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01

Key Findings

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02

The State of European Tech 2019

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03

Investments

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04

Investors

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05

Diversity & Inclusion

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06

People

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Purpose

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08

Places

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09

Policy

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10

About

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Appendix

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State of D&I in European Tech

Our survey polled over 1,200 European tech founders and asked them to self-identify based on a number of characteristics, including gender, ethnicity, education and their financial status prior to founding their company. We also asked these founders to share whether they had raised external funding or whether they had bootstrapped their companies. While this data set has limitations, it provides an interesting insight into who Europe's founders are and who's raised funding. Based on this data, 21% of all founders who responded are women, though they make up only 15% of founder respondents who have raised external capital.

Share of founder respondents (%) who have raised external funding by self-identified gender

Source:

Legend

  • All founders
  • Already raised external capital
  • Bootstrapped to date
Note:
Share of founders who reported having already raised external capital (of any amount) versus reporting having bootstrapped their companies. Excludes founders who responded 'Other'. Founder respondents only. Numbers may not add to 100 due to rounding.

If we look at the composition of the founder respondents based on self-reported ethnicity, we found that 84% of all founders identified as White/Caucasian. Only 0.9% of all founder respondents self-identified as Black/African/Caribbean, and those respondents made up only 0.5% of all founders who have raised external capital.

Share of founder respondents (%) who have raised external funding by self-identified ethnicity

Source:

Legend

  • All founders
  • Already raised external capital
  • Bootstrapped to date
Note:
Share of founders who reported having already raised external capital (of any amount) versus reporting having bootstrapped their companies. Excludes founders who responded 'Other'. Founder respondents only. Numbers may not add to 100 due to rounding.

If we look at the highest educational attainment of the founder respondents to the survey, 82.3% of all founders reported having a university education (bachelor's degree or higher), compared to just 35% of the EU-28 population aged 25-54 who have attained tertiary education or higher, according to Eurostat. Examining the share of founders who have raised external capital or are bootstrapped, there are observed differences between founders who have a university education or not.

Share of founder respondents (%) who have raised external funding by education background

Source:

Legend

  • All founders
  • Already raised external capital
  • Bootstrapped to date
Note:
Share of founders who reported having already raised external capital (of any amount) versus reporting having bootstrapped their companies. Excludes founders who responded 'Other'. Founder respondents only. Numbers may not add to 100 due to rounding.

We're beginning to see the industry pay attention to other intersections beyond gender, such as race, class, ability and more. This intersectional approach supports and celebrates individuals who have multiple identities, such as black women. Over the past couple of months, there have been a number of initiatives supporting these underrepresented groups, such as EITFood Change Makers Programme; a two-day hackathon for women and people of colour in the agricultural sector and Included VC; a 12-month venture capital fellowship group for marginalised communities, such as veterans and refugees.

Deborah Okenla

YSYS

Founder & CEO

The survey asked founders to share details of their financial situation immediately prior to starting their company to provide an insight into the financial background of European tech founders. According to the responses shared, 80% of all founders stated they lived comfortably or at levels that left disposable income once basic expenses were met. This compares to 39% of the EU-28 population that live easily, fairly easily or very easily, according to Eurostat. Again, looking at any variance between the share of founders based on whether they have raised external funding or not, there is also an observable difference between founders based on their self-reported prior financial situation.

Share of founder respondents (%) who have raised external funding by prior financial status before starting company

Source:

Legend

  • All founders
  • Already raised external capital
  • Bootstrapped to date
Note:
Share of founders who reported having already raised external capital (of any amount) versus reporting having bootstrapped their companies. Excludes founders who responded 'Other'. Founder respondents only. Numbers may not add to 100 due to rounding.

D&I and investment data: the limitations

If you have access to, or suggestions for, data sets which would help us tell this story, please email research@atomico.com.

Funding for all women teams is actually going down. There is no material improvement in the share of capital invested in European tech companies going to diverse founding teams. In fact, the share of capital invested in companies founded by women decreased in 2019 versus 2018. This means that in 2019, $92 in every $100 invested in Europe went to founding teams that were all men.

Capital Raised By Founding Team Gender

$92 in every $100
invested in Europe went to founding teams that were all men

Share of capital raised and deals (%) by founding team gender composition

Source:

Legend

  • Men
  • Mixed
  • Women
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 annualised based on data to September 2019.

The gender diversity of founding teams varies according to the size of the round. There is a greater level of diversity at round sizes of less than $10M, though it is notable that there has not been any material change in the trends over recent years. It's also notable that larger rounds are typically raised by founding teams that are all men, and so the more these large rounds are raised, the greater the dilutive impact on the overall share of capital raised by more gender diverse teams.

Share of deals (%) by round size, year and founding team gender composition

Source:

Legend

  • Men
  • Women
  • Mixed
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 annualised based on data to September 2019.

The share of rounds raised by more gender diverse founding teams varies by country across Europe. Looking at the total distribution of deals raised by founding teams since 2015, it is noteworthy that countries from Southern Europe, such as Portugal or Italy, have seen greater diversity in the number of rounds raised by teams composed of women or mixed-gender founders compared with Nordic countries, such as Finland or Denmark.

