Europe’s startup sector has a “shocking” lack of diversity, with 93% of all funds raised in 2018 going to all-male founding teams, according to a report by the investment firm Atomico.
Out of 175 large startups included in the survey, just one had a female chief technology officer, only 6% had a female chief executive, and even the roles most often held by women--chief marketing officer and chief financial officer--were held by men 80% of the time.
Once funding is allocated, the divide is even more stark: while 85% of deals involve all-male founding teams, they receive 93% of the money invested. All-female founding teams receive just 2% – and the figures have barely changed in the past five years. In 2012 all-male teams received 92% of all the capital invested.
Niklas Zennström, the Swedish billionaire who founded Atomico after selling his previous companies Skype and Kazaa, said the investment community needed to lead the change.
“Europe’s VC [venture capital] industry is missing out on returns because we are lacking in diversity,” Zennström said. “Startups are missing out on performance because they lack diversity. That means both diversity in our teams and the founders that we back. This means diversity not just of gender, but in terms of background, race, ethnicity, physical and cognitive differences. The entire ecosystem as a whole needs to challenge itself to make concrete commitments and change.”
Lack of self-awareness
But there is evidence that the sector lacks the self-awareness to make the change. Almost half those polled believed the tech industry was “inclusive”--a figure driven by the belief of male respondents, since the women asked were far less likely to respond positively. Across the whole industry, 46% of women polled said they had experienced discrimination.
The report uncovered less data on other types of discrimination, but did find that more than half of black, African or Caribbean respondents said they had experienced discrimination based on their ethnicity. The lack of data is in part down to the small sample size of many minority ethnic groups--a point that “tells a story of its own,” the report noted.
Tom Wehmeier, a partner and head of research at Atomico, said “This year after a lot of talk about diversity in tech, we wanted our report to measure the problem to ensure we are offering data, not just opinion. The results are worrying, both on a moral level and because they suggest that European tech is afflicted by a significant diversity debt.”
The findings come a month after another report, from the agency Inclusive Boards, found a similar lack of diversity amongst Britain’s largest 500 tech firms. Just 8.5% of senior leaders in technology are from a minority background, the report showed, while women make up only 12.6% of board members in the sector.
“The figures are particularly worrying when you consider how important the tech sector is,” Samuel Kasumu, the director of Inclusive Boards, told the Guardian. “So it’s very, very dangerous and alarming to see that particular groups are not being able to fully participate in the sector, and in a sense are being left behind.”
By Alex Hern