Female business founders in London have dropped by almost 50% between 2023 and 2024, recent data from Instant Offices has shown.
This comes after London saw a near 30% decrease in female founders between 2022 and 2023.
Despite a governmental push for UK female entrepreneurs to increase by around 600,000 by 2030, female founders in London have dropped by more than 14,000 between 2023 and 2024, a staggering decline of 48%.
Numerous factors can lead to heightened difficulty for female business founders within their industries.
These include that women are less likely to receive funding for their business ventures compared to men, mounting childcare costs, impact of maternity leave, as well as research that shows the “motherhood penalty”, which makes up 80% of the gender pay gap.
The motherhood penalty is recognised as the career and wage disadvantages women experience in their industries once they become mothers.
Tash Gorst is the founder of Gather, a zero-waste, sustainable store located in Peckham.
Gather is a multi-award winning store which prides itself on selling plastic free dry goods as well as eco-friendly alternatives to everyday items.
In 2024, Gather ed forces with BYO, another store which focuses on eco-friendly living and sustainability.
Alongside being a dedicated, hardworking business owner, ex-civil servant Tash became hyper-aware of the human impact on the world around her when she became a mother.
Tash said: “I became very ionate about the state of the planet and really concerned about the planet I was leaving my child.”
Aligning with the “motherhood penalty”, Tash claimed it to be near impossible for mothers without around them to start businesses.
Tash said: “It relies on you having those people around who can help, and if you don’t have them, no way you’re going to set up your own business if you’re a mum because you can’t look after your child and run your business all the time, both of those are full-time jobs.
“Because it’s a brick and mortar business, my husband had to be the primary caregiver for our child for several months because I was very busy physically making stuff or putting stuff in the shop.
“So I could not have done that without a partner.”
Funding disparities between female-owned vs male-owned businesses
Data on early stage and latter stage funding for UK business start ups has shown a large gap between female and male owned businesses in the UK.
On average in 2023, female-owned business start ups in their first five years of operation received £763,300, compared to male-owned start ups which received £4.34 million.
This meant female-owned startups received approximately 82.4% less, or nearly six times less funding than male-owned startups on average in 2023.
Whilst funding for female businesses in 2024 did increase to £1.05 million in 2024, this was still only 17% of the male-owned funding at £6.2 million.
Additionally, according to a government research report on information derived from the British Business Bank Small Business Equity Tracker 2023, for every £1 of equity investment in the UK, just 2p goes to fully female-founded businesses, representing no improvement in the past decade.
This investment disparity is contributing to a widening gap between female and male business startups.
Mounting childcare costs
Whilst allowing for more flexibility in the hours she worked, Tash noted that being her own boss has led to less security financially.
Additionally, she said that business owners in London, specifically mothers, are up against ever growing childcare costs.
She said: “Childcare is expensive in London.
“It depends how your business is going, but if you start off in the early days, it’s risky.
“And the idea of having to spend lots of money on childcare is not doable.”
As of 2023, the average hourly cost of full-time childcare in London is around £7.16.
Presuming parents or guardians work 50 hours per week, this amounts to £357.93 weekly in childcare costs for children under the age of two.
This makes London the most expensive region for childcare fees in Great Britain.
Whilst Tash discussed the difficulty for mothers starting their own businesses in London, she noted the importance of female business networks.
She said: “It can be lonely running your own business and finding your networks of other people.
“Having other female business owners around you, even if they may be in different sectors. makes a massive difference because then you can talk and get advice from each other.
“That makes a massive difference, people who understand what it is to run your own business.”
Effie Bersoux is the CEO and founder of GrowthGirls, a dynamic growth marketing agency that blends creativity with data-driven strategies to accelerate business expansion.
The agency focuses on areas such as customer acquisition, revenue growth, inbound marketing and social media strategy.
Effie said: “I have seen first hand the systemic challenges that women in business continue to face, from funding hurdles to the invisible tax of societal expectations around motherhood.
“The decline in women-owned businesses across London is sadly not surprising. It’s an indictment of a system that continues to fail women.”
The ever present gender pay gap and so-called “tax” on motherhood is something Effie deals with first hand.
She added: “People love to say women are ‘risk-averse’, but the truth is that years of pay inequality and systemic bias have left women with less financial security to take risks in the first place.
“Add the massive funding gap, where female founders still get crumbs compared to male founders, and it’s no wonder fear of financial loss becomes a paralysing barrier.
“Beyond the financial barriers, there’s an emotional exhaustion too. The constant battle to justify our ambition, our expertise, and even our existence at the top.
“It eats away at confidence and, over time, can drive brilliant women out of the game.
“We need structural change, intentional investment in female founders, and flexible, modern workplace policies that don’t punish women for choosing motherhood.”
Featured image courtesy of CoWomen via Unsplash.
