The gender gap in African startups: Only 1% funding has gone to ‘female’ ventures since 2019

Despite the impressive figures on the capital global investors have poured into African startups in the past few years, the proportion going to women-led and gender-diverse companies still remains significantly lower.

New data from Africa: The Big Deal, which curates a database of funding deals from across the continent, shows that since 2019, 84 per cent of all the Ksh.1.2 trillion funding  ($9.8 billion) raised by startups in Africa since 2019 has gone to ‘male’ startups.

The database categorises startups as ‘Male’, ‘Female’ and ‘Mixed’. ‘Male’ startups have a single male founder or a male-only founding team, while ‘Mixed’ startups have a founding team with at least one male and one female founder.

‘Female’ companies on the other hand have one single female founder or a female-only founding team

Within the same period, about 15% of the money went to gender-diverse founding teams while a meagre 1.2 per cent of the funding (Ksh.177 billion - $146 million) has gone to ventures with a single female founder or a female-only founding team.

“The most concerning part is that things are not really progressing. Yes, the percentage of funding going to ‘female only’-funded start-ups so far this year is higher than in previous years, yet it is still incredibly low, and the little progress made on that front is largely cancelled by the relative drop in funding going to gender diverse ventures,” says the report.

It points out that in the near-four-year period, funding of female-only ventures has increased by 0.9 per cent while funding of gender diverse startups has slumped by 2.4 per cent.

“The CEO tends to almost always be either the founder, or one of the co-founders. But still. In 2022 so far, we’re looking at 97% of the total funding going to start-ups led by a male CEO. And there is no sign of a positive trend here either, as the percentage of funding going to female-led organisations keeps oscillating between 3% and 6% since 2019,” the report adds.

East Africa, in particular, has been accounting for a large percentage of the funding raised on the continent.

At the close of May this year, Kenya, Tanzania and Uganda had left very little room to their neighbours, accounting for 96% of all the funding raised on the continent since 2019.

Of this, 84 per cent of all funding channelled towards the Eastern Africa region had gone to Kenyan startup ecosystem. This ($1.9 billion - Ksh.223 billion) is just under a quarter of all the funding raised by ventures in the continent.

But even though Kenyan female tech founders continue to attract the most funding in the continent, their overall share has fallen over the last two years.

Another report released in April by the database showed that Kenya accounts for 41% of all funding raised by female CEOs in Africa, down from 2019 when it accounted for 61%.

“Two-thirds of $408 million was raised by just 10 female-led startups over the last three years and half of those startups were in Kenya. Kenya actually drives the overall numbers, though its weight is slowly decreasing,” said the report.

Some of the notable female-led tech startups which have recently raised significant funding from global investors include insurtech firm Lami led by Jihan Abass; social commerce startup Tushop (Cathy Chepkemboi), as well as Credrails, a fintech led by Clara Wanjiku Odero.