Share of deals (%) by founding team gender composition and country, 2015-2019

Source:

Legend

  • Men
  • Mixed
  • Women
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 based on data to September 2019.

What kind of progress do I think the European tech community has made towards increasing diversity and inclusion in the past 12 months? The slow kind.

Steve O'Hear

TechCrunch

Journalist

It's particularly notable that, when looking at the evolution of the share of deals by the gender composition of founding teams over time in different European countries, there's been minimal movement in recent years in almost all countries.

Share of deals (%) by founding team gender composition and country

Source:

Legend

  • Men
  • Women
  • Mixed
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 based on data to September 2019.

Looking across industries, there are significant differences in the distribution of rounds to founding teams of different gender compositions. Industries such as health and food show a higher level of founding team diversity.

Share of deals (%) by founder team gender and industry, 2015-2019

Source:

Legend

  • Men
  • Women + mixed gender
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel.

There are other reasons to be optimistic that greater diversity can be achieved across all industry verticals. In quantum computing, for example, a rapidly growing deep tech sub-sector, we found that 23% of European quantum companies had a mixed or woman-led founding team, more than double the European average of 13%.

Share of deals (%) in quantum companies by founding team gender composition, 2015-2019

Source:

Legend

  • Men-only teams
  • Mixed gender and women-only teams
Note:
Based on a sample of 85 companies globally of which 35 are in North America and 44 in Europe. All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. 2019 YTD is as of October 2019.

The fact that Quantum is more inclusive should not be a surprise given the large proportion of women scientists and engineers in Europe. Women actually account for more than half of the population of scientists and engineers in Lithuania, Bulgaria, Latvia and Denmark.

Share of women scientists and engineers (%) in Europe by country

Source:

Legend

  • Men
  • Women
Note:
Data is sourced from Eurostat and gathered by CERN.

The quality and diversity of talent in deep tech fields are also evident when looking at the gender composition of the student population of Europe's leading technical universities, which rank amongst the highest-rated globally for engineering and technical qualifications. These institutions have female participation levels in terms of share of students that are typically far higher than European tech industry benchmarks.

Share of female students (%) and rank of select European universities among global top 100 in engineering and technology

Source:
Note:
Rank refers to position in global list of top 100 institutions for engineering and technology qualifications. Includes 1,008 universities across the world. Share of females refers to share of female students attending the university.

We revisited prior analysis exploring the gender composition of the leadership teams of European tech companies that raised a Series A or Series B round in the past 12 months and found that men continue to account for the overwhelming majority of executives in Cx0 positions. For example, there was only one CTO that is a woman out of more than 119 CTOs in the sample set. Executive roles in Finance, Marketing and Operations are most likely to be filled by women.

Gender Composition in Executive-level positions

1 in 12
For every woman executive, there are 12 men executives.

Gender composition by C-level title

Source:

Legend

  • Women
  • Men
Note:
Based on a sample of executives in CxO positions at 251 European VC-backed tech companies that raised a Series A or B round between 1 October 2018 and 30 September 2019 with more than $10M funding.

Woman C-level executive

1
1 woman CTO out of 119 CTOs working at VC-backed European tech companies that raised a Series A or B in the past year with more than $10M of funding.

Source:

We have now produced this analysis across three cohorts of companies since 2017, and there has been no positive change in either the gender composition of founders and CEO's, or at the full executive leadership teams. In fact, the numbers declined slightly in 2019. Women made up just 8% of all leaders in CxO positions in the 'class of 2019' cohort, versus 9% in the previous two cohorts analysed.

Share of women (%) by executive-level positions of selected European Series A and B venture-backed companies

Source:

Legend

  • 2017
  • 2018
  • 2019
Note:
Based on a sample of founders and executives in CxO positions at 382 European VC-backed tech companies that raised a Series A or B round between 1 October 2018 and 30 September 2019.

Though there is a near absence of women in technical leadership positions within European venture-backed tech companies, there is not an absence of developer talent with significant experience in either gender.

Experience and gender breakdown of professional developers in Europe

Source:
Note:
Based on Stack Overflow's 2019 survey. Experience relates to years since learning to code.

Looking on a country-by-country basis at the experience level of the European developer base, a number of countries stand out with a material share of women developers with more than 15 years of experience.

Top 5 countries by share of women developers with over 15 years of experience

Source:

Legend

  • Women
  • Men
Note:
Based on Stack Overflow's 2019 survey.

Though there is a difference of opinion over how meaningful these steps that have been taken have been, VC respondents shared that they have made changes to the way they source new investment opportunities over the last 12 months. The most frequently cited changes by respondents were diversifying their networks of partner funds and angel investors, while the least frequently cited changes were running open office hours and responding positively to cold inbound opportunities.

In the last 12 months, have you made any changes to how you source new investment opportunities?

Source:

Legend

  • Increased focus
  • Decreased focus
  • Stayed the same
Note:
Venture capitalists only. Numbers may not add to 100 due to rounding.

