According to the Alan Turing Institute’s women in data science and AI team, startups with female founders account for less than three per cent of all venture capital (VC) funding deals involving AI.
In a new report, Rebalancing Innovation, Women, AI And Venture Capital in the UK, the Institute points to a need for more diversity in AI investment by UK VC firms.
The research covers the past decade of investment, between 2012 and 2022, and indicates that in that time, 80 per cent of capital raised went to all-male founding teams, while all-female teams received 0.3 per cent of VC investment.
Not only did female founders see fewer deals, they also received smaller capital offers.
On average, female-founded AI start-ups received £1.3 million per deal, compared to an £8.6 million deal average for all-male teams.
Only five per cent of VC firms that participated in funding deals for AI firms have equal or majority representation of female decision makers which might have something to do with it.
Alan Turing Institute research fellow and project co-lead Dr Erin Young said “Making sure more female-founded AI companies receive investment is crucial for encouraging responsible AI and fostering innovation. One can only imagine what technical products and services might have been invented if women had equal participation in the VC and entrepreneurial ecosystem.
“We hope that our report offers a crucial starting point for these conversations.”
