Female founders in the UK have been given a major boost in the form of a new, £250m investment pool that aims to close the gender funding gap.
The government-backed Invest in Women Taskforce announced the new funding on Monday. The Taskforce was created in March this year, with a mission to be one of the world’s largest grant providers for businesses with at least one female founder.
Named the ‘Women Backing Women’ fund, large banks and investors including Barclays and Aviva have committed to financing the organisation. However, the Taskforce has stated that the money will be deployed specifically by female “investment decision-makers”.
In September, Innovate UK — part of UK Research and Innovation — caused fury after it delivered just half of the 50 grants it had previously promised for women business owners.
“Female entrepreneurs sidelined for too long”
In all, Barclays, M&G, the British Business Bank, Morgan Stanley, Visa Foundation, BGF and Aviva have committed to invest in female founded businesses either directly or via the Women Backing Women fund organised by the Taskforce.
With £250m pledged for the pot so far, the fund represents one of the largest globally that’s specifically designed for women founders. Women entrepreneurs looking for funding are now being encouraged to find out what opportunities are available via the Taskforce website.
Debbie Wosskow, 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.”
Reeves: “I want to improve life for women across the UK”
Despite more women starting businesses, the amount of funding awarded to women founders remains significantly lower than men. Startups data has shown that male-founded startups secure nearly six times more funding, on average, than female counterparts.
The gender funding gap is also worsening, even in female-dominated sectors like femtech. In the first half of 2024, data from the Taskforce revealed that all-female founded businesses received just 1.8% of the total value of equity investment. This is down from 2.5% in 2023.
The Invest in Women Taskforce is the successor to the Rose Review, an independent review of female entrepreneurship. The review has estimated that a £250bn boost could be added to the UK economy if women were able to scale their businesses at the same rate as men.
This is one reason why support for women in business has become a priority for Chancellor Rachel Reeves, herself the first woman Chancellor in the role’s more than 800-year history.
Commenting on the government backing of the Taskforce in September, Reeves said: “It is a huge responsibility to sit in the Treasury as the first female Chancellor of the Exchequer and be able to use my position to improve life for women across the UK.
“By backing the [Taskforce] we can establish one of the world’s largest dedicated investment funding pools for female-powered businesses, helping grow our economy.”
Innovate UK row
To support the rollout, the Invest in Women Taskforce is now calling for fund managers to help manage the Women Backing Women fund.
However, the money will apparently be allocated by female decision-makers. According to a press release, this is in recognition that “female investors are twice as likely to invest in female-led and mixed businesses”.
In September, Innovate UK – which is a non-departmental public body – caused controversy after it emerged it had awarded just half of the 50 grants in its ‘Women In Innovation’ funding competition for women entrepreneurs.
The organisation said it had “up to £4m” in funding available to give to the winning entrants. But despite receiving thousands of entries, only £2m was awarded. The organisation was forced to U-turn following a vocal campaign led by female founders on LinkedIn.
At the time, male CEO Indro Mukerjee, who has now left the organisation, said “more must be done”. The government may now be hoping that the new female-led Taskforce can rectify what one founder decried as “man made virtue signalling” by Innovate UK.
