Only 14% of African tech startup founders are women; here are the reasons and possible remedies

A Startup Genome survey has revealed that only about 14% of African tech startups have female founders, demonstrating that women remain in the minority among tech company founders on the continent.

Between September 2016 and November 2022, the poll had 5,469 respondents from 67 global ecosystems. These respondents are technology startup founders; only 31% reported having at least one female founder, while the average female founders in an ecosystem are only 15%.

Continental breakdown

Based on the report, there is no continent in the world where the percentage of female startup founders is closely proportionate to the statistics for the male counterpart. In Oceania, the overall percentage of female founders is 21.6%, which was heavily influenced by 43% of founders in Brisbane being female.

The next is North America, with an average of 15.7%. This percentage was also influenced by the 31% of founders among the Chicago startups surveyed being women. Followed by Asia at 14.9%, even though its technological capabilities have expanded rapidly.

According to a report by Financial Times, the Asia region’s global share of startup investment (including venture capital investment and initial public offerings) increased from only 16 per cent in 2006–08 to 40 per cent in 2017–19, accounting for 43 per cent of global growth.

The next is the Sub-Saharan African region. The respondents indicated an average of 14%, with Cape Town being the highest in the region at 15.3%. MENA was the region with the lowest percentage of female founders, at just 10%.

In Europe, the response was not any different. Munich reports had only 5.6% of female founders, and although Paris is a globally leading tech ecosystem overall, the average number of female founders indicated by the survey was just 8%. Elsewhere in Europe performed a little better — an average of 24% of founders in Dublin were women.

The numbers from Africa are not good or encouraging enough, and here are some of the causes for the low percentage of female tech startup founders.

Female tech startup founders are simply not enough

The African tech startup ecosystem appears to be one of the continent’s thriving sectors. This could be due to increased internet penetration, technology adoption, and the availability of VC investment financing. However, while it appears to be very promising for continental economic development, there is still the problem of gender imbalance and discrimination.

According to a 2022 African Tech Startups Funding report by Disrupt Africa, only 128 (20.2%) of the 633 funded African tech startups have at least one woman on their founding team, an increase from 121 in 2021, still a percentage drop from 21.5%. This, however, is for the African tech ecosystem only, but these numbers appear to be rather low compared to the rise of women entrepreneurs in the region.

More women are starting and running businesses than ever before. It is part of the economy where women continue to take an active role. Although, most female-led enterprises are small businesses with little opportunity for growth. But, the issue now is, how many of these entrepreneurs are focused on the technology sector?

According to the 2022 Global Entrepreneurship Monitor (GEM) report, almost half of women entrepreneurs surveyed worldwide are involved in the Wholesale/Retail sector, and one in five women entrepreneurs in the Government and Social Services sector (18.5% women compared to the 10.1% men).

However, only 2.7% of women, compared to 4.7% of men, are starting businesses in Information, Computers, and Technology (ICT), the sector that draws the majority of venture capital dollars worldwide.

Gender digital gap, stereotypes, and misogyny

As much as we would like to ignore it, it is one of the main reasons for the lack of female startup founders. With the societal culture and claims on the female gender, most women are intimidated by the male gender, particularly in sectors in which males dominate.

This appears to impact their perception of business owners in that sector significantly. Because it is a male-dominated environment, there have been instances and cases of harassment and gender discrimination, which may cause women to prioritize their safety over their job advancement.

Also, there is a gender digital gap in Sub-Saharan Africa. According to a 2023 report by World Bank, the region has the widest gender gap in mobile internet users globally, a 37% gender gap. This reason and low female digital/financial literacy hinder women from having quality access to digital training.

Reduced funding opportunities

There is seemingly an unequal playing field between male and female founders who obtain funding. When it comes to attracting venture capital funding, female founders confront a more difficult battle than men.

According to an International Labour Organization report, males raise nearly 50 times more venture capital (VC) than women, with men accounting for 93% of VCs. This clearly demonstrates the significant imbalance in the VC funding industry, with women at a greater risk because some investors may invest in their startups at a disadvantage, limiting their ability to innovate in the tech sector.

Also, a joint study by the World Bank’s Africa Gender Innovation Lab (GIL) and Briter Bridges explained that only a small portion of total investment is in African technology (tech) companies. According to an analysis of start-up financing deals since 2013, only 3% of the funding went to all-female founding teams, while 76% went to all-male teams.

Lack of confidence

With all these other issues raised, women seeking to break into the tech sector are weakened and lose confidence before attempting to do so. Most women have an inherent lack of self-esteem. This influences their perception of company ownership.

In Africa, where societal culture has ‘taught’ women their place, stepping into leadership and ownership roles places them on a precipice. They feel like they are on a scale balanced by their power on one side and the fear of failure on the other.

While the room is big enough to explore in the male-dominated tech space, all of these issues create a barrier wall for women who prefer not to try for fear of failure despite having to work twice as hard as men to stay relevant.

Speaking with Alisha Golden, an Investment Manager at Techstars, she said

The conundrum for African women founders in tech lies here. Most likely, the qualities expected to be “successful” in personal relationships, i.e. family, home, tribe, relationships, marriage, etc., are the same qualities that are in stark opposition to the ones needed to thrive as a leader and venture builder.

Another female founder who has grown her business in the health tech sector in Nigeria said, People want to do business with people that look like them; that might be why many women do not have that fundraising opportunity, regardless of their efforts.

Read Also: 5 VC firms investing in early-stage African tech companies

The way forward

More funding: Investors will most likely need to drive this diversity shift by investing more in African women and, more significantly, female entrepreneurs in general. A report by The Big Deal shows that investors play a huge role in closing these gaps.

According to the report, female-led start-ups in Africa raised $188m (4%) in 2022, while male-led ventures raised $4.6bn (96%). This shows 25 times less funding invested in female-led start-ups in 2022 than in their male-led counterparts.

Mentoring: A certain kind of positive perception comes with representation in society. Based on the very low percentage, it obviously shows that women have been underrepresented in tech for years, So there is a need for mentoring and support network programs to advance women in tech.

The 14% of African female tech founders who have experienced challenges in their journey and overcame them should be willing to share their knowledge and expertise with others. This will help provide guidance, support, and encouragement to women, giving aspiring female founders a boost to succeed in their careers.

Educational opportunities: Closing the gender digital divide may seem impossible, but it is doable. Parity is within reach by increasing women and girls’ connectivity, making digital tools more available and affordable, and providing them with the skills they need to lead and succeed.

The advancement of ICT can influence and improve women’s digital standing in society. This, in turn, will broaden their minds to various opportunities in the tech industry and help them understand that they can succeed in the industry and contribute by providing tech-enabled solutions to societal problems.

Alisha Golden says, “All in all, there are three key areas for growth to gain parity in the foundership of African tech startups. One, policy needs to reflect the world we want to see. Women need to have agency legally to rise, and this encompasses a wide range of subject areas like equal pay etc.” 

Two, we as a society have to create space and allow for the agency of women leaders in our communities, households, and workplaces. We need to encourage both women and girls that the qualities that will make them great leaders will not isolate them in the groups they are anchored in; culture, community, and family.

And lastly, we need more women partners and key decision-makers at venture firms (in addition to male allies committed to this same cause) who can lead and advocate for deals that propel women tech founders.

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