What’s the Context?
The Rise of Female Techpreneurs in Africa’s Fintech Boom
In recent years, Africa has witnessed a remarkable surge in fintech innovation, with female entrepreneurs stepping into a space traditionally dominated by men. Despite the challenges posed by gender bias, women-led fintechs are emerging as a significant force in the industry. The continent boasts double the average rate of women-led fintechs compared to the global average, yet the funding landscape remains starkly imbalanced.
The Funding Disparity
While Africa’s fintech sector is thriving, the financial backing for female-led ventures is alarmingly low. Data reveals that less than 5% of the total funds allocated to fintech startups from 2013 to 2021 went to companies founded solely by women. In stark contrast, a staggering 82% of funding was directed towards all-male founding teams. This funding gap not only stifles innovation but also perpetuates a cycle of inequality that hinders the growth of female-led businesses.
Challenges Faced by Female Entrepreneurs
Female techpreneurs often encounter lower valuations and increased scrutiny when seeking investment. Many report that the majority of venture capital panels are composed of older, white men, which can lead to implicit biases during the funding process. Faith Mokgalaka, founder of a digital platform for farmers, notes that while investors may not be overtly sexist, women often face more rigorous questioning and additional documentation requirements compared to their male counterparts.
Success Stories Amidst Adversity
Despite these challenges, numerous female entrepreneurs are making waves in the fintech sector. Oluwatosin Olaseinde, a financial analyst who founded MoneyAfrica and Ladda, has created platforms that empower young professionals with financial literacy and investment opportunities. With a community of 300,000 on social media and projected revenues of $1 million, Olaseinde exemplifies the potential of female-led fintech ventures.
Similarly, Jihan Abass, founder of Lami Technologies, is revolutionizing insurance coverage in Africa. Her company has raised over $1.8 million in seed funding and has partnered with major banks to offer flexible digital insurance products. Another notable figure is Fara Ashiru Jituboh, co-founder of Okra, which has developed an open finance platform that connects individuals and businesses to third-party applications. In less than two years, Okra has attracted over 400 clients and raised $4.5 million in venture capital.
The Need for Change in the VC Landscape
The stark funding gap is often attributed to a perceived shortage of female techpreneurs, but many industry experts argue otherwise. Martha Mghendi-Fisher, founder of African Women in Fintech and Payments, asserts that investors simply need to look harder for female entrepreneurs. As the conversation around gender bias in venture capital gains traction, there is a growing recognition of the need for more inclusive practices.
Accelerators and venture capital firms are beginning to shift their focus towards women-led businesses. The Catalyst Fund, for example, has supported numerous companies, with over one-third founded by women. Maelis Carraro, managing director of the fund, emphasizes the importance of rethinking how investors interact with female entrepreneurs, advocating for a more inclusive approach to pitching and funding.
Creating a Supportive Environment
To foster a more equitable environment for female techpreneurs, industry leaders suggest implementing training programs that address gender biases and promote diversity within venture capital boards. Initiatives that encourage girls to pursue STEM careers and celebrate successful women founders can also inspire the next generation of female entrepreneurs.
Delila Kidanu, co-founder of Koa, an app-based savings and investment platform, highlights the need for awareness around gender biases in decