There is no disputing the fact funding of women-led startups in Africa is extremely low when compared to that of men-led startups. In 2021, the share of investments invested in female-owned startups stood at about 6.5%, which means that just $1 in every $15 raised in the African startup ecosystem went to women-owned tech startups.
In a bid to close this wide gap between male-owned and female-owned tech startups in Africa, Ethiopia-based tech African women (TAW), recently launched a program that seeks to take startups from the idea stage to operational.
The program, which is spearheaded by the United Nations Economic Commission for Africa (ECA), in partnership with Betacube, has invited all idea stage women-owned startups from Ethiopia, Tunisia, Senegal, and Tanzania to submit their applications to join.
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The program’s main objective is to empower Tech startup female founders to leverage their skills in order for them to build strong tech startups, accelerate project ideas into validated business models, and develop alliances between different African ecosystems.
The program will offer entrants access to a pool of tech developers and designers who will work to support and mentor their teams, as well as experts in marketing and finance. The program will last for a period of five (5) months, which runs from August to December, and will include training boot camps and pitching competitions, coupled with a two-month online incubation program for the best two startups from each country.
In Africa, Kenyan women tech startup founders have been reported to attract the most funding on the continent. After a careful observation as to why women-owned startups receive less funding, experts disclose that most of the female-owned startups in Africa are concentrated in non-contact sectors, as they are usually inclined towards sectors such as Health tech and edtech which has been attributed to be one of the major reasons why they do not attracting high funding.
Also, there are underlying biases and beliefs that women-driven ventures represent a riskier bet, and few women incubation programs were among other factors that make it difficult for female founders to attract investments.
Few experts disclosed that female-led startups are also less likely to be pitched for equity financing due to low confidence in their ability to pitch to investors on the growth prospects of their ventures. Instead, most of them have been reported to follow different financing paths, with a preference for bank loans retained earnings.
Although male-owned tech startups continue to receive the most funding in Africa, women founders have been disclosed to perform better, as technology firms led by women experienced a 35% higher return on investment than those led by men.
Experts disclose that investors and other venture capitalists who hold strong biases against female-owned startups, lose out by not providing financial support for women-led startups.
However, It is interesting to note that against the backdrop of a funding boom for African startups, women-led startups have witnessed a dramatic increase in investment and financing in 2022. Investments made into African female-led startups have reportedly grown nearly seven-fold over the last three years.