Female Founders in Crypto: A Deep-Dive

Ethan Yip, 09 March 2023

The blockchain and cryptocurrency industry has seen rapid growth cycles since its anonymous introduction to the world in 2009 by Satoshi Nakamoto—the pseudonym under which Bitcoin’s white paper was released. Since then, an array of blockchain and cryptocurrency-related companies have emerged in the UK, all with the aim of disrupting long-established industries, such as healthcare, law and financial services. 

The sector is said to need help with promoting diversity, despite the fact that recent studies have suggested that blockchain-related companies with mixed-gender teams were actually more successful than their all-male counterparts. 

So, where do the high-growth companies in the UK’s blockchain and cryptocurrency industry stand? In this article, we set out to examine the founding teams of these companies and assess the impact of gender on the success of these businesses.

The state of play in the UK’s high-growth ecosystem

The UK is home to 386 high-growth blockchain and cryptocurrency-related companies. Of these companies, 242 (62.7%) are at the seed stage and 90 (23.3%) are at the venture stage—emphasising the sector’s developing nature. 

The sector is said to be a male-dominated field, with 84.3% of businesses in the sector consisting of entirely male founding teams. And just 15 (4.36%) of blockchain and cryptocurrency-related companies in the UK founded by an entirely female team. 

The lack of female founders in the sector suggests that there are barriers women face when trying to start a business in such a male-dominated field. These challenges—which include a lack of access to funding and a lack of female role models—are impeding their progress in the sector. These difficulties are certainly not easy to overcome, even more so in the unforgiving startup environment. Previously, we’ve found that just 23% of companies scale in their first five years and this may only be accentuated by cryptocurrencies’ high-risk reputation. The question is then, how are female founders faring in the current landscape, and what impact does founder gender have on a company’s success in the sector?

Breaking down the success of cryptocurrency companies

The sector has seen rapid growth in recent years; between 2015 and 2022, cryptocurrency and blockchain-related companies have seen the value and number of equity investment deals rise dramatically. The value of these deals rose from £21.1m in 2015 to £828m in 2022, and the number of equity rounds rose from 13 to 172 in the same time period.

When considering the gender breakdown of the founding teams that received funding, it’s apparent that those with a mixed-gender team were more likely to receive equity investment. Of the companies with a mixed-gender team 97% had received equity investment, 87% for all-male founding teams. However, of the all-female teams just 60% received equity investment. This data suggests that all-female teams are struggling to get that crucial initial funding to gain a foothold in the ecosystem. This may be affecting whether these companies are able to scale effectively, with just 23% of companies with all-female founding teams progressing beyond the seed stage. Meanwhile, the figures for all-male and mixed-gender teams are 33% and 31% respectively. 

Despite this, when considering the companies that do receive funding, 78% of all-female founded companies received follow-on funding more frequently than their male counterparts (56%). However, mixed-gender teams were the least likely to receive follow-on funding, with only 47% doing so. These statistics suggest that, while female founders may face significant challenges in accessing funding in the crypto/blockchain industry, once they do receive funding, they may be more likely to attract further investment than their male or mixed-gender counterparts. 

It’s also worth noting that there are significant differences in fundraising outcomes depending on the gender composition of the founding team. In the high-growth ecosystem, blockchain and cryptocurrency-related companies founded by an all-male team had a median fundraising value of £368k, while mixed-gender teams had a slightly higher median value of £390k. However, all-female teams had a considerably lower median fundraising value of £287k. This could show that female-led companies are more efficient and effective in their use of their funding, however, on the flipside this gap could highlight that for female-led companies there are still underlying biases in this sector.

Does the gender of the founding teams matter in crypto?

The blockchain and cryptocurrency sector is growing rapidly in the UK, but the lack of diversity is certainly a concern, particularly regarding female representation. While the sector is male-dominated, our data suggests that companies with mixed-gender teams are more successful than all-male teams in terms of equity funding received. They are more likely to receive equity investment, they rank similarly when it comes to receiving follow-on investment and mixed-gender teams have a greater median fundraising value than their all-male counterparts. 

To recap, only a small number of companies in the sector are founded entirely by women, indicating yet more barriers to entry for women. Female-led companies receive less initial funding than their male counterparts, but once they do receive funding, they are more likely to succeed and attract follow-on investments. 

The value of promoting gender diversity is clear: it can drive innovation, growth and capital into the sector. Our findings have demonstrated that the sector could significantly benefit from greater gender diversity—and steps should be taken to do so. 

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