Posted: Fri 12th May 2023
The proportion of UK entrepreneurs who are female has increased, but women are still much less likely to access business funding, new detailed analysis of company data has revealed.
Women-run businesses now account for 17.3% of all UK companies, up by 0.5% from 16.8% in 2022, according to the latest edition of the Gender Index.
The report, based on analysis of 4.5m active incorporated companies by data analytics platform mnAi, said although the figure remains three and a half times smaller than the 2.7 million male-led companies, "it is highly significant growth given the increase has come during a very challenging time, post-Covid and amid tough economic conditions".
Funding for female entrepreneurs
Accessing funding is consistently a challenge for many female founders and the study showed some progress with the number of female-led companies securing external capital rising 14.8%.
However, of all active female-led companies, less than a quarter accessed finance in 2022/23, and male-led companies captured seven times more funding than females, averaging 70% of total funding in the period between 2021/22 and 2022/23.
The majority of female founders who got funding are in the younger age groups of Generation Z and millennials, the report found, while there was a 1% increase in female ethnic minority-led companies, rising from 19.2% in 2021/22 to to 19.3% in 2022/23.
Jill Pay, chairman of The Gender Index, said:
"For the second successive year, The Gender Index has shown an increase in the number of women across the four nations that are setting up companies, which is a further step in the right direction in boosting female entrepreneurship across the UK.
"More young women and ethnic minorities are raising external capital and running female-led companies than ever before, reflecting our belief that everyone regardless of age, race or gender should not face barriers to starting a business.
"We recognise that while inspirational women are accessing external capital and leading fastgrowth companies, we will not rest until every female-led company can do the same."
Female founders across the UK
When it comes to overall volume of female-founded businesses in the UK nations, England had 714,000, Scotland had 36,210 and Wales had 22,900.
Northern Ireland had the lowest share of female-led companies at 13.6%, compared to the UK average of 17.3%, although it also had the highest proportion of female-led, ethnic minority-owned companies at 20.5%.
The report highlighted a North-South divide among the regions with funding and the number of women-led companies being predominately located in the South East. London had the highest proportion of female-led companies (18.6%) and outstripped other regions securing 31.4% and 32.7% of total funding over the two years, followed by the South East at 15.3% and 13.6% respectively.
John Cushing, CEO of mnAi said:
"This research highlights the ongoing challenges for female-led companies accessing external capital.
"While it is clear from our data that there is still a long way to go, we look forward to seeing what other trends emerge over the coming year as we continue to push for positive change through data."
The access to finance issue for female entrepreneurs has been highlighted by several other reports.
Beauhurst found that only 16% of equity investment went to high-growth companies with at least one female founder in 2022, and less than 2p in every £1 invested was secured by all-female founding teams, compared to 85p for all-male founding teams.
In addition, a poll of women entrepreneurs found that the majority believed they have likely faced sexism when looking for business funding.