Femtech product companies founded by women are less likely to receive investment compared to similar companies founded by men, a new investigation has revealed.

The work, carried out by researcher Ludovica Castiglia in partnership with FemHealth Insights consultancy firm, found that, on average, female-founded femtech companies in the UK, US and Canada have raised 23 per cent less capital for each deal compared with similar, male-founded companies.

On average, femtech companies exclusively founded by women receive 28 per cent of venture capital funding compared to 38 per cent for similar companies founded entirely by men. Just over one-third of funding went to companies founded by mixed-gender teams.

Furthermore, female founders are less likely to secure funding if they use advocacy words in their funding applications, including phrases like ‘women’s rights’, ‘take control’ or ‘freedom’, the analysis showed. Meanwhile, male femtech founders benefit from increased investment if they use the same words.

Castiglia analysed 1720 funding agreements made by 513 venture-backed femtech companies in the UK, US and Canada. She found that the most damaging thing a female founder can do is use words in their funding pitch or company publicity that suggest they champion their product’s cause.

Examples of these words include ‘dignity’, ‘discrimination’, ‘empower’, ‘equality’, ‘feminism’, ‘gender gap’, ‘inclusive’ and ‘social change’.

She suggested that funders looking at female founders of women-targeted companies tend to attribute them with ideological rather than economic motives.

“This may happen because women advocating for women’s rights are seen as being emotional, upset and angry rather than businesspeople maximising profits,” she said. “Men, on the other hand, get more funding if they use the same words, perhaps because investors see it as self-interested advocacy, and so proof of their economic acuity.”

Speaking to The Guardian newspaper about the research, Ms Castiglia said: “The depressing message is that even when you’re working in an area where 75 per cent of companies are founded by women, and you’ve developed a product aimed specifically at women, having a woman on your founding team – even when she’s paired with a male counterpart – damages your chance of getting funding.

“Instead of regarding female entrepreneurs in one of the most female-dominated sectors in the startup world as a positive, potential investors frequently see them as a negative and withhold funding as a result.”

Ms Castiglia also conducted an online experiment, submitting investment pitches from fake identical start-ups with founders of different sexes.

“When the femtech idea was pitched by a woman, the investor admitted they saw the founder more as a feminist who prioritised social impact at the expense of financial returns than the man,” she said. “This perception may explain why investors tend to award less funding to female funders of femtech companies.”