Ninety-three per cent of all funds raised by European venture capital-backed tech companies went to those with all-male founding teams, according to a new report.
The 2018 State of European Tech report by international technology investment firm Atomico is based on a survey of 5,000 people working in the industry. It also found that companies with all-male founders account for 85% of funding deals made, that companies with all-female founders received just 2% of funds and that 46% of women in the European tech sector say they have experienced discrimination.
Women accounted for just 22% of participants in tech-related Meetup events in the region and the report notes a failure to make any meaningful progress on women’s participation in tech events, having seen an increase of just a single percentage point in the level of female participation at European tech community events in the past two years. It notes that there has been no improvement in the number of female founders and senior leaders in VC-funded tech companies in the last year.
The report also notes a lack of interest in diversity and inclusion from media reporting on the industry compared to other topics. It says news articles related to diversity and inclusion that are classified with a negative sentiment drive 42% of all social engagement around the topic as a whole, despite those same stories accounting for just 11% of everything written on the topic.
Nevertheless, when asked if having a diverse team is a benefit to company performance, almost 90% of respondents agreed. Moreover, the majority of men think the industry is inclusive, compared to only 38% of women. Although many companies provide flexible working and have parental leave policies – particularly the larger ones – the report notes that, on their own these are not sufficient. It further notes that a large percentage of companies, especially smaller ones, have not yet implemented an overall diversity and inclusion policy.
Check Warner, founder of Diversity VC, said: “Lack of diversity is driven by a combination of factors that affect the pipeline of talent in STEM subjects, the availability of diverse role models, access to expertise and capital, social mobility and a range of other issues. Europe is not necessarily tangibly better or worse than other tech hubs – however, given that Europe is such a diverse range of geographies and people this should be a key strength. I am encouraged to see the subject of diversity and inclusion appear on the agenda of more tech companies and more VCs over the last 12 months and to see so many funds participating in initiatives led by Diversity VC and others. I hope that this translates to sustained and impactful change – the first step though is understanding the situation as it is today.”
The report also shows how the tech industry is booming in Europe. It says that record sums were invested in European technology ecosystem- $23bn in 2018 up from just $5bn in 2013. It also shows Europe’s tech (software) industry is growing five times faster than the rest of the European economy in terms of Gross Value Added, a level that has accelerated in recent years. The European tech workforce grew 4% in 2018, a significant difference to overall EU employment growth of 1.1%, says the report.