Venture capital depends on identifying undervalued assets before the wider market catches on. Yet one of Europe’s most persistent investment gaps may already be hiding in plain sight: women-led deep-tech startups.
Recent research suggests that startups founded by women generate 78 cents of revenue for every dollar invested, compared with 31 cents for male-founded ventures. Despite that, all-female founding teams receive just 1.2% to 2.3% of venture capital funding across Europe. In deep tech, women account for 14% of founders but attract only 11.4% of investment overall, rising to 15% at seed stage.
Figures from the European Patent Office show a similar picture. Women feature on just 13.5% of European startup patent applications, while historically smaller funding rounds have left many businesses entering the market with lower valuations than comparable peers. For investors, the disconnect raises an important commercial question: are promising businesses entering the market at valuations that do not reflect their long-term potential?
That question resonates with investors focused on early-stage technology. Alena Redeker, principal at Auxxo, believes the answer is more nuanced than it first appears. “Both are true at once, and that’s exactly why the gap persists. There genuinely is a commercially attractive opportunity being overlooked, but it’s not being overlooked because investors are consciously leaving returns on the table. It’s structural,” she said to Raconteur.
Bridging deep tech’s funding gap
The European Union hopes to address part of that gap through the latest Women TechEU programme. Backed by a €12m budget, it will award €75,000 equity-free grants to 160 early-stage women-led deep-tech startups, providing non-dilutive funding as companies move from validated research towards commercialisation.
Programme organisers acknowledge, however, that these grants are designed to accelerate progress rather than finance the full commercialisation journey.
In a joint response on behalf of the Women TechEU consortium, Virginia Gómez, Women TechEU coordinator and EU projects area manager at Sploro, Angele Giuliano, managing director at AcrossLimits, and Rebecca Zammit, director of operations at AcrossLimits, said:
“Our beneficiaries have highlighted that while the Women TechEU grant is very valuable, it rarely covers the heavy costs that come with being deep tech, such as obtaining regulatory milestones (e.g., CE-marking), and navigating the longer and more complex investor pathways.”
That longer investment horizon is precisely what specialist investors expect. Redeker alluded to this, saying, “The honest starting point is that the right question at pre-seed and seed is rarely ‘what if it fails’ but rather ‘how big can this get if it works.’ VC is an outlier game, and deep tech is where the biggest asymmetries live since the outcome is often binary with real moonshot bets.”
The programme also reflects a broader effort to widen Europe’s innovation base, with 40% of funding reserved for “widening countries”.
The Women TechEU consortium added:
“What our experience has shown us during the implementation of Women TechEU is that Widening innovators are not in any way lacking talent or determination, but rather access and opportunity. Commercial viability increases when you provide entrepreneurs with the tools they need to continue building.”
Whether that support ultimately changes venture capital flows will depend less on public grants than on whether private investors continue backing these companies as they scale.
What the market is missing
The strongest argument for narrowing the funding gap is emerging from Europe’s deep-tech ecosystem itself.
Latvia-based PrintyMed, founded by Jekaterina Romanova, has developed a non-toxic process for producing artificial spider silk with potential applications in bioengineered heart valves and implantable medical materials.
In Northern Ireland, MoveTru, founded by Naomi McGregor, combines wearable technology with artificial intelligence to address longstanding data gaps in women’s sports medicine. The company has already attracted $1.9m in pre-seed funding.
Neither company guarantees commercial success, nor does capital efficiency alone determine investment decisions. But together they illustrate the type of technically sophisticated businesses emerging from a part of Europe’s innovation economy that has historically attracted less capital than its performance may justify.
Rethinking the investment case
Ultimately, the success of initiatives like Women TechEU will not be measured by the grants they distribute, but by whether they change how private capital is allocated. Early signs are encouraging: startups from previous Women TechEU cohorts converted €9m in public investment into €53.8m in private follow-on funding within a year, demonstrating how early validation can help reduce perceived investment risk.
Regional organisations such as AwakenHub are also expanding investor networks dedicated to women-led businesses, helping connect founders with private capital beyond public funding programmes.
Redeker believes lasting change also depends on who ultimately controls investment decisions. “We need more women not just in investment roles but with real decision-making power over where capital goes, because we consistently see female partners backing female founders – we all carry our similarity biases – so raising the share of women who manage the AUM is what genuinely reshifts capital toward female-founded companies,” she said.
Markets are not always perfectly efficient.
If Europe continues producing technically sophisticated, capital-efficient deep-tech companies that attract disproportionately little investment, the question is no longer whether the funding gap exists—but whether investors are overlooking one of the continent’s most compelling innovation opportunities.
Venture capital depends on identifying undervalued assets before the wider market catches on. Yet one of Europe's most persistent investment gaps may already be hiding in plain sight: women-led deep-tech startups.
Recent research suggests that startups founded by women generate 78 cents of revenue for every dollar invested, compared with 31 cents for male-founded ventures. Despite that, all-female founding teams receive just 1.2% to 2.3% of venture capital funding across Europe. In deep tech, women account for 14% of founders but attract only 11.4% of investment overall, rising to 15% at seed stage.
Figures from the European Patent Office show a similar picture. Women feature on just 13.5% of European startup patent applications, while historically smaller funding rounds have left many businesses entering the market with lower valuations than comparable peers. For investors, the disconnect raises an important commercial question: are promising businesses entering the market at valuations that do not reflect their long-term potential?
