Funding for female-founded start-ups falls to 6%, data shows

Funding for female founders of tech start-ups in the Republic stagnated during the first half of the year even as there was a surge in investment levels overall.

New figures compiled by the not-for-profit organisation TechIreland show that funding for companies with female founders fell from 11 per cent to just 6 per cent of total investments secured.

Female-founded companies raised €59.3 million during the six months under review, down slightly on the €60 million for the same period a year earlier. The number of companies led by women to receive funding did increase by more than 25 per cent to 20 versus the first half of 2019. However, the overall share of funding secured by such start-ups was down significantly.

Elaine Coughlan, managing partner at the venture capital firm Atlantic Bridge, said there is no doubt the pandemic has set back the diversity agenda.

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“It’s imperative that we keep the pressure up to support female-led companies,” she said.

TechIreland’s data shows overall investment in Irish tech companies reached a record €932 million in the January to June period. The 10 largest investments accounted for 70 per cent of the figure.

There was an increase in the number of early stage rounds, with 35 companies raising €1 million-€5 million, as against 26 for the first half of 2020. Another 40 companies raised less than €1 million, up from 25 last year.

However, in line with the Irish Venture Capital Association’s recent report, early stage rounds in the second quarter fell sharply after a strong opening to the year.

The healthtech sector accounted for €439 million of total funds raised, up 80 per cent on the same period in 2020. Fintech companies raised a further €205 million.

“While the overall numbers are good, we aren’t keeping up with the huge increase in European tech funding. Ireland’s share for the first half of the year has actually dropped from 3.5 per cent to just 1.8 per cent,” John O’Dea, chief executive of TechIreland said.