Funding to African female startup founders hit a five-year low in 2024, recording the lowest numbers since 2019, according to Africa: The Big Deal. Female-founded startups managed to raise only $21 million, four times less than the previous year. In stark contrast, male startup founders secured over $2 billion in the same period.
Gender-diverse teams performed slightly better, raising $121 million. Sub-Saharan Africa boasts one of the highest rates of female entrepreneurship globally, but this is not reflected in the startup ecosystem. Most startups are founded by men and the majority of funding flows to these male-led ventures.
In 2023, startups with solely male founding teams raised 85% of the funding. Only 2% went to those with solo female or all-female founding teams. Some experts attribute part of the funding disparity to female founders starting companies that are not typically venture-scale, alongside significant investor bias.
The venture capital industry remains heavily male-dominated, presenting ongoing challenges for female founders.
Female startup funding disparity persists
Sarah Dusek, Managing General Partner at Enygma Ventures, said “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.”
June Angelides, founder of Levare Ventures, echoed this sentiment. “Unfortunately, as women, sometimes we sell ourselves short.
I’m guilty of it as well. It’s something I work on regularly to speak up, to be more confident, but the numbers don’t lie in that men are asking for more versus women,” she shared. Despite these discouraging statistics, there is a growing recognition among investors of the benefits of gender-diverse teams.
Proactive steps are being taken to increase female participation in investment portfolios. Funds are being set up to support female founders, and there is a concerted effort to close the gender gap in startup funding. While challenges persist, there is hope that these initiatives will lead to a more equitable distribution of capital in the future.