- Focus shouldn’t be on women-only initiatives or women-specific conversations alone.
- It should be on initiatives and conversations centred around all start-ups, where women are considered as equals
Image: STAR ILLUSTRATED
Africa’s technology start-up scene is vibrant – and growing fast. There are currently more than 640 active technology hubs across the continent. According to Partech Africa, start-ups raised $1.163 billion (Sh165 billion) in equity funding in 2018 – a 108 per cent year-on-year growth. Topping the list are fintech start-ups, who raised $132.75 million (Sh13.4 billion) in 2018 – enjoying 39.7 per cent of all funding.
Despite this momentum, however, there’s a concerning trend: Globally, women-led start-ups only receive two per cent of all venture capital funding – and the picture within enterprise tech is dimmer. Additionally, of all start-ups, only 22 per cent are founded by at least one woman. Africa-specific data is lacking, but sources suggest only nine per cent of start-ups have women leaders, and female-led South African start-ups receive only 4.5 per cent of all funding.
Female-led start-ups are in short supply. And, where they are available, they often lack the investor backing to scale. The result is a significant loss of insight, perspectives, development and solutions, which affects us all.
African tech start-ups are renowned for building solutions to some of the most complex challenges. N-Frnds brings the power of digital to subsistence and smallholder farmers in Africa and other emerging markets, via mobile. The N-Frnds mobile system, which started in Rwanda and since expanded dramatically, is text/sms-based and connects users without the need for data. Users receive vital crop and market information and get access to finance.
Smallholder farmers account for 80 per cent of all food consumed in Africa, the Alliance for a Green Revolution in Africa estimates. Giving these farmers access to increased market opportunities establishes them as micro-enterprises, which is where the majority of economic upliftment and job opportunities still reside.
Studies show that start-ups with at least one female founder raise, over time, 21 per cent more VC funding than companies with all-male teams. Similarly, research also shows that if women and men participate equally as entrepreneurs, global GDP could rise by approximately three to six per cent.
Technology like this is set to completely redefine the way we interact with the world. But if technology is only being created by a portion of the population, how effective will it really be? Without the input and contribution of women, how many challenges and opportunities will go unnoticed, or only partially met?
Microsoft recently partnered with Sehat Kahani, a telehealth start-up founded by two women, Dr Iffat Zafar and Dr Sara Khurram, in Pakistan. As doctors themselves, they noticed a recurring “doctor-bride” trend, where only 23 per cent of female medical graduates in Pakistan become registered physicians. The others either move abroad, or stop practising after marriage due to sociocultural pressures and household responsibilities. Yet, Pakistan is in desperate need of doctors, with a doctor-patient ratio of 1:1,200.
Sehat Kahani developed a platform that pairs these female physicians with patients in need of healthcare. Patients receive affordable and quality care virtually using telemedicine, while female physicians are able to remain active, working at home on their own hours to effectively balance family life.
If it weren’t for these two women entrepreneurs, this challenge, opportunity and approach could have been missed entirely.
Diversity in business doesn’t just yield better innovation, but better financial results too, as mixed teams are better able to recognise and capitalise on market opportunities.
Investors recognise the need for diversity in the long-run, which makes the lack of early-stage funding for female start-ups perplexing. Studies show that start-ups with at least one female founder raise, over time, 21 per cent more VC funding than companies with all-male teams. Similarly, research also shows that if women and men participate equally as entrepreneurs, global GDP could rise by approximately three to six per cent.
Diversity in business doesn’t just yield better innovation, but better financial results too, as mixed teams are better able to recognise and capitalise on market opportunities.
So, the question becomes: What is needed to encourage more women to start businesses, and investors to take bigger bets on them earlier?
Firstly, female entrepreneurs need to be given equal access to the tools needed to succeed as their male peers, including access to finance, technology, markets, information, skills and services. Second, and as a partial solution to the first, investing in diversity starts with having a diverse team of investors. Start-up mentors, investors, pitch competition judges and all ecosystem players should come from diverse backgrounds, able to recognise, relate to and see the potential in different challenges and opportunities.
Last year’s Africa Seedstars Summit had a dedicated focus on female entrepreneurship, which is a positive step forward. However, the focus should not be on women-only initiatives or women-specific conversations alone, but on initiatives and conversations centred around all start-ups, where women are considered and treated as equals. Diversity and inclusion are not an initiative, they’re a lifestyle.
Partners and Start-ups Strategy Lead at Microsoft 4Afrika