The FinTech industry has seen exponential growth over the past decade, and with a current global market value of $245bn that is projected to reach over $1.5tn by 2030, huge opportunity remains. Yet, within this rapidly growing sector, female founders still face notable disparities, particularly in securing venture capital funding. In 2022, less than 10% of the UK’s FinTech funding was allocated to female-led startups, a figure that underscores deep-rooted biases and the need for change.
Unfortunately, this issue is evident across the technology landscape as a whole and is nothing new: we are all too familiar with the telling statistic of female founders routinely receiving less than 2% share of venture investments made in a year. In 2023, the British Business Bank reported that for every £1 of VC investment, only one penny goes to female-led teams, even though women-founded businesses have been shown to yield higher revenue-per-dollar invested compared to male-led firms.
Gender Diversity Powers Performance
Venture capital’s gender funding inequity continues to inhibit FinTech’s full potential and risks denying women of financial products and services that are well needed in the world where women have long been neglected. Traditional financial services historically catered to male-dominated narratives, leaving many women underserved, financially uninformed or lacking confidence about financial decisions. This goes beyond the influence of male narratives; the lack of gender diversity in financial services has led to products not fully addressing or supporting the unique financial needs of women. Female-founded FinTechs have the potential to address these gaps with products and services that are more inclusive, intuitive and user-friendly for a broader audience.
That is not to say that the opportunity for women founders in fintech lies solely in catering to female products or services. Female entrepreneurs’ distinct perspectives are essential to drive FinTech’s innovation to what we call ‘FinTech 3.0’ (check our our last article to learn more about FinTech 3.0).
One prime example is Starling Bank, a UK-based digital bank founded by Anne Boden. Starling Bank’s commitment to inclusive banking and financial literacy has earned it a loyal customer base that includes a significant proportion of women. Boden’s vision for a fully digital, transparent banking experience was instrumental in helping the company reach profitability—a milestone that many traditional banks struggle to achieve even today. Similarly, companies like PensionBee, GoHenry, Gaia and Juno illustrate how women founders are not only breaking barriers but also addressing market needs often overlooked by male-led companies.
Gender diversity is also a powerful driver of performance. According to a Mckinsey report, companies with higher gender diversity on their executive teams were 21% more likely to outperform in profitability. In FinTech, where customer trust and financial transparency are paramount, female leaders bring collaborative, empathetic and innovative approaches, making them uniquely effective in building customer trust. The ScaleUp Institute also reports that female-led FinTechs in 2023 invested an average of 38% of their raised capital into research and development, a figure substantially higher than their male-led peers, signalling a long-term approach to growth and sustainability.
Additionally, from a macro-economic standpoint, the UK economy could experience significant gains if the funding landscape for female founders was more balanced. A report from the Rose Review of Female Entrepreneurship estimates that closing the gender gap in entrepreneurship could add as much as £250 billion to the UK economy.
Levelling the Playing Field
Inclusive Investment Practices
Key stakeholders including VCs, accelerators and industry associations need to foster investment strategies that prioritise diversity and transparency. The Venture landscape is seeing the rise of positive Initiatives like the Investing in Women Code, which commits VCs to provide data on their investment practices. Yet much more needs to be done by way of funds actively seeking out female-led FinTechs, providing mentorship, resources and capital to encourage early-stage growth.
Strengthening Policy and Regulatory Support
Legislative measures can provide incentives for gender-diverse hiring, support regional hubs and encourage financial literacy programs specifically targeting underrepresented demographics. There’s an urgent need for policy interventions that level the playing field for female founders, particularly in FinTech where product innovation directly impacts consumer financial well-being.
Encouraging Cultural Change Within VC Firms
Many VC firms are now beginning to recognise the value of diversity within their own ranks. A diverse investment team is more likely to evaluate female-led businesses without bias, fostering a more inclusive approach to venture capital. VC firms should prioritise hiring women and people from diverse backgrounds, particularly in roles that directly engage with startups. Over time, this cultural shift could significantly impact funding decisions and ultimately lead to a more balanced industry.
Regional Disparities and the Need for a UK-Wide Approach
London receives the lion’s share of FinTech funding in the UK, yet, nearly 70% of female-led FinTechs are based outside London, as reported by the ScaleUp Institute. This disparity highlights an opportunity to decentralise funding and focus on regional hubs where women-led startups are actively scaling, including emerging clusters in Manchester, Leeds and Edinburgh. Building a more geographically balanced investment approach could unlock untapped potential within these regions, fostering a more resilient and inclusive FinTech ecosystem.
Fostering Industry-Wide Collaboration
Events like our Women in FinTech event, offer valuable networking opportunities that help female founders gain visibility among investors and industry peers. By expanding these platforms and creating regular industry dialogues, we can forge a community that actively supports women-led businesses. Additionally, collaborative efforts across public and private sectors, such as joint accelerator programs for female founders, can also help bridge gaps in resources and funding.
Get Involved
Alice Knibbs (investor at Love Ventures) and Valerie Aelbrecht (co-founder of JV Network & investor at AlbionVC) are excited to co-host a Women in FinTech event today, October 30th. We’ve invited a small number of female FinTech founders we’ve met and are excited to meet some of the most active female investors at reputable early-stage FinTech funds, and participate in a ‘get to know me’ pitch style networking & support event. These are VCs we know well and/or have co-invested with – a great opportunity to network with aligned investors and other FinTech operators.
