Female-founded, equity-backed businesses have now closed the gender funding gap in greentech, according to a new report from the Female Founders Forum – a partnership by think tank The Entrepreneurs Network and Barclays.

Having raised £2.8bn since 2018, female-led businesses have received 42% of all venture capital going towards greentech businesses – more than an equal proportion of equity funding.

The report, Inspiring Innovation, also reveals that female representation in greentech is higher on average than other sectors, with more than a third (34%) of businesses being female-founded.

One of these greentech companies, Greyparrot, is changing the way businesses deal with their waste. Using AI, the company is able to analyse, in real-time, the types of waste making its way along conveyor belts in order to increase recycling rates. To date, they have raised £4.1m in funding from investors and £500,000 from Innovate UK.

Mikela Druckman, co-founder and CEO of Greyparrot, said: “Globally, we produce more than two billion tonnes of solid waste every year and only 19% of that is actually being recycled. When China decided to stop accepting waste from other nations for recycling in 2018, it created a shock to the global waste trade ecosystem. It really brought to life that there’s this huge problem that has to be solved.

“I was incredibly inspired by examples of women who had to break barriers in their fields, and I knew that I wanted to be able to do the same for the next generation. When most of the people in the room are still all male, it can create an imbalance. But being able to be connected with peers going through the same thing is incredibly beneficial to the entrepreneurial journey. It’s not an easy journey. But it’s probably one of the most rewarding journeys you can ever have.”

However, even with such progress in greentech, the amount of equity finance raised by female-led businesses has remained static at 15% for the past five years, despite 25% of businesses having at least one female founder. This shortfall in equity funding is equivalent to £1.6bn.

In sectors such as life sciences, the funding gap is even more stark. Almost a quarter of businesses are led by women (22%), yet they only receive 4.5% of all equity funding.

Aria Babu, head of the Female Founders Forum, said: “It’s encouraging to see the gender funding gap start to close, but there is still a way to go. We know women start businesses with on average half as much money as men do, so raising equity finance is critical. However, due to unconscious bias, Venture Capitalists are more likely to invest in people just like them – and with half of firms not having any female investors, female founders are massively on the back foot.

“The last 18 months have demonstrated the importance of innovation, from life-saving developments in Life Sciences, to technology bringing our society together. It’s incredibly important that female founders in all sectors are receiving proportional backing from investors, to ensure no opportunities are missed and the UK stays at the forefront of innovation.”

Katherine Morgan, head of high growth & entrepreneurs at Barclays, said: “It’s inspiring to see female entrepreneurs leading the charge in greentech. In the run up to COP26, innovations from these companies will be vital in helping the UK reach its target of net zero by 2050. However, despite this sector setting the standard, overall progress is stagnant – and we need investors to help women in all sectors succeed.

Finance and providing skills to this generation of female entrepreneurs, as well as the next.

“At Barclays, we’re committed to connecting more women with the right finance and providing skills to this generation of female entrepreneurs, as well as the next. I’m continually amazed by the innovative businesses we work with, such as Greyparrot, and I know these female entrepreneurs will continue to inspire the next generation of female-led STEM businesses. However, we need a collective effort across the industry to ensure we’re doing everything we can to make the UK the best place in the world to be a female entrepreneur.”