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Posted: Mon 25th Nov 2024
A taskforce set up by the government to boost the amount of funding that goes to female business owners has announced that five organisations have committed to invest £255 million in women entrepreneurs.
The Invest in Women Taskforce said Barclays, M&G, British Business Bank and Aviva will each invest £50 million, BGF and Morgan Stanley will contribute £25 million and Visa Foundation has pledged £5 million.
They will invest the money directly themselves or through the new 'Women backing Women' fund in businesses which have at least one female founder, or where the most senior executive position is held by a female.
With research showing that female investors are twice as likely to invest in female-led and mixed businesses, the taskforce said the money will be deployed via "female investment decision-makers across the UK".
Originally set up by the previous Conservative government, the creation of the Invest in Women Taskforce follows multiple data which shows women get significantly less business funding than men.
All-female founded businesses in the UK received only 1.8% (£145 million) of the total value of equity investment in the first half of 2024, a fall from 2.5% in 2023.
In addition, a poll of 100 female entrepreneurs found 85% believed that had likely faced sexism when , and a report by the Rose Review in 2019 found if women started and scaled businesses at the same rate as men, it would deliver a potential £250 billion boost to the UK economy.
Debbie Wosskow, multi-exit entrepreneur and co-chair of the Invest in Women Taskforce, said:
"Female entrepreneurs and investors have been sidelined for too long. They are two sides of the same coin. It's time we rebooted the system and gave female investors the power to drive change, and funds like the 'Women backing Women' fund is how we do it.
"I'm thrilled that investors from both the public and private sector have joined us and recognise the enormous opportunity here, but this is only the beginning, we need more investors to come aboard and join us on this journey."
Hannah Bernard, head of business banking at Barclays and co-chair of the Invest in Women Taskforce, added:
"Our funding partners not only recognise the moral imperative to drive systemic change for female investors and founders, they recognise that this also makes strong commercial sense.
"Studies show that female-led businesses generate 35% higher returns than male-led businesses. The 'Invest in Women' funding pool is about changing the landscape of investment. I'm incredibly excited about what's to come."
The investment and the fund manager selection process for the Women Backing Women fund will be officially launched during an event at Mansion House in London on Monday evening.
Enterprise Nation founder Emma Jones, who will attend the event, said:
"This is a huge achievement. Backing female entrepreneurs is not just a question of redressing the balance, it's about investing in more diverse and innovative businesses with enormous potential.
"We know from our own research that women are less likely to look for funding - a business protection sentiment that particularly applies to female founders and this initiative could help to turn the dial to change things for the better.
"Our research also found we need to do more to help women to understand the benefits of taking on finance at an earlier stage, building ambitiously in order to create more flexibility and a better work/life balance further down the line.
"This is about working on financial forecasts to see that positive impact that taking on investment can bring."
Ahead of the event, chancellor Rachel Reeves said:
"We all, including myself as the first female chancellor, have a responsibility to make the economy work better for women.
"Initiatives like the Invest in Women Taskforce funding pool are a fantastic example of the public and private sectors working together to help unlock the potential of female founders and seize opportunities to fire up the government's number one mission of economic growth."
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