AI startups led by female founders are failing to secure funding despite an influx of finance into the industry.

According to a new report for the Alan Turing Institute, while around £10.5 billion has been invested in the UK AI industry since 2010, women-led teams have only received £72.9 million or 0.7 per cent of investment over the time frame.

Female-led companies account for around four per cent of AI-startups, compared to 78 per cent of all-male founding teams who raised nearly 77 per cent of the total capital invested.

The number of female-founded companies doubled between 2019 and 2022, but the report said the percentage of companies with at least one female founder receiving funding had barely changed over the time period.

The authors of the report recommended that some capital should be “ringfenced” for women and underrepresented entrepreneurs working in AI to improve funding.

They added that it should be mandatory for investors to collect and report their diversity data, especially when investing in new technology. This could involve enforcing VC firms to sign up to the Investing in Women Code, where signatories are obliged to do this.

“The lack of gender diversity in technology, and specifically in AI, constrains the wide variety of perspectives needed to encourage innovation,” said professor Helen Margetts, director of the public policy programme at The Alan Turing Institute. “This important research shows there’s a lot of work to be done but prioritising gender diversity is crucial to ensure we have a well-rounded and versatile economy.”

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