by Daphney Klopper
“Africa: The Big Deal” serves as a vital resource for understanding the dynamics of start-up funding in Africa, providing stakeholders with the data and insights needed to make informed decisions and foster a more inclusive and vibrant entrepreneurial ecosystem. Compiled by Max Cuvellier Giacomelli and Maxime Bayen, the report covers various types of funding, including equity, debt, and grants, but excludes exits. Despite the influx of capital into African start-ups, the gender disparity in funding remains stark and troubling. In 2024, less than 5% of the funding has gone to start-ups with a female CEO, a decline from 5.6% between 2019 and 2023. This trend is even more pronounced when examining the gender composition of founding teams. Only 1% of the funding went to all-female founding teams, down from 2.1% in the previous years, and 9% to teams with at least one woman, a significant drop from 17%.
Celebrating the Few
While the overall picture is bleak, there are a few notable exceptions. Carrol Chang, the new CEO of Andela, stands out as the only female CEO among the top 30 most-funded start-ups in Africa. Other female leaders include Cikü Mugambi of Kobo360, Anu Adasolum of Sabi, and Belinda Shaw of Cape Bio Pharms. These women have managed to break through the barriers, but they are the exception rather than the rule.
The Root Causes
The reasons behind this disparity are multifaceted. One significant factor is the pervasive bias in the investment community. Investors often have preconceived notions about the capabilities of female entrepreneurs, leading to a lack of confidence in their ventures. Additionally, women frequently face challenges in accessing the same networks and resources as their male counterparts, which are crucial for securing funding.
Source: Africa: The Big Deal by Max Cuvellier Giacomelli and Maxime Bayem
Investors: Reflect on Your Choices
To the men and women with the capital and influence in the investment community, it’s time to reflect on our choices and consider the impact of our decisions. Why are we not investing in women? What biases might be influencing our investment strategies? Here are some points to ponder:
Awareness of Biases: Are you aware of any unconscious biases that might be affecting your investment decisions? It’s crucial to recognize and address these biases to ensure a fair evaluation of all potential ventures.
Investment Opportunities: Where are you looking for funding opportunities? If your default is to invest in male-led start-ups, ask yourself why. Could it be due to a lack of exposure to female entrepreneurs, or perhaps a reliance on traditional networks that predominantly feature men?
Evaluating Potential: Are you giving female-led ventures the same level of consideration and support as their male counterparts? Women have innovative ideas and the drive to succeed, but they often face additional hurdles in securing funding.
Impact of Diversity: Numerous studies have shown that diverse teams perform better and drive greater innovation. By investing in female-led start-ups, you are not only supporting gender equality but also potentially enhancing the success and profitability of your investments.
Creating Inclusive Networks: Are you actively seeking to build and support networks that include female entrepreneurs? Expanding your network to be more inclusive can open up a wealth of untapped potential and opportunities.
Challenging the Status Quo: It’s easy to fall into the pattern of investing in what feels familiar and safe. Challenge yourself to step outside of your comfort zone and consider the broader impact of your investment choices.
The Way Forward
To address this imbalance, we need to take several steps. First, we must educate investors about the potential of female-led ventures and the importance of diversity, which can help shift perceptions and encourage more equitable funding practices. Providing mentorship and support to female entrepreneurs is also crucial, as it helps them navigate the challenges of the start-up ecosystem and increases their chances of success. Additionally, governments and regulatory bodies should implement policies that promote gender diversity in entrepreneurship and funding. Finally, we need to build networks that are inclusive and supportive of female entrepreneurs, helping them access the resources and connections they need to thrive. By taking these actions, we can work towards a more inclusive and equitable start-up ecosystem in Africa.
In Closing
The current state of funding for female-led start-ups in Africa is a call to action. While it is encouraging to see capital flowing into the continent, it is disheartening that so little of it is reaching women. We must do more to support female entrepreneurs and ensure that they have equal opportunities to succeed. By addressing the biases and barriers that exist, we can create a more inclusive and equitable start-up ecosystem in Africa.
Thank you to Max Cuvellier Giacomelli and Maxime Bayem for highlighting these critical issues in their report, “Africa: The Big Deal.” It is only by acknowledging and addressing these gaps that we can hope to see real change.
Daphney Klopper is a dynamic leader in the property industry and a passionate advocate for diversity, equity, inclusion, and belonging (DEIB). As the Founder and Director of The Hive, Accelerating Women in Business in South Africa, she empowers women and drives change. With qualifications as a Principal Property Practitioner (NQF 5) and Property Practitioner (NQF 4), and studies on Leading Diversity and Inclusion at Work from UCT, Daphney brings a wealth of knowledge to her roles. She serves as the Property Sector Lead for the Western Cape at WECONA, the Women’s Economic Assembly, and is a member of the Woman in Property Network (WPN) and the Cape Chamber of Commerce (CCOC). Daphney has led The Hive, focusing on accelerating women in business.
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