Women in agtech: Are investors missing out on attractive growth opportunities?

According to PitchBook data, global venture capital (VC) activities in agtech involving all-female founders and firms with at least one female founder is on the decline.

That’s probably no surprise given the fall in deal activities across the agtech space as a whole since the 2021 boom. Still, the data show that last year deal counts in the global agtech sector involving companies with at least one female founder stood at 174, with a value of US$1.17 billion. For exclusively women-founded agtech firms, there were 26 deals worth US$50 million. In total, there were 952 agtech deals in 2023, with US$7.1 billion raised.

Exclusively women-founded agtech firms, therefore, made up around 3% of last year’s global agtech VC deal activity. Those with at least one women founder accounted for around 18%. In terms of value, all-female founded start-ups made up 0.7% of activity compared to 16.5% for jointly men- and women-led businesses.

How much venture capital as a whole goes to women-led businesses?​

These numbers suggest females in agtech are underperforming in VC overall. But only just. In 2023, companies founded solely by women garnered 2% of the total capital invested in venture-backed startups in the US, with 25.5% going to male and female-led companies. Female-only founded start-ups made up 5.4% of deals; female and male accounted for 19%.

Female-led start-ups in Europe made up 5.3% of total capital (20.4% were mixed). They took 1.5% in term of capital, with men- and women- founded businesses taking 18.3%.  

Women ‘less likely to swing for the fences’

These numbers represent “slow progress” for women across the board, said Heather Gates, Audit & Assurance Private Growth Leader at Deloitte Touche Tohmatsu.

PitchBook’s US VC female founders dashboard​ shows that the 2% of VC capital won by companies founded solely by women has scarcely changed since 2008 (and has never topped 2.8% in those 16 years).

“Part of the challenge is the nature of women-owned businesses and founders’ approaches. Even when they found great businesses, women are less likely to swing for the fences,” said Gates. “Instead of pitching their companies as the next Google or Meta, they may position them as incremental advances or niche plays. Such modesty doesn’t light up the scoreboard for venture funders seeking a healthy return on their capital.”

Smaller ambitions are reflected in the size of VC deals that female founders do receive. Since 2008, the PitchBook data show that the share of venture deal count directed to companies founded solely by women has almost doubled, from 3.8% to 7%. Yet the share of capital those companies collect has scarcely budged.

There is also evidence that women continue to face deeply entrenched attitudes of discrimination. A study of 2,000 venture-backed startups published in 2023 in Harvard Business Review found that women-owned companies that raised their first-round funding exclusively from female VCs were only half as likely to raise a second round as companies whose funding included a male partner.

“Such attitudes won’t be eliminated until women as well as professionals from underrepresented racial and ethnic groups are holding seats on both sides of the table—and at the head of the table, in senior decision-making positions,” said Gates. She added, however, the spread of meaningful DEI policies in VC firms offers hope for the future. More VC firms, for example, are surveying employees to determine whether they feel accepted and valued, according to Deloitte (32% of 2022 survey respondents, up from 26% in 2020)

“Achieving equality will require VC firms to break old habits,” said Gates. “Partners should reach beyond their familiar networks to recruit entry-level analysts. They can offer mentorship and development to female and underrepresented analysts and junior investment professionals.”

Why are Europe’s women-led businesses faring better?

Female-founded companies are exhibiting momentum, revealed PitchBook’s Europe’s VC female founders dashboard​. According to the data, all-male-founded companies in Europe have collectively closed more than €10 billion each year since 2015, while female-founded companies broke that threshold for the first time in 2021 and all-female-founded companies have exceeded €1 billion only once, also in 2021.

Over the past decade, however, the total number of deals grew more than twice as fast for female-founded teams than it did for all-male-founded teams, meaning their presence is growing to fill the wide gap.

While female-founded companies remain a comparatively small part of the European VC ecosystem, the population has seen significant growth and consistency over the past several years with at least 400 deals closed each year since 2018.

Female founders’ proportion of total European venture deal value is an important metric to contextualize deal activity. In 2023, female founders generated a record-high proportion of deal value (20.5%) and deal count (25.8%). Their proportion of deal value grew 36.2% from 2022 – the sharpest year-over-year uptick since 2012.

The economic benefits of greater numbers of female-led start-ups

If this proportion keeps growing, the benefit to the global economy could be substantial, according to Emma Wheeler, who heads up Women’s Wealth at UBS Global Wealth Management.

“If female entrepreneurs were invested in equally to male entrepreneurs, the global gross domestic product could increase by $5.5 trillion,” she said.

According to UBS estimates​, female entrepreneurs receive just 2% of global venture capital funding. As a result of this gulf, “female entrepreneurs lack equal opportunities to innovate and build successful companies that can contribute significantly to the global economy. And investors are missing out on attractive growth opportunities.”

Ahead of today’s International Women's Day, AgTechNa vigator spoke to Dr Angela de Manzanos Guinot, CEO of FA-Bio. This British-based start-up, founded by Guinot, orinally from Spain, and Dr Kerry O’Donnelly Weaver, has developed innovative technology that allows it to study the active microbial communities in soil​.

Using on-field sensors, it studies and collect microbes from crops and field around the world. Its team of scientists uses this knowledge to discover biological and sustainable replacements to agri-chemicals.

“I’ve always been interested in science and biology, plants always interested me,” she said. “My family own some orange tree groves so it started there. I studied Biotechnology in the University of Agricultural Science in Valencia.

"As I studied my degree, I learned more and more about the potential of biotech helping solve some of the worlds pressing challenges like food security and agricultural sustainability so I became more and more focused on agri-tech.

"That escalated when I came to the UK to study my masters researching chemical biology of crop protection and sustainability. As Kerry O’Donnelly Weaver and I shared the passion for agricultural sustainability we teamed up and started this adventure.”

Do women in agtech face unique challenges? 

Asked if she faced any particular challenges – as a woman or otherwise – in the agtech world, she replied: “It’s sometimes hard to say whether the challenges faced were because of being a woman or because of being Spanish,” she said.

“As a young female foreigner starting a business in a traditionally male sector there were different challenges when it came to speaking to growers and getting them to trust you.

“Growing the business, recruiting people as young female founders into a startup had its hardships. In the early days, I remember going to trade shows with a male colleague and being ignored and thoroughly overlooked as people assumed he was the decision maker.

“There is also the perception when you are trying to fundraise you do face more criticism and judgement because it is true that the majority of decision makers in investments are men and there is that unconscious bias when it comes to women of an age that potentially want to have children.

“There have also been challenges as a new mother struggling to disconnect from the business as there is the worry that I would not be of benefit to anyone if I did so. Juggling being a new mother, managing a household and running a company that is like your baby too (so you don’t want to let it go) is a challenge. It can be overwhelming, especially when your child is ill and your company still also needs you.”

What’s her advice for young women starting to develop an interest in agtech or wanting to pursue a career like hers? “To be resilient, to challenge the status quo, to believe in yourselves and your mission and be surrounded by people that share it."