Where Are the Women in Climate Tech?
There is not a lack of climate tech venture capital deals in the market. In 2021, roughly $40bn of VC funding was poured into cleantech start-ups, with 28 companies attaining unicorn status. However, women founded companies received only 2% of venture capital dollars.
Where are all the women in climate tech?
Disclaimer: opinions are my own, this is not an official OGCI Climate Investments post.
Statistics on how companies founded or co-founded by women perform better are consistently published (to be clear, the definition of women in this post includes anyone who identifies as a woman). Studies have found that start-ups with at least one female founder generate 78 cents in revenue for every dollar of investment raised, versus 31 cents generated by all-male founded teams. Firms with greater c-suite gender diversity are more innovative, less open to risk, and have lower CO2 emissions.
So, what is causing the problem?
Most climate tech is engineering-driven, but it is well documented that women are underrepresented in STEM fields (science, technology, engineering, and mathematics). Women are also more likely to fall out of the workforce due to being the primary caregiver.
There is also a gender investment gap, with women receiving significantly less early-stage capital compared to their male peers. This may be caused by unconscious affinity bias, whereby early-stage investors have a bias towards investing in founding teams of their own gender.
This phenomenon is seen in both male and female investors; a 2020 report found that female VC partners invest in twice as many women founded teams at the early stages. However as of 2020, 65% of VC firms had no female partners or GPs, compounding the gender investment problem.
What can we do?
As an investor, and a woman, I want to support and invest in women-led climate tech solutions. Solving the climate crisis requires diversity of thought, and diversity of gender.
In his 2022 letter Larry Fink stated, “the next 1,000 unicorns won’t be search engines or social media companies, they’ll be sustainable, scalable innovators — start-ups that help the world decarbonize”. I want to make sure women founded companies make up more than 2% of that.
We need to tackle this proactively. I’m part of an initiative called Climate Mosaic, which aims to build a future where the entrepreneurs tackling climate change, and the investors backing them, are as diverse as the world we live in. If you are a woman founder or leader in climate tech, get in touch — I’d love to talk.
Let’s solve this together.