If investors are more representative of society's diversity, we will reach a more diverse set of entrepreneurs. They, in turn, can create a whole range of companies and services that we have not previously thought of.

92% of all funding went to all-men teams this year, which is not much better than last year. It’s obvious that capital is not being allocated in a way that reflects our society or encourages a broader set of people to become entrepreneurs. Diversity of all kinds is lacking in our ecosystem. I am passionate about changing the status quo, and increasing diversity at VC funds is one important piece to encourage more diverse founders. If investors are more representative of society's diversity, we will reach a more diverse set of entrepreneurs, we will reach more diverse entrepreneurs. They, in turn, can create a whole range of companies and services that we have not previously thought of.

Sophia Bendz

Atomico

Partner

Given these static numbers, it's important to examine the steps that investors have taken to try to improve the diversity of the founders they invest in. Venture capitalist respondents to the survey were divided over whether the European VC industry has taken meaningful steps to improve the diversity of the founders they back. In fact, for this particular question, there was a greater level of divergence of opinion between the VC respondents than for all other questions where VCs were asked to share their sentiment on major industry issues.

Thinking about the past 12 months, do you agree or disagree with the following: European VCs have taken meaningful steps to improve the diversity of the founders they back

Source:
Note:
Venture capitalists only. Numbers may not add to 100 due to rounding.

I think we have made huge steps in understanding and admitting the problem. Now, action will be key. In the words of Alan Turing, 'we can only see a short distance ahead, but we can see plenty there that needs to be done'.

Suranga Chandratillake

Balderton Capital

General Partner

We found important differences in the changes to sourcing activities reported by VC respondents who were men and women that suggests the focus on improving diversity is itself not equally shared. For example, 63% of VC respondents who are women said they had increased their focus on attending events with stronger participation from diverse founders, compared to just 36% of respondents who are men.

In the last 12 months, have you made any changes to how you source new investment opportunities?

Source:

Legend

  • Increased focus
  • Decreased focus
  • Stayed the same
Note:
Venture capitalists only. Numbers may not add to 100 due to rounding.

We also found large differences between men and women when it came to sourcing activities such as running open office hours or focusing on sectors with greater founder diversity.

In the last 12 months, have you made any changes to how you source new investment opportunities?

Source:

Legend

  • Increased focus (women)
  • Increased focus (men)
Note:
Venture capitalists only. Respondents that answered 'Increased focus' only. Numbers may not add to 100 due to rounding.

It's important context to show the level of female representation within the VC industry. Diversity VC's data shows that VC funds in the UK have improved the representation of women at junior levels, but there has not been any material change in the share of women venture professionals at more senior levels, with no movement at the partner level.

Share of women investors by seniority, 2017 vs 2019

Source:

Legend

  • 2017
  • 2019
Note:
Diversity VC analysis 2019. Based on a sample of 987 and 1,436 venture professionals in 2017 and 2019 respectively.

Tech startups and scale ups are taking action to improve diversity and inclusion but there is still work to be done in terms of adopting D&I policies and implementing training programmes.

In the last 12 months, has your company taken any of the following actions to improve diversity and inclusion?

Source:

Legend

  • Already actioned
  • Yes
  • No
Note:
Venture capitalists, founders and startup/scaleup employees only. Numbers do not add to 100 as respondents could choose multiple responses.

It's our responsibility to build an open and inclusive tech ecosystem in Europe. We have taken the first step and started a conversation around the topic. Now we need a firm commitment, actions and measures to move forward, as there is clearly value to be captured through diversity. I wish more LPs would start demanding venture capitalists to be the change they want to see in the industry.

Ekaterina Gianelli

Inventure

Partner

Last year, our survey found that 46% of women working in the European tech industry had experienced some form of discrimination at some point in the past. This year, we found that 38% of respondents who are women had experienced some form of discrimination in just the past 12 months. In fact, almost half (49%) of all founders who are women and more than 40% of founders from minority ethnic groups report having experienced some form of discrimination during the last 12 months.

In the last 12 months, have you experienced any form of discrimination while working in the European tech industry?

Source:

Legend

  • Yes
  • No
Note:
Numbers may not add to 100 due to rounding.

Discrimination in the European tech industry takes many forms. Women respondents most commonly report having experienced gender-based discrimination, while men most commonly report age-based discrimination. The survey can't accurately quantify the level of discrimination based on all forms of discrimination (for example, disability or sexual orientation), but the data points to these being very prevalent here too.

What kind of discrimination have you experienced?

Source:

Legend

  • Women
  • Men
Note:
Respondents who reported having experienced some form of discrimination only. Numbers may not add to 100 as respondents could select multiple choices.

Respondents who self-identified as belonging to different minority ethnic groups also reported different experiences of discrimination while working in the European tech industry. For example, 80% of respondents that said they had experienced a form of discrimination in the past 12 months while working in the European tech industry and that self-identified as Black/African/Caribbean reported they had experienced discrimination on the basis of their ethnicity.

What kind of discrimination have you experienced?

Source:

Legend

  • Asian
Note:
Respondents who reported having experienced some form of discrimination only. Numbers may not add to 100 as respondents could select multiple choices.

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