The ScaleUp Institute’s inaugural Female Founder Scottish Index has revealed that while the growth of Scottish scaleups founded or co-founded by women is outpacing the UK national average, challenges remain in areas including access to investment, talent, and support.

The research identifies 139 female-founded scaleups in Scotland, businesses generating in excess of £10 million in revenue or £5 million in assets, collectively generating £1.5 billion, and employing over 16,000 people, with 47% of the businesses based outside of Glasgow and Edinburgh.

The findings of the Female Founders Scottish Index were outlined at the Pathways Forward ‘Pathways Pledge’ annual review in Edinburgh. Over 40 organisations have now signed up to more than 100 pledges aimed at driving gender diversity and addressing the needs of female entrepreneurs.

Despite growing at around twice the UK national average and ranking 7th out of 12 UK regions for the overall number of female-founded scaleups, around 80% of female founders who are scaling businesses identified a perceived lack of support, compared to only 40% of male-led businesses.

According to the data, female founders see particular gaps in support around access to talent, non-executive directors, markets, and investors.

Findings of the Scottish Index also indicated that scaling firms led by women have raised £117 million in equity investment to date, an increase of approximately 80% since last year. However, the report notes that the funding is invested in a relatively small number of the businesses in the Index.

ScaleUp Institute CEO Irene Graham said: “It is terrific to see the growth and longevity of female founded and co-founded scaling businesses in Scotland and the strength not only in traditional but industrial sectors.

“It is clear that the Pathways Pledge remains as vital as ever as we seek to address long established scaleup gaps and access to funding and markets that Scottish female founders need.

“There is significant opportunity for our Scottish female scaling entrepreneurs. They are clear about the actions needed to further propel their growth, which we must continue to act on.”

Ana Stewart, Founder of Pathways Forward and Scotland’s Chief Entrepreneur, said: “The report marks an important step forward in understanding how female founded businesses are scaling and where we must go further, but the data also tells a more challenging story.

“Investment remains concentrated in a small number of firms.  Many continue to rely on bootstrapping and traditional finance rather than growth equity.  So, we must widen access to growth capital and increase the participation of women across the investment landscape …

“What is notable … is that we have so many incredible women-founded businesses here, they are growing quickly, and we should all be encouraged by this as it will ultimately lead to increased economic benefit for Scotland.”

Deputy First Minister Kate Forbes said: “The Female Founder Scottish Index highlights significant achievements of our women-led businesses growing and developing in Scotland, the incredible talent that lies behind these success stories and the clear economic opportunity that will come from ensuring we help more businesses to scale up, attract further investment and stay and flourish in Scotland.

“This valuable analysis also shows there is more to do to support female founders. The Scottish Government stands squarely behind the excellent work being undertaken across the public and private sectors to get to the heart of tackling under-representation in our business community but this must serve as a call to arms to accelerate our efforts.

“It must be our collective mission to continue to break down barriers for women in business and provide the right support to ensure we unlock their full potential.”