised 49% of all capital invested into female-founded companies in Europe in 2023
The UK-based female-founded companies in Europe, raised €2.9 billion, 49% of all capital invested in female-founded companies in 2023.
While the United Kingdom has consistently taken the top spot over the past five years, France, Germany, and Finland have been taking second and third places.
Capital invested (€M) by country into female-founded companies, 2019 to 2023
Tap on a year or a bar to reveal the number
Notes:
Source: Dealroom
40% of all venture capital funds in Europe spent more time seeking investment opportunities into female-founded companies
In general, European venture capital funds are more proactively looking for more investment deals in female-founded companies.
In our survey, 40% of venture capital investors across all stages said that their funds are spending more time today than it was 12 months ago to find more investment opportunities in female-founded companies.
However, 70% of those venture capital investors that are proactive in increasing their female-founder deal flow prioritise their network outreach as oppose to self-organised events, 33%, conferences, 30%, and mentorship programs, 30%, to discover new investment opportunities.
In the past 12 months, has your fund spent more/less time looking for investment opportunities into female (co)founded companies?
VC investors only
What have been the key strategies used by your fund to find more companies (co)founded by women?
VC investors only
Notes: All VC investors surveyed that answered that spend more and significantly more time looking for investment opportunities into female (co)founded companies.
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Founder, The Blood
Miriam Santer
€1m Pre-Seed round in March
Germany
"In 2022, we scaled quite quickly - a big part of the fundraising round we closed in 2022 we invested into research and development.
As a consequence, this year, we have put a lot of focus on bringing our burn rate down and extending our runway. We decided to downsize our team from eight people to four, effectively cutting our team size in half. We also cut down on expenses that were not crucial to our business such as office space, subscriptions and hardware. Today, I think we are in a good space when it comes to our burn rate and we are fundraising!"
Number of European female-founded companies that have received investment drops
1,007 female-founded companies in Europe received investment in 2023, representing a 35% drop in the number of companies backed compared to 2022.
Even when considering historical data from 2019, the number of transactions still reflects a 30% decrease.
Number of female-founded companies that received funding, 2019 to 2023
Tap on a bar to reveal the number
Notes:
Source: Dealroom
The United Kingdom, Germany, France and Spain made the highest number of investments into female-founded companies in 2023
As part of our study, we analysed the number of deal transactions into female-founded companies in Europe over the past five years.
The United Kingdom, France, Germany, and Spain are clear leaders when it comes to the number of transactions, with each of these countries consistently making at least 80 transactions each year.
Number of female-founded companies that received funding per country, 2019 to 2023
Tap on a year or a bar to reveal the exact number
Notes:
Source: Dealroom
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General Partner, Playfair Capital
Chris Smith
United Kingdom
"Over the past twelve months, portfolio companies have been requiring most help in two key areas.
First, transitioning from a Pre-seed/Seed stage company to a Series A one – this is a giant leap in terms of team structure, reporting and board dynamics – our job is to help smooth this during the first 6-12 months post Series A. Second, active fundraising support which means helping create the narrative for the round and then helping with the raise itself. We are also finding ourselves spending more time with founders to help react to market conditions – growth at all cost wasn’t nuanced; today you have to plan and more actively manage growth and runway."
March and September saw the biggest number of funding rounds raised by female founders in Europe
When looking at the distribution of all transactions, March, September, and November saw the largest amount of funding announced for European female-founded companies.
Each of these months saw at least €600 million in transaction value reported.
Total capital invested (€M) into female-founded companies per month, 2023
Tap on the bar to reveal the number
Notes:
Source: Dealroom
The month-on-month distribution of capital invested into female-founded companies in 2023 varies
We have examined the deal distribution of female-founded companies in Europe on a month-to-month basis.
Please select a month to delve deeper into the funding dynamics across 18 countries for a more detailed analysis.
Total capital invested (€M) into female-founded companies per month, per country, 2023
Tap on a bar to reveal the exact amount
Notes:
Source: Dealroom
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Founder, Woba
Malene Madsen
€2.95m Seed round in September
Denmark
"In 2023, getting funding for Woba was tough. To attract investors, we had to show that our business was doing really well especially with the low prices, scale-up companies were being valued at.
Adapting our vision to match the changing market and proving we could grow and be efficient in a competitive field was tricky. To overcome these challenges, Woba focused on growing sustainably and using resources wisely for long-term success."
Number of unique investors that have backed female founders in Europe remains unchanged, even though the geographical distribution varies
1,144 unique European investors participated in at least one investment round of a female-founded company in 2023, while in 2022, there were a total of 1,126 investors that participated.
So, even though the overall distribution of the rounds varies across Europe, the total number of investors backing female founders has remained constant over the past two years despite more challenging fundraising conditions.
Number of unique investors that have participated in at least one investment round of a female-founded company in Europe, 2019 to 2023
Tap on a bar to reveal the exact number
Notes:
Source: Dealroom
The majority of European venture capital investors say that gender does not play a role in their investment decisions
In our survey, we asked venture capital investors whether the gender composition of companies they evaluate plays any role in their investment decisions.
The difference in responses is not significant, with 56% of European venture capital investors stating that gender does not play a role, while just over 43% say that it does.
Does gender composition of a company’s founding team play a role in your investment decisions?
VC investors only
Notes:
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Partner, EQT Ventures
Rania Belkahia
France
"In today's market, investors prioritise internal efficiency over growth. If you're considering fundraising in 2024, your financial metrics, burn rate, and team culture will be the key aspects investors will look at.
Today, success in fundraising, particularly post-Series A, requires even more preparation. More data will bring your story into a tangible reality, so don't underestimate the time needed to develop your materials; a compelling story backed by solid metrics is crucial in today's market. Identify what opportunity your business provides and anchor your fundraise on that. Focus on solving real problems, not just nice-to-haves. Addressing the "why now" amidst market changes is more important than ever. Stay focused and find alternative routes if doors close."
47% decline of €90M+ rounds accounts for 63% of the total €2.9B decline in total funding for female founders in Europe in 2023
The size breakdown of 2023 investment rounds for female founders in Europe clearly indicates that it was the slowdown in investments for rounds of €90M+ that was the primary reason behind the decline in total funding between 2022 and 2023.
Total capital (€B) invested into female-founded companies per stage, 2019 to 2023
Tap on a bar to reveal the exact amount
Notes: Pre-Seed round: < €0.9M, Seed round: €0.9M to < €3.6M, Series A €3.6M to <€13.5M, Series B round: €13.5M to <€36M, Series C round: €36M to <€90M, Mega round €90M to <€225M, Mega Plus round: €225M+.
Source: Dealroom
The number of Pre-Seed deals the most impacted by the investment slowdown 2023
Analysing deal numbers across stages reveals that Pre-Seed stage companies were the hardest hit by the economic downturn, experiencing a 36% reduction in deals.
Meanwhile, the Seed stage remained the most active, showing only a 15% reduction in deal-making.
Total number of investments into female-founded companies per stage, 2019 to 2023
Tap on the bar to reveal the exact number
Notes: Pre-Seed round: < €0.9M, Seed round: €0.9M to < €3.6M, Series A €3.6M to <€13.5M, Series B round: €13.5M to <€36M, Series C round: €36M to <€90M, Mega round €90M to <€225M, Mega Plus round: €225M+.
Source: Dealroom
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General Partner, Planet A Ventures
Lena Thiede
Germany
"I see funds paying closer attention to the composition of founding teams these days.
Today, a very homogeneous team, where everybody looks the same, has the same expertise or comes from the same background, raises question marks. With the enormous challenges we face and the current market volatility, more than ever, we need people around the table who can see things differently, who have complementary mindsets."
70% of venture capital investors say they track the number of female-founded companies going through their investment pipelines
In our survey, we asked venture capital investors whether they track the number of female-founded companies going through their investment pipelines.
Surprisingly, 70% of investors claimed that they do track these companies, reflecting an overall positive sentiment towards monitoring gender diversity across their portfolios.
Does your fund track a number of female-founded companies in its deal flow?
of venture capital investors in Europe say they track the number of female-founded companies going through their investment pipelines.
70%
Notes:
Average size of rounds into female-founded companies in Europe is on the rise
The average size of rounds invested in European female-founded companies is on the rise, with Series C+ rounds experiencing the most significant growth.
Hover over each round to discover the current average round size for female entrepreneurs in Europe.
Average size (€M) of deals into female-founded companies per stage, 2019 to 2023
Tap on a bar to reveal the exact amount
Notes: Pre-Seed round: < €0.9M, Seed round: €0.9M to < €3.6M, Series A €3.6M to <€13.5M, Series B round: €13.5M to <€36M, Series C round: €36M to <€90M, Mega round €90M to <€225M, Mega Plus round: €225M+.
Source: Dealroom
Founder, Tilebox
Laura Costa
$1.7m Pre-Seed round in August
Austria
"For 2024, our strategy is to leverage the momentum we've built using the resources we now have.
Our company happens to be anti-cyclical – pre-seed and seed rounds do not require large amounts of capital, so the macroeconomic climate does not impact us much at this point."
The average round size significantly differs across Europe.
Average deal sizes for female-founded startups can vary significantly by country.
It should be noted that on an annual basis, many ecosystems have only a small number of funding rounds at a given stage for women-founded startups.
Average size of investment into companies (co)founded by women per stage, 2019 to 2023
Tap on the bar to reveal the amount
Notes: 18 countries in scope.