Female-led tech startups are building increasingly valuable businesses and attracting regional policy attention, yet they continue to face structural barriers when seeking venture capital at scale. This disconnect between business performance and funding access has become more pronounced even as investment dollars flow back into tech ecosystems following pandemic disruptions.
In South Yorkshire, a new initiative called FoundHERy launched this year to directly address the funding gap. The programme targets female tech founders across startup, early growth, and scaling stages with eight-week intensive support, investor networking, and pitch preparation. The initiative follows data showing that female-founded businesses in the region are now valued at an estimated £198 million, up from £34.8 million in 2020. Notably, these businesses average £6 million in valuation each, compared to £3.5 million for male-only founded firms, suggesting female entrepreneurs generate stronger valuations when they do secure capital.
“Female founders are a powerful driver of growth, new jobs and businesses of the future,” said Science and Technology Secretary Liz Kendall in support of the programme. The initiative received co-funding from the Department of Science, Innovation and Technology through Barnsley’s status as the UK’s first Tech Town, alongside backing from the British Business Bank.
The regional push comes as broader venture capital data reveals a troubling reversal for female-led firms. In New York City, venture deals for women-led companies declined by more than 50 percent through the first eight months of 2024, with only 87 investments raising $350 million, according to analysis by Wells Fargo and Pitchbook. This occurred even as overall venture capital investment in the city rebounded strongly, exceeding $20 billion and surpassing 2023 totals by $3 billion.
“There is a lot of money coming to New York City but it is not trickling down to women and minority founders,” explained Kimberly Gray, founder of Uvii, a female-led edtech startup developing AI-powered solutions for government contracting. Despite completing the city’s founder fellowship programme and winning a spot as a Google startup, Gray described the challenge of raising $3 million as formidable in an environment where female founders outperform on most metrics but struggle with funding access.
This pattern reflects what venture capital researchers describe as a cyclical industry dynamic. When overall investment declines, female-owned companies are first to lose funding and last to benefit from rebounds. According to Geri Stengel, head of Ventureneer, a firm focused on helping women raise capital, this represents “a longstanding structural change effort” affecting groups historically excluded from economic growth.
Policy interventions like FoundHERy attempt to bridge the gap through direct support and visibility. The New York City Economic Development Corporation, for instance, has run a founder fellowship programme that has supported more than 250 founders across 168 startups, with two-thirds including female founders. The city also established the Venture Access Alliance, now comprising more than 100 members working to improve founder access to capital.
Beyond startup capital, broader financial inclusion trends are creating new opportunities for women entrepreneurs. Digital financial services adoption surged during the pandemic, narrowing the gender gap in account ownership from nine to six percentage points in developing countries. Two-thirds of adults worldwide now make or receive digital payments, and in developing economies, adults who receive payments into accounts are significantly more likely to use additional financial services like saving, borrowing, and credit access.
At the continental level, the African Development Bank is integrating gender considerations into climate finance initiatives, recognizing that women in Africa face disproportionate climate impacts. The Bank’s portfolio includes support for women-led renewable energy enterprises and climate-smart agriculture programmes targeting female farmers, alongside capacity-building workshops on gender and climate finance. These efforts underscore how financial infrastructure and targeted support can expand opportunity for female entrepreneurs across sectors and geographies.
Yet the data suggests regional policy action alone will not resolve the structural funding imbalance. Female-founded startups reached a record 15.4 percent of U.S. venture funding in the first half of 2024, but this still leaves them vastly underrepresented relative to their share of the founder population and their demonstrated business performance. Median deal sizes for female-led companies remain smaller, and exit rates lag behind peer groups, indicating persistent investor skepticism or reduced access to growth-stage capital.
Advocates argue that closing this gap requires sustained institutional change beyond pilot programmes. South Yorkshire Mayor Oliver Coppard framed the FoundHERy launch as part of a broader regional economic strategy, noting that excluding talented female founders “holds our whole economy back.” The sentiment reflects emerging consensus that the funding gap is not a women-specific problem but an economic inefficiency with material consequences for regional and national growth.
As digital infrastructure expands and policy makers increasingly acknowledge the structural barriers, regional tech ecosystems are experimenting with new support models. Whether these interventions prove sufficient to shift venture capital behaviour at scale remains an open question. For now, female founders in growth markets face a paradox: building more valuable businesses while accessing less capital to scale them.
Source material included COVID-19 Boosted the Adoption of Digital Financial Services.
