UK deep tech companies have a serious diversity problem

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Just 7.5% of UK deep tech companies have been founded by all-female teams, according to a new report from the Royal Academy of Engineering.

The Academy’s report found the sector is overwhelmingly dominated by men, with more than three quarters of founding teams being all-male, and just 15% mixed gender.

That's a greater gender disparity than the wider technology ecosystem as a whole, it noted.

The term 'deep tech' refers to companies whose work is based on solutions to major scientific or engineering challenges, such as artificial intelligence, robotics or virtual reality.

Ana Avaliani, director of the Royal Academy of Engineering’s enterprise hub, said the report shows there is still significant work required to improve diversity both within the deep tech sector, but also the broader UK tech ecosystem.

"While there is much to celebrate, the State of UK Deep Tech underlines the important work still to be done to support deep tech founders to scale and grow their companies in the UK," she said.

"It is also vital for a more successful, inclusive ecosystem that the gender imbalance in deep tech leadership is addressed and that leadership diversity in deep tech enterprises is championed."

The Royal Academy of Engineering attributes the gender imbalance, at least in part, to the historically low proportion of women studying STEM subjects in the UK, as well as investor attitudes and the need for more robust support for female entrepreneurs.

UK deep tech companies face acute funding challenges

The report also found that funding remains a challenge for UK deep tech companies. 

Following high levels of investment activity in 2021, the total number of deals secured decreased from a peak of 1,194 in 2021 to 1,181 in 2022. More than half of deep tech companies are currently at seed stage, with active scaleups representing less than 6% of all companies in the UK.

This, the report said, shows there's an urgent need to improve funding access to enable early-stage deep tech companies to scale up.

There are currently 3,462 active deep tech companies in the UK, according to the report.

1,057 based in London, with another 480 in the south east, 425 in the east of England, and 282 in Scotland.

The sector is largely dominated by clean tech, with 517 companies, followed by AI, with 504, and there are 591 active deep tech spinouts from 68 universities, representing 17% of the deep tech sector’s total business.

In the last 10 years, 34 of these firms, including 15 academic spinouts, have listed on a stock exchange, mostly on UK-based exchanges such as the London Stock Exchange or Alternative Investment Market. However, 10 floated on the US-based NASDAQ Stock Market.


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North American investors play a notable role in the exit dynamics for UK deep tech companies, accounting for 56 of the 176 acquisitions that have taken place in the last decade. US buyers have a dual appeal, says the Academy: diversity of size and focus, and greater financial resources than their UK counterparts.

"This report reflects the progress that a thriving ecosystem can achieve in shaping the critical technologies for the future, developing solutions in everything from AI to semiconductors, engineering biology to telecommunications," Avaliani said.

"Deep tech is engineering a legacy of excellence with companies, creating economic growth and innovations right across the UK that are pushing the boundaries of what’s possible.”

Emma Woollacott

Emma Woollacott is a freelance journalist writing for publications including the BBC, Private Eye, Forbes, Raconteur and specialist technology titles.