Women are being left behind as only three percent of venture capital (VC) funded AI start-ups are female founded, according to new research published by the Alan Turing Institute today (4 October).
The report, entitled Rebalancing Innovation: Women, AI and Venture Capital in the UK, portrays a striking gender imbalance within AI start-ups throughout 2012-2022.
Within the decade studied, over 80% of total capital invested by VCs in AI was raised by all-male teams, whilst only 0.3% of capital was invested into companies with all-female teams.
The 3% of female founded AI start-ups receiving VC funding are also more likely to receive less value per deals than male founded counterparts.
Chief analyst at GlobalData Rena Bhattacharyya reflects on this disparity.
“I am sure this is a reflection of the technology industry as a whole and is not a trend specific to AI,” Bhattacharyya stated, “That being said, I do see things changing. I see more and more women at the tech events I attend, including those focused on AI.”
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Research by Tech Returners found that a lack of confidence was cited by nearly 100% of women interviewed in its study as the biggest barrier to a career in technology.
Dr Erin Young, research fellow and project co-lead at the Alan Turing Institute, explains why societal and gender expectations that harm women’s entry to tech may also impact the VC funding women receive.
“Many of the same structural factors that shape gender disparity in the AI workforce may also cause gender gaps in VC investment,” Young told Verdict, “Industry culture – which includes recruitment and promotion processes, and stereotypes around masculinity and technical and financial skillsets – can feel unwelcoming towards women.”
Young states that many people credit the lack of women’s representation in tech down to the lower enrolment rates of women in STEM within higher education, however Young believes that this view shifts the obligation to change back onto women.
“Having an entrepreneurship background is desirable for working in venture capital,” she continued, “but as our research found, fewer women entrepreneurs are being funded, which may create a cycle where women are more likely to be overlooked.”
“Venture capitalists tend to invest in companies that reflect their own value systems, networks and backgrounds,” Young concluded.
The process of re-centring women into AI may be a long-term process, however, warns Rena Bhattacharyya.
A huge skills gap is facing AI, stated Bhattacharyya, a problem which will only be compounded by a lack of female employees and founders within the sector.
Supporting female founded AI start-ups not only levels the playing field, but also supports a “underutilised talent pool” states Bhattacharyya.