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Less than 10% of UK deep tech companies founded by women, report reveals

Written by Mon 18 Dec 2023

A report by the Royal Academy of Engineering found that just 7.5% of UK deep tech companies are founded by all-female teams.

The State of UK Deep Tech report revealed that among the 3,462 companies focused on emerging technologies, over 77% have all-male founding teams.

The Royal Academy of Engineering said the definition of deep tech varies. They define it as technologies grounded in innovative engineering and cutting-edge scientific advances.

The inaugural report on the national deep tech ecosystem also found that the deep tech sector has a more pronounced gender disparity than the wider high-growth ecosystem.

The Royal Academy of Engineering attributed part of this inequality to the low proportion of women studying STEM subjects in the UK. The Academy noted that this has increased in recent years and may improve the gender diversity of deep tech founders in the coming years.

“I am committed to boosting STEM uptake among people from all backgrounds, to ensure everyone can fulfil their potential as we build a highly skilled workforce in the industries of the future,” said Michelle Donelan, Secretary of State for Science, Innovation and Technology.

The Academy also suggested these findings reflect investor attitudes and the need for more robust support for women entrepreneurs.

The Director of the Royal Academy of Engineering’s Enterprise Hub, Ana Avaliani agreed with this sentiment. She said the report underlines the important work still to be done to support deep tech founders and grow their companies in the UK.

“It is also vital for a more successful, inclusive ecosystem that the gender imbalance in deep tech leadership is addressed and that leadership diversity in deep tech enterprises is championed,” added Avaliani.

Funding Continues to Challenge UK Deep Tech

The report found that following high levels of investment, recent investment activity has slowed. The total number of deals secured has decreased from a peak of 1,194 in 2021 to 1,181 in 2022. 

The report revealed that more than half (50.5%) of deep tech companies are in the seed stage, while active scaleups constitute less than 6% of the total in the UK. 

The Academy said that this finding underscored the pressing need to enhance funding accessibility to facilitate the upscaling of early-stage deep tech firms. This will also contribute to fostering a more competitive UK ecosystem.

Deep tech companies attracted a total of £5.22 billion ($6.6 billion) in 2022. However, the number of deals secured by deep tech companies decreased from 1,194 in 2021 to 1,181 in 2022. This was attributed to an increasingly complex funding environment.

In the last ten years, 34 of the UK’s deep tech companies have listed on a stock exchange, including 15 academic spinouts. Tech companies have largely listed on UK-based exchanges such as the London Stock Exchange or Alternative Investment Market. However, 10 of them floated on the US-based NASDAQ Stock Market.

UK and AI Tops Findings

The Academy report also revealed that clean tech and artificial intelligence (AI) topped the UK deep tech scene, with clean tech leading at 517 companies and AI closely followed by 504 companies.

Enterprise Committee Member and EXPLORE Chair at the Royal Academy of Engineering, Mike Carr, said AI represents a major opportunity for deep tech development in the UK, with more than 500 AI-based companies established.

“AI is already revolutionising whole industries, from drug discovery to manufacturing, by helping to optimise processes and accelerate innovation,” said Carr.

Last month, a survey by accounting company, RSM UK, found that London remains the most popular place to list an initial public offering (IPO) globally among UK tech businesses.

In August, big tech companies said they were considering leaving the UK due in part to increasing regulations. Companies like Signal and WhatsApp have warned that they will leave the UK rather than submit to a requirement to weaken encryption.

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Written by Mon 18 Dec 2023

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