The Gap Between Pledge and Practice: Women Founders in Australian Fintech
In the vibrant world of Australian fintech, a troubling disparity has emerged between the public commitments of venture capital firms to support women startup founders and the reality of their investment practices. This issue was brought to light during a panel discussion at FinTech Australia’s Intersekt conference in Melbourne, where leaders in the industry voiced their concerns about the systemic barriers that continue to hinder female entrepreneurs.
The Reality of Fundraising for Women Founders
Cassie Bell, co-founder of the insurance startup Butter, shared her experiences navigating the fundraising landscape as a woman. Launched in 2019, Butter successfully secured $1.3 million in pre-seed funding, but Bell emphasized the arduous journey that preceded this achievement. “It felt like we sat through a thousand meetings,” she remarked, highlighting the extensive effort required to attract investment.
Bell noted that the hesitance from potential investors often felt less about the viability of their business model and more about the fact that both she and her co-founder, Steph Skevington, are women. “We will come out of almost every investor meeting, and they’ll say, ‘We love female founders,’” she explained. Yet, the statistics tell a different story: only 0.7% of capital is allocated to all-female founding teams. This stark contrast raises questions about the sincerity of these pledges and the underlying biases that may persist in the investment community.
Unpacking the Bias
The feedback that Butter received from some investors suggested that the startup was “too young” or that the insurance sector was outside their investment focus. Bell challenged this narrative, asking, “Is it really, or is it that there’s an unconscious bias sitting behind that?” This reflection underscores a critical point: the need for investors to confront their own biases and reassess their criteria for funding.
The Unique Challenges for Women Entrepreneurs
Katherine McConnell, founder and CEO of energy upgrade fintech Brighte, further elaborated on the challenges faced by women in the startup ecosystem. She pointed out that while all founders face risks when leaving stable salaried positions, women, particularly those with family responsibilities, encounter additional hurdles. The financial insecurity associated with launching a startup can be daunting, and the assumption that founders should not expect immediate remuneration only exacerbates this issue.
McConnell argued for a shift in this mindset, stating, “If you don’t change that, you won’t get more females in the industry.” This call to action emphasizes the need for a more supportive financial structure that recognizes the realities of entrepreneurship for women.
The Cost of Exclusion
May Lam, chief information officer at Australian Payments Plus, warned that the ongoing structural barriers could stifle innovation within the fintech sector. “We are here to challenge the status quo,” she asserted, emphasizing the importance of diverse representation in creating products that truly serve the needs of the community. Lam’s perspective highlights a crucial point: the lack of female founders not only affects individual entrepreneurs but also limits the potential for groundbreaking innovations that could benefit the entire industry.
Transparency as a Catalyst for Change
Dom Pym, founder of Up and investment firm Euphemia, brought a practical approach to the discussion by advocating for transparency in investment practices. Euphemia has committed to publicly disclosing data on the share of its investments directed towards female founders. “You will be embarrassed, and that will make you change what you’re doing,” he quipped, suggesting that accountability could drive meaningful change in the venture capital landscape.
A Call for Action
The conversations at the Intersekt conference reflect a growing awareness of the challenges faced by women in fintech and the urgent need for change. As the industry continues to evolve, the commitment to supporting female founders must extend beyond mere rhetoric. It requires a concerted effort from investors, industry leaders, and the broader ecosystem to dismantle the barriers that have historically limited women’s participation in entrepreneurship.
The insights shared at the conference serve as a reminder that while progress has been made, there is still much work to be done. By addressing biases, rethinking funding structures, and fostering an inclusive environment, the Australian fintech sector can unlock the full potential of its diverse talent pool.