Europe’s DeepTech Industry misses out on €198.8 billion due to gender disparities

As we approach International Women’s Day (March 8th), the conversation around gender equality in tech is more relevant than ever. Despite progress made, Europe’s DeepTech industry remains a stark example of how much further there is to go.

According to the newly released GENDEX index, funded by the European Innovation Council (EIC), gender disparities in DeepTech have led to a staggering €198.8 billion in lost value over the past decade.

Tanya Suarez, Chair at GENDEX, said: “If investors and policymakers don’t act now, Europe will continue losing billions in untapped talent. This data proves we need structural change. Not only is it needed to fairly represent women, but evidence shows a gender-balanced ecosystem delivers the best results. Our inaugural index has been a huge undertaking by our team and partners, we’re today very grateful to all involved and look forward to helping companies benefit from the actionable learnings the index has generated.”

The data paints a clear picture: women-led companies account for only 0.6% of non-IPO exits in the past ten years, yet they have generated over 11% of the value raised at such exits. If women-led companies had achieved equal representation at the exit stage (both IPO and non-IPO), the European tech ecosystem could have unlocked nearly €200 billion in additional value.

The index further highlights the hurdles faced by women-led DeepTech companies.

On average, it takes women founders six months longer than their male counterparts to sign their first term sheet. When they do secure funding, they receive 1.8 times less than companies led by men, and the terms they receive are often less favourable – according to the study.

Women also remain underrepresented in intellectual property ownership, with only 24% of European patent applications including women as inventors. Meanwhile, women account for 31% of researchers and scientists employed in Europe.

Structural biases in investment decision-making continue to be a significant barrier. As one female founder interviewed for the index pointed out:

“I think men, when they see young women, especially in the mould of their daughters, who are so much younger than them… I think there’s a bias towards women being less capable or that they just see their daughters basically. A little bit of paternalism on their part.”

The gender gap is also visible within technical roles. The research found that 29% of women founders have over 50% women in technical positions, compared to just 1% in companies led only by men. This suggests that diverse leadership fosters more inclusive hiring practices, making a strong case for increasing support for women-led ventures.

Stéphane Ouaki, Head of Department, European Innovation Council, added: “Tapping into Europe’s diverse talent pool in the tech and investment sectors in the broadest and most effective way possible is vital if we are to capitalise fully on our many strengths in innovation. To address the persistent gender and diversity disparities within Europe’s innovation ecosystem,  it is crucial to assess these issues in a coherent way using unified data. This is where the GENDEX project comes in.”

Despite women making up 42% of STEM graduates in Europe, their representation declines sharply in the professional sphere. The GENDEX findings reveal a “narrowing funnel” effect, where female talent is lost at various stages, limiting the diversity and innovation potential of the tech sector.

The report goes further than highlighting the issues at hand, it also presents a way forward. The index recommends four key actions for improving gender diversity in European DeepTech:

1. Closing the data gap – Investors should require gender diversity reporting before deploying capital.
2. Following the returns – Women-led teams deliver strong outcomes, and more funding should be allocated accordingly.
3. Securing IP rights – Women need better legal and financial support to patent their innovations.
4. Public funding with accountability – Government co-investment should mandate gender-balanced portfolios.

Raphael Crouan, Managing Director of Tech Clients in Europe at Orrick and President of French Tech London, stressed the importance of maintaining focus on this issue:

“Gender diversity in tech is a problem we’ve never been more conscious of, but we’re nowhere near where we should be. As a matter of fact, if you look at the numbers, we had a more diverse approach immediately post-pandemic than we do today. We are drastically lacking in consistency when it comes to this topic, across the board.

“However, you don’t change a generation of habits in one swoop, it’ll take another generation or so to put things right. This is why using an index as a point of reference is vital. By repeatedly assessing specific data points over prolonged periods, we’ll get a true understanding of the direction in which things are moving.”

As Europe aims to maintain its position as a global leader in innovation, it cannot afford to leave half its talent on the sidelines.

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