Female-led firms under-represented in Africa’s venture capital funding

female founder startups

Women are still under-represented in Africa’s startup ecosystem when it comes to venture capital investment (VC), figures from Briter Bridges have shown.

According to the report, between January 2019 and April 2020, only 13.4% of the 276 disclosed deals went to companies with at least 1 female on the founding team. This figure represented only 5.7% of the total invested capital in Africa.

The latest report from Biter Bridges, which focuses on participation, funding and support for women entrepreneurs in Africa, also found that VC funding going to startups that are fully founded by women in Africa declined by 3.2% in 2020.

female founder funding
Source: Briter Bridges

The survey was conducted on 2701 co/founders and c-suite executives from 1904 companies operating in Africa with their headquarters in 70 countries around the world. Surveyed companies represented a broad range of sectors including agriculture, fintech, cleantech, logistics, and education.

Out of the sample, only 16.5% of the respondents are women perhaps showcasing how difficult it is for women to participate in the African startup ecosystem.

Commenting on findings, Lisa Width, Co-head of Research at Briter Bridges said:

The sample examined in our research reveals a large discrepancy in the participation of female co/founders in the green and digital solutions ecosystems. Low figures are also discovered for the number of female co-founded companies receiving funding since last January, reflecting both lower participation rates in technology-driven businesses, and possibly also constraints to funding caused by socio-cultural and financial barriers.

One of the entrepreneurs interviewed in the report, Kitawa Wemo, noted that women have long been excluded from the tech start-up space due to traditional norms and cultural practices.

“If I were to apply to a loan, as a woman under 30 without a husband, I would be profiled as high risk to financing. In a business setting, it is clear that the system has already sidelined you.” She says that her company Mama Ventures is working to solve this problem by providing a toolkit designed to up-skill female entrepreneurs as well as supporting them on how to grow revenue and attract funding.

Wemo’s comments are shared by Seynabou Thiam Monnier, project manager at Women in Africa (WIA) Initiative, who adds that women are disproportionately disadvantaged when it comes to science and technology access. Seynabu is however, optimistic that the situation is slowly changing despite the challenges.  

Access to funding is a major challenge that many female founders in Africa face. Joanna Bichsel, founder and CEO of Kasha, notes that the difficulty of finding capital can take a huge toll on the psycho-social well-being of women. She, however, emphasizes that having connections is critical to securing investment.

Joanna explains further that the key ingredients to any start-up becoming “investor ready”, regardless of gender, are time, experience, and confidence.

In another survey result, only 8.7% of surveyed companies had fully-female founding teams, suggesting the rarity of all-female founder firms in Africa. Also, 144 companies had a female sole-founder and 23 with co-founding teams comprising two or more women.

In terms of funding, female-led start-ups in the health sector appeared to attract the most investment, representing 27% of deals going to women. However, most of these deals are done in three countries; Nigeria (25.4%), Kenya (5.5%), and South Africa (8.3%).

Note: This story was updated on 22/05/2020 to add comments from Lisa Width, Co-head of Research at Briter Bridges.

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About the author

Vincent Olago

Vincent Olago

Vincent Olago is the Managing Editor of Ledger Africa and has been active in the blockchain space for three years now. He's passionate about entrepreneurship and the potential of disruptive blockchain technologies to reshape our world. He supports startups to tackle blockchain challenges, address strategic problems and optimize growth.