Gender Disparity in African Tech Startups: A Closer Look
In the vibrant landscape of African technology, a stark gender disparity persists. According to a recent report by Disrupt Africa, only 17.3% of tech startups on the continent have at least one female co-founder, and a mere 11.1% are led by a female CEO. These figures highlight a significant imbalance in an industry that is rapidly evolving and expanding.
The Report: Diversity Dividend 2024
The findings come from the second edition of the report titled "Diversity Dividend: Exploring Gender Equality in the African Tech Ecosystem 2024." This comprehensive study, conducted in partnership with the Africa-focused pre-seed investment program Madica, analyzed data from 2,600 African tech startups. The report aims to shed light on the ongoing challenges and progress related to gender equality in the tech sector.
Gabriella Mulligan, co-founder of Disrupt Africa, noted that while the numbers reflect some progress—up from 14.6% female co-founders and 9.6% female CEOs in the previous edition—they are still far from satisfactory. The researchers characterize these advancements as "baby steps," emphasizing the need for more significant efforts to achieve gender parity in the tech ecosystem.
Growth in Female Representation
As of June 1, 2024, there were 483 startups with at least one female co-founder out of a total of 2,786 African tech startups, a notable increase from 350 in 2023. Despite this growth, the overall landscape remains predominantly male-dominated. The report highlights that while there are positive trends in female leadership, substantial work is still required to elevate women’s roles in the sector.
Country and Sector Leaders
When examining the geographical distribution of female co-founders, Zambia emerges as a leader, with 24% of its startups featuring female representation at the founding level. Following closely are Senegal (23.4%) and Rwanda (22%). Other countries like Nigeria, Kenya, and Ethiopia also show promising figures, each with nearly 21% female-founded startups.
In terms of sector performance, legal tech leads with 27.6% female founders, followed by healthtech (23.4%) and recruitment and HR startups (22.7%). These sectors demonstrate a more inclusive approach, which could serve as a model for others.
Funding Gender Biases
The funding landscape presents another layer of complexity. The report indicates a slight improvement in funding for female-led ventures, with 16.6% of total African tech funding raised by startups with at least one female co-founder in 2023, up from 9.3% in 2022. However, the share of funding for female-led startups remains low, at 8.2%.
Between January 2022 and June 2024, $6.2 billion was raised by African tech startups, but only $747 million (11.9%) went to those with a female co-founder, and just $289 million (4.6%) to startups with a female CEO. This stark contrast underscores the ongoing challenges women face in securing investment.
The Impact of Gender Bias
A survey included in the report revealed that 79.3% of female founders perceived professional biases due to their gender, while 69% felt they had missed out on opportunities because of it. Additionally, over 74% reported feeling disadvantaged when engaging with potential investors. The primary obstacles identified were a lack of access to funding (55.2%), negative behavior from men in professional networks (41.4%), and limited access to networks (37.9%).
Venture Capital’s Role
The report also highlights the role of venture capital in shaping the gender dynamics within the tech ecosystem. Between early 2023 and mid-2024, 575 VC firms invested in African startups, with 44% of African VC firms having female leaders. This representation is encouraging, yet the overall investment landscape still reflects a significant gender imbalance.
The Importance of Gender Diversity
The report emphasizes the critical need for gender diversity in the startup ecosystem. Partners like Goodwell Investments and the International Trade Centre’s NTF V program are actively working to address these disparities. Nico Blaauw from Goodwell Investments pointed out the historical context of female entrepreneurship in Africa and the necessity for this to translate into the startup scene.
Michel Bernhardt from SAIS echoed this sentiment, stressing the importance of supporting female founders, particularly in sectors like agriculture, where women play a pivotal role. The call to action is clear: understanding the connections between gender, agriculture, and innovation is essential for fostering change.
A Path Forward
As the African tech ecosystem continues to evolve, the findings from the Diversity Dividend 2024 report serve as both a reflection of progress and a reminder of the work that remains. Advocates like Madica are committed to championing diversity and creating a ripple effect that inspires future generations of women to thrive in the tech industry.
The journey toward gender equality in African tech is ongoing, and while strides have been made, the path ahead requires collective effort, transparency, and a commitment to fostering an inclusive environment for all.