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Female-founded ventures continue to attract only a small fraction of the equity funding on the continent
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Last time we looked at funding in Africa with a gender lens (and all the times before that), it wasn’t a pretty sight. Abysmal is the first word that comes to mind. Indeed, in 2022, start-ups in Africa with a single female founder or an exclusively-female founding team had raised 56x times less (!) equity funding than those with a single male founder or an exclusively-male founding team ($57m vs. $3.2b). How do these numbers look in 2023 so far?
Maybe not as bad, but still very bad. Indeed, in the first half of 2023, single female founders and exclusively-female founding teams raised just $22m in equity funding, the lowest 6-month number since H1 2021. Given the significant drop in funding raised by their male counterparts as well (still $800m+ in total), the relative share of total funding raised by female-founded ventures went ‘up’ from 1.5% in 2022 to 2.2% in H1 2023. All in all, the ‘gender investment gap’ that stood at 56x in 2022 had reduced to 36x in the first half of 2023, the lowest gap ever registered since we’ve started collecting the data in 2019. If we include the numbers for gender-diverse founding teams, it means 21% of the equity funding raised in H1 2023 in Africa was raised by start-ups with a female founder or at least a female co-founder.
This week, to thank you all for your ongoing support, we’re increasing our discount on the database: use this link to access all our data going back to 2019, and updated monthly, at a 21% discount, valid until 21 July… Don’t miss it!
Finally, if we compare the ‘funding winter’ to the ‘funding heatwave’ (if you’re not 100% familiar with these concepts, check out this post), results are a little encouraging (but just a little), especially as some had feared that women-founded ventures might get impacted disproportionately by the funding slowdown in Africa. In the past 12 months (H2 2022 + H1 2023), start-ups with a single female founder or an exclusively-female founding team raised $48m in equity funding, a -18% YoY decrease. While the numbers are extremely low compared to their male counterparts (down from $4.7b to $1.8b, -62% YoY), the share of total funding raised more than doubled between the two periods, going from 1% to 2.3%. The proportion of funding raised by start-ups with a female founder or at least a female co-founder (therefore including gender-diverse founding teams) decreased slightly though, from 17% to 16%, due to historically poor results for gender-diverse founding teams in H2 2022.
To put things into perspective, the proportion of funding raised by start-ups with a male founder or at least a male co-founder went ‘down’ from 99% to 98% between the two periods…
This wasn’t my first post on gender, and you can be sure that it won’t be my last. I’ll admit I was one of the pessimists out there who worried the funding slowdown would have a much bigger impact on women-founded ventures. There is still such a loooong way to go, but at least the situation in the past year doesn’t seem to have wiped out all the meagre-yet-hard-earned gains of the previous periods, like it’s done in other areas. Yet it remains hard to find the silver lining in such poor numbers... On a much lighter note, if you’re not sure where the post title comes from... A bientôt! Max