Investors who have pledged to back women are outperforming the wider market for the sixth year in a row, according to new research commissioned by the government. The findings, published in the Investing in Women Code annual report, show that signatories of the Code have once again directed a greater share of funding to female-led businesses than the market as a whole.
The research suggests that the rest of the investment industry is leaving growth on the table. For SME owners, the message is hard to ignore: women-founded companies continue to perform strongly and show clear growth potential, yet they still face outsized barriers to investment and scale. The data also highlights that female founders receive less than two per cent of all venture capital deployed in the UK, a figure that has barely moved in a decade.
Minister for Small Business and Economic Transformation said, "For the sixth year in a row, Investing in Women Code signatories have outperformed the wider market, showing that backing female founders is good for business and good for growth." However, the minister also acknowledged that women-led businesses still face greater barriers to funding and growth, emphasizing the importance of targeted programmes to help women start and grow businesses.
The research underlines the value of targeted programmes in regions where female entrepreneurship remains underdeveloped. Strengthening these initiatives would boost innovation, job creation, and regional productivity. A recent study found that a quarter of female business owners have taken second jobs to keep their ventures afloat as economic conditions bite, even as two-thirds expect revenues to rise over the next year.
Sheila Flavell CBE, chief operating officer of FDM Group, emphasized the need for diversity and inclusion in the industry. "The lack of diversity across industries including technology continues to be a significant barrier to growth," she said. "Upskilling must be at the heart of this effort, with clear, supported pathways into technical and leadership roles."
The pressure is on for businesses and government to work together to invest in training that equips women with in-demand digital and AI capabilities. The Invest in Women Taskforce, which launched with commitments from major lenders and investors, has now deployed more than £70 million from its £635 million funding pool in its first year. This sits alongside the British Business Bank's £400 million Investor Pathways Capital initiative, designed to support emerging fund managers and widen access to investment opportunities.
For female founders weighing up a raise, the practical takeaway is to look first at lenders and investors who have signed the Code. Six years of data suggest they are measurably more likely to say yes, making the Investing in Women Code an attractive option for businesses looking to tap into the growth potential of women-led companies.
