Help women set up, scale up tech start-ups
Mr Eric Mutwiri, an economist, who is supporting handicraft enterprises in North Imenti samples some of the baskets made by women groups under Tharaka Green Gold CBO.
The theme for this year’s International Women’s Day, which we shall observe on Wednesday, March 8, is “DigitALL: Innovation and technology for gender equality.”
As a professional in the innovation and technology space, this theme is of particular interest to me because of the explicit under-representation of women in nearly every aspect of the industry. I will tackle one aspect today; the gender inequality in venture capital and start-up financing in the African continent.
While the African tech sector continues to attract billions of dollars in startup financing – around US$5 billion in 2022 – women in the industry have little to celebrate about. According to a 2022 Africa Investment Report by Briter Bridges, only 4.7 per cent of total venture funding went to all-female co-founded teams, a stark – and frankly shameful – difference compared to the 85.4 per cent that went to all-male co-founded teams.
This means that even as the African tech space continues to attract massive funding from both overseas and local investors, we are still playing with half the team and we need to collectively pull together to bring more women to the table.
Confidence gap
One of the main barriers preventing female start-up founders from accessing this US$5 billion cake is the ‘confidence gap’ between male and female founders. A 2021 study by World Bank’s Gender Innovation Lab and Briter Bridges found that female start-up founders were shy or ‘less confident’ about pitching their startups to investors.
This is in spite of the fact that female founders were more educated than their male counterparts and have the same level of industry experience – if not more -– as the male founders.
So how do we close this gap? Two things.
First, we must push for more intentional investors and funds that will specifically support female-founded African startups. The 2022 Africa Tech Venture Capital report by Partech shows that Africa attracted 1,149 unique investors in the African Tech industry.
How many of these investors are intentional about investing in female-led startups? Last year, Mastercard Foundation committed US$200 million through the Africa Growth Fund to support early-stage SMEs, particularly those led by young women. We need five more similar funds launched in 2023 to support women in the African tech sector.
The second strategy is to bridge the confidence gap between female and male founders. You already know this oft-cited statistic from that famous Hewlett Packard internal study: ‘Men apply for a job when they meet only 60 per cent of the qualifications, but women apply only if they meet 100 per cent of them.”
We need to build the confidence of female founders by mentoring and supporting them to pitch to investors and giving them candid feedback to help them improve.
We also need more allyship with male investors and successful male founders who will put their money where their mouths are and invest in African female start-up founders. I will end with a brilliant quote from Herta von Stiegel, “It takes enlightened men and brave women to change the world.”
Dr Chege is a media, innovation and technology researcher; [email protected]
