The Rise of Female-led Startups in Africa and their Struggles

The race to bridge the gender inequality in Africa’s corporate space is a marathon, and many women who are already on the track are far gone. The push for the womenfolk in the boardrooms and leadership positions has given rise to female-led startups on the continent but the drive became more intense after the Global Gender Gap Report 2020 revealed that the gender gap may not be closed anytime soon.

Going by this report, based on the current rate of progress in the growth of female entrepreneurs, it will take 100 years to achieve gender equality. This means none of us will see gender parity in our lifetime unless there eventually is a more radical approach to the agitations.

Interestingly, more women have attained historic positions in corporate and government organizations since that report. From Kamala Harris emerging as the first female and first black vice president in US history to Ngozi Okonjo-Iweala becoming the first Woman and first African to head the World Trade Organization (WTO).

One of the major challenges that women in business have had to deal with remains funding, as investors are more eager to back men-led ventures or a business with at least a man co-founder.

In 2019, only 2% of all global venture capital (VC) investments was allocated to female-founded or co-founded businesses, and just 12% of global VC went towards supporting companies where at least one woman was in a senior management role. It is interesting to know that the figures for Africa are marginally better but still depressing.

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Less than 6% of all VC funding went to businesses with female founders in 2019. According to Briter Bridges report, the figure even declined in Q1 2020 – women startups raised only about 3.2% of the total funds raised by African startups in that quarter.

As of last year, there were over 640 active technology hubs across the continent and the startups raised almost US$500 million in funding in 2019 – year-on-year growth of almost 50 percent, according to Disrupt Africa. Topping the list were fintech startups, who raised $107.4 million in 2019 – enjoying 25 percent of all funding…

Read the full piece and more insightful features like this in our latest issue below. Find it on page 92.