The gender funding gap in Central and Eastern European startups

Following our work with Unconventional Ventures over the last two years looking at the gender funding gap in Nordic startups, we’ve turned our attention to Central and Eastern Europe, in partnership with UV, Experior Ventures and European Women in VC.

This new report exploring CEE funding through the gender lens. It looks at the gender split for VC funding in CEE, average round sizes for all-men, all-women and mixed gender founding teams, and the gender diversity of VC funds investing in CEE startups.

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The 1%

As we found in the Nordics, in CEE there is a significant disparity between the amount of funding directed towards startups with all-men founding teams, and those with women founders/co-founders. More than 94% of capital directed towards CEE startups goes to all-men founding teams. Women-founded startups raised just 1% of investment in Central and Eastern Europe (CEE). 5% went to mixed-gender founding teams.2020 was not an outlier.

In addition, progress is flat. Since 2016, all-women founding teams have received on average 2% of startup investment.

Cheque sizes

In CEE, average round sizes at Seed and Series A are smaller for all-women teams in CEE than for mixed and all-men teams. Seed rounds are 20% bigger for mixed-gender and all-men teams than for all-women teams. At Series A the gap increases. Where all-women teams raise on average €1M, all-men and mixed teams raised €2.2M and €2.3M respectively.

Benchmarking Europe

Benchmarking the CEE regions to major European tech ecosystems shows that startup funding in the Balkans is actually more diverse in terms of target founder gender than many other markets, albeit in a smaller dataset. In Germany, the UK and Sweden more than 12% of funding goes to teams with at least one woman founder,

The decision makers

When looking at the investors active in the CEE region, we found that startup investor team members are predominantly men, over 84%. This dataset includes any investor involved in one or more of the funding rounds of a company in CEE that has raised at least EUR 0.2M, regardless of the geography of the investor. This represents all investor types, including corporates, corporate venture capital (CVC), VC, and angel investors. Looking specifically at venture capital firms active in CEE, we see a similar picture; 85% of VC firms team members are men.

Digging deeper into the gender distribution according to job roles within Venture Capital firms that have made CEE investments, we find that the more senior a position in a VC firm, the more it skews towards men. While it is good to argue the pipeline within VC has improved, with more women at junior and associate level, the decision makers are still overwhelmingly men.

These are stark findings, that suggest a huge untapped potential in female entrepreneurship. Though these findings are similar to those seen in our Nordic analysis, the numbers are even more unequal in Central and Eastern Europe, and with no movement in the right direction. But now that we have clear data on the state of play for the very first time, we’ll be able to see whether regional women in tech initiatives start moving the needle.

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