Austria has the Highest Share of Female Startups in the EU

Lifestyle & TravelCulture ♦ Published: July 20, 2022; 21:24 ♦ (Vindobona)

The Federal Ministry of Labor and Economy (BMAW) had surveyed the financing situation of female startups for Austria and Europe and discussed it at a startup breakfast together with representatives of the startup community at the BMAW. At 36 percent, Austria currently has the highest proportion of female startups in the EU.

At 36 percent, Austria currently has the highest share of female startups in the EU. / Picture: © Marina Tower Holding GmbH

The report of the Startup Center at the Vienna University of Economics and Business (WU) "Female Startups & Investing" provided results on the status and development of the financing situation of female startups in Austria and Europe. Female Entrepreneurship is also one of the central topics of the recently reconstituted Startup Council of the BMAW.

"Women are underrepresented as company founders in almost all countries and in all types of startups. Yet the potential of women is indispensable for Austria and Europe as a business location," emphasizes Eva Landrichtinger, Secretary General of the Federal Ministry of Labor and Economic Affairs.

Investments increased but female startups still underrepresented

According to BMAW, one in five startups (21 percent) in the European Union (EU) is a female startup. Since 2010, a strong increase in the proportion of women from 13 percent to 21 percent can be observed (increase: 64 percent), according to BMAW.

This positive development was favored by a variety of awareness, support and promotion measures for innovative female founders, by private as well as public organizations in almost all European countries.

According to BMAW, the strongest growth can be observed in Northern Europe (Denmark, Finland and Sweden) and Western Central Europe (Germany and Austria), where the share of women has more than doubled in the last twelve years. At 36 percent, Austria currently has the highest share of female startups in the EU.

As with male startup teams, the probability of a female startup acquiring venture capital funding is largely the same. According to BMAW, the rate of venture capital financing in the 27 EU countries is 46 percent for all startups and 44 percent for female startups.

However, there is a "gender funding gap", as female startups attract less funding than male startups.

The strong increase in the number of female startups is not reflected in their share of the funding volume. Only about one in nine euros invested goes to startups with at least one female founder, according to BMAW . Available data suggests that last year's record investments in particular went predominantly to all-male founding teams.

The causes of the gender funding gap are manifold and often stem from unconscious bias in investment decisions. Often, stereotypical attributions result in female and male startups being confronted with entirely different types of questions by male and female investors. While questions directed at men tend to be supportive in nature, women are much more likely to be pushed into a defensive position. This leads to company valuations that are more than seven times higher for men than for women.

This effect is reinforced by the strong dominance of men in the venture capital industry. Almost 80 percent of European venture capital funds are run by all-male partner teams, and 87 percent of European and 95 percent of Austrian business angels are men.

Austria wants to provide more support for startups, especially female ones

"We are therefore committed to strengthening women as founders through a wide variety of measures via our funding agencies aws and FFG. I am proud that Austria holds a leading position in the EU with 36 percent female startups. It is important that the effect of unconscious bias against women in investment decisions becomes better known so that it can be actively countered," says Landrichtinger.

The promotional bank of the Austrian federal government, Austria Wirtschaftsservice GmbH (aws),  and the funding agency Austrian Research Promotion Agency (FFG), offer funding specifically for female startup founders.

The FFG management under Henrietta Egerth and Klaus Pseiner explained that Austria with the FFG with more than 78 million euros last year made a significant contribution to strengthening the innovative power of domestic startups, scale-ups and spin-offs and titled this a "record value!"

The aws management team under Edeltraud Stiftinger and Bernhard Sagmeister has a similar view, explaining that as the federal government's promotional bank, aws supports companies from the initial idea to international market success. According to the aws management, a particular focus is on young innovative companies, which were supported with around 380 million euros last year. Here, too, the share of female founders is said to have risen sharply according to BMAW. According to BMAW, the share of female founders has increased by 50 percent within two years. The aws management emphasized that since this year there is an additional Female Entrepreneurship Bonus in some programs and thus higher funding amounts for projects with women in the founding and shareholder team. They are convinced that this will make a contribution to "providing special support for women in their entrepreneurial challenges".

Female startups are startups with at least one female co-founder. They thus include both all-female and mixed-gender startup teams. The analysis is based on data from more than 26,000 EU startups and covers 23,000 venture capital financing rounds with a volume of 109 billion euros listed on the platform. For the in-depth analysis of the situation in Austria, data from the Austrian Startup Monitor surveys - some of which has not been published before - was used.

BMAW - Austrian Federal Ministry of Labour and Economy

Austrian Research Promotion Agency

Austria Wirtschaftsservice GmbH