Female startup founders raised $48 million in 2024, four times less than they managed the previous year, according to Africa: The Big Deal. Those numbers are the lowest on record since it began collating funding data in 2019.
In contrast, male startup founders raised more than $2 billion in 2024. Gender-diverse teams fared slightly better, raising $121 million, while startups with solo female founders or all-female teams received $21 million.
Sub-Saharan Africa has one of the highest rates of female entrepreneurship globally, but that barely reflects in the startup space. Not only are most startups founded by men, but much of the funding goes to men. Even in previous years where funding to female founders has fared better, funding to female founders has typically been less than 5% of the amount raised.
In 2023, for instance, startups with a solo male or all-male founding team raised 85% of the funding, but only 2% went to solo female or all-female founding teams.
While some of the blame can be attributed to female founders starting companies that are not venture-scale, investor bias plays a huge role. With venture capital being a male-dominated industry, female founders have often had to struggle to dispel stereotypes and prove themselves worthy of investment.
To this end, the industry has moved to increase female representation in decision-making roles, but even that has not yielded the results that were hoped for. There's also a lack of understanding on how to raise venture capital, Sarah Dusek, Managing General Partner at Enygma Ventures, once told Techpoint Africa.
"There are very specific rules to it; there are specific metrics that people like me are looking for. There are specific types of businesses that work and those that don’t, particularly with this type of funding. Women are more familiar with taking on debt and grants, and I think there are a lot of unfamiliarities in the space that disadvantage women," she shared.
It's a view that June Angelides, founder of Levare Ventures, agrees with, having attempted to raise capital during her days as a founder.
"Unfortunately, as women, sometimes we sell ourselves short. I'm guilty of it as well. It's something I work on on a regular basis to speak up, to be more confident, but the numbers don't lie in that men are asking for more versus women,” she noted.
Written by Omoruyi Edoigiawerie, a seasoned startup attorney with over a decade of experience. Learn more.
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Despite these discouraging numbers, not all hope is lost. Investors are increasingly realising the benefit of a gender-diverse team. While funds are being set up specifically to invest in female founders, others are taking proactive steps to increase female participation in their portfolios.