Venture capitalists are reluctant to back fintech startups founded by women, research by Innovate Finance has suggested.
While more than £40 million was invested in UK fintechs last year, only 3% of the total investment was granted to companies with female founders.
Innovate Finance’s report also found that of 261 deals in the UK last year, just 17 had at least one female founder or co-founder, equating to 6% of the total.
The report findings, Innovate Finance said, “emphasise the strong need for greater diversity and fairer access to investment”.
The organisation added: “More needs to be done to ensure the sector has access to the widest pool of talent and capital to grow sustainably and inclusively in the future, and across the entire UK economy.”
While prospects for female founders aren’t positive, overall investment in the UK fintech sector rose by 18% to $3.3 billion (£2.5 billion) in 2018.
Growth private equity investment also increased by 57% to $1.6 billion (£1.2 billion), while venture capital dipped slightly to around $1.7 billion (£1.32 billion).
The UK also maintained its position as a world leader in this sector, the report acknowledged, ranking third in VC investment behind China and the US.
Commenting on the findings, Charlotte Crosswell, CEO of Innovate Finance, said: “It is very encouraging to see that investment continues to grow in the UK fintech sector, reaffirming its position as a leading global financial and technology centre.
“The UK has a unique position across financial services, technological innovation, regulators and government which all play a crucial role in this impressive growth journey. However, we should not be complacent as new challenges lie ahead.”
A lack of venture capital investment for female founders is not restricted to the fintech sector, though. Last week, figures revealed that the funding landscape across the board in Britain’s technology sector is disadvantageous to female founders.
Female-led startups receive just one penny for every £1 invested in the UK, according to a report published by DC Ventures and the British Venture Capital Association (BCVA). Of the UK’s available capital, female-founded teams received less than 1% of investment in 2018, while 89% is invested in male founder teams.
This lack of investment means female founders and entrepreneurs across the UK are missing out on billions of pounds in funding every year.