The 2020 State of European Tech report shines a spotlight on the sector’s dismal track record when it comes to diversity and inclusion.
Although most founders have found it harder to raise venture capital in Europe in the last 12 months, it is especially true in underrepresented groups.
Last year, 31% of underrepresented founders said they had experienced difficulty raising cash.
In the latest report that number has jumped to 62% saying they are finding it more challenging to raise venture capital (compared with 54% of white founders).
Data from the UK suggests that though black and multi-ethnic communities represent 14% of the population, all-ethnic teams received 1.58% of all venture capital funding across stages between 2009-2019.
“Covid-19 put the brakes on much needed change, and more action is needed if Europe is to stop squandering talent and value.” The State of European Tech report 2020
The report also notes that while discrimination remains a systemic problem, progress on gender diversity in European tech appears to have stagnated, with all-men teams capturing 90.8% of all capital raised (90.3% in 2019) and 85% of all rounds.
A total of 300 founders were asked whether they think the European tech ecosystem is fair to people from all demographics, backgrounds and experiences.
While 41% of male respondents said they believed that equal opportunity is available to all, only 19% of women respondents agreed. And 77% of Black/African/Caribbean participants disagreed with the statement.
As a Ghanaian-German female founder, living and raised in Germany, I think the hardest thing is access and being taken seriously. Often times if you are not already part of a network (which most 1-2 generation immigrant startup founders aren't) it is really hard to tap into that. It's very much like a sorority over here. Secondly since most VC are white, male and 40+ they often don't understand the ideas, products or opportunities within the Female BIPoC founders community. Nana Addison CURL. Founder & Director
The report goes on to note that European tech has been a net beneficiary of the shift to digital.
This includes digital adoption and movement online, remote collaboration and communication tools, technology to fight and cure COVID-19 along with enhanced healthcare delivery.
And the pandemic has seen a trend towards “opportunity born out of crisis.”
While the UK leads in activity, tech hubs are growing all over Europe at a rapid rate.
“We’ve seen two years’ worth of digital transformation in two months”. Microsoft CEO Satya Nadella
The report’s author’s claim that a great opportunity lies ahead if Europe’s startups can be front and centre of the effort to combat climate change.
Investment into Europe’s climate-focused start-ups has soared to over $11bn cumulatively in the last five years.
The European Commission’s Green Deal has been a key policy focus in 2020 and could prove to be an important catalyst for continued investment in this area.
Policymakers must recognise that promoting a healthy innovation ecosystem requires a seamless bridge for talent across European countries and policies that level the playing field. Erin Platts, Head of EMEA and President of the UK Branch, Silicon Valley Bank
The report’s findings show that 2020 is on track to be the highest year on record for investment in the European innovation economy, outpacing both North America and Asia
The report’s authors state: “As we noted in the introduction to last year’s report, “Tech is the economy.” It feels more true today as society depends on innovation to address the pandemic, the new workplace, and the many systemic challenges”.
The State of European Tech report 2020 was produced by Atomico in partnership with Slush and Orrick. Over 70 people and more than 20 companies and organisations provided insights and data.
* Atomico is looking for partners on diversity data. Contact [email protected]