The women behind fintechs still face discrimination when seeking investment, despite the issue being an industry talking point for years, according to figures from a UK fintech industry body.
Innovate Finance’s numbers, which revealed UK fintech investment dropped by double the global figure, also unearthed the worrying detail that investment in fintechs led by women dropped by twice as much as the UK average.
Innovate Finance reported that women-led fintechs experienced a sharp decline in investment of 78%, more than double the 37% market-wide fall, which it said underscores “the need for more inclusive funding practices”.
Total investment in fintechs founded by women, according to innovate finance, was just under £100m, about 3.3% of the total.
Things have hardly progressed since 2018 when previous reports from the organisation are compared. In 2019, Innovate Finance’s report on UK fintech investment found that only 3% of the total venture capitalist investment of £2.61bn went to women-led companies.
Back in 2019, Charlotte Crosswell, then CEO at Innovative Finance, said: “There’s absolutely no reason why that is, apart from the fact that a lot of venture capitalists don’t have women on the investment team.”
The percentage increase in women-led fintechs’ share of total investment in 2024, compared to 2018, is a mere 0.3%.
Maria Scott, founder and CEO of Taina Technology, which helps financial services companies meet their tax regulatory requirements through automation technology, said female founders “are pretty used to funding stats looking bleak, despite the fact that on average, they prove to be better financial investments”.
She said this does little to encourage more female founders and investors coming through. “We need more role models and success stories to encourage women,” she said.
Scott said that over the past year, there may have been another factor at play as well. “Female founders by nature tend to be very careful and thoughtful with their cash management,” she said. “It is possible that whilst the funding environment has been tough, they did not go to the market for funding as they might have had a good cushion allowing them to wait until the market picks back up again.”
Innovate Finance said female fintech founders in the UK still face “significant barriers” in securing the funds needed to grow their businesses.
“Overcoming these challenges requires a concerted effort from investors and the broader fintech ecosystem to provide equal opportunities and support innovation from diverse leadership teams,” it said.
Nina Foote, partner and head of growth at venture capital firm Volution, said that despite “growing awareness and targeted efforts”, female fintech founders continue to face significant challenges.
“Efforts to enhance diversity and innovation are promising, but not enough: more needs to be done to provide women with the necessary networks and capital to scale,” she said. “Leaders like Anne Boden, Anna Maj and Meri Williams are pivotal in driving transformation, serving as role models who inspire and shape the future of fintech for female entrepreneurs – but our male allies are also vital in supporting and enhancing these initiatives.”