“Female-powered” businesses in the UK are attracting increasingly large amounts of investment but also suffer more dilution of ownership than their male counterparts.

A new review of the sector published today ranks Ooni Pizza Ovens of West Lothian among the UK’s fastest-growing businesses led or majority-owned by women, or those where at least 50 per cent of the management team are female. According to the report – produced by private equity bank JP Morgan – there are 10,647 high-growth businesses in the UK that meet this definition, 739 of which are in Scotland.

They attracted a record £5.05 billion in equity investment last year, including a total of £93.7 million raised across 77 deals in Scotland. However, these female founders surrender significantly more control of their companies than men in exchange for this funding.

“The data shows us that when female founders do raise equity, they give up a larger percentage of their ownership than male founders,” said Charlotte Bobroff, senior advisor at JP Morgan Private Bank.

“In fact, the rate at which women own less of their companies as equity investments increase is almost twice that of men, a 25% reduction compared to 13%.

"This reflects several dynamics affecting female-powered businesses, including a more challenging fundraising landscape and a lack of resources, exacerbating the effect of equity financing.”

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Co-founded by Darina Garland and Kristian Tapaninaho, Broxburn-based Ooni is ranked 30th in this year’s list of fastest-growing female firms.

With teams in the USA and Cologne, the company has expanded from just 40 employees at the start of the pandemic to a current headcount of nearly 300. Demand for its portable outdoor pizza ovens soared during lockdown, leading to a 300% surge in revenues to £52.7m in 2020 alone.

This is the second year JP Morgan has produced its top 200 report. Since the first one was published in April, nine of the businesses in the original report have moved out of private ownership. Three achieved a flotation and six were acquired after collectively raising more than £336m in equity.

High-growth businesses in the UK that are led or owned by women currently generate £84.7bn in sales and employ nearly 700,000 people. However, staff numbers have fallen since the start of the pandemic.

“Whilst more than 30% of high-growth companies powered by women reported increasing employment more than 20% over the last decade, employment growth versus men during the most recent filing period decreased nearly 42%,” Ms Bobroff said.

“Whilst disappointing, it comes as no surprise that Covid-19 disproportionately impacted women, falling at a faster pace than male employment globally.”

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The sectors that make up the largest proportion of female-powered growth are businesses that also correspond with a large share of women in the sector’s workforce. Although digital businesses account for many companies powered by women last year, it was within industries such as clothing, shops, healthcare and e-commerce that female-led business excelled against the wider market.

Within emerging sectors, artificial intelligence (301), fintech (224) and educational technology (184) had the largest number of female-powered businesses, while the largest number as a percentage of high-growth businesses were the sharing economy (36.9%), eHealth (33.7%) and the “quantified self” (32.9%) sectors.

On a regional basis, London accounted for the highest number of high-growth businesses with 3,754 companies. This was followed by the south-east of England (1,431), the south-west (758) and the north-west (775) of England.

Skincare brand Trinny London heads up the list of the top 200 fastest-growing female-powered firms, followed by fashion website VogaCloset, Durham-based employment solutions provider RMS and challenger banking app Starling, which was founded in 2015 by Anne Boden and has received eight rounds of funding totaling £585m of equity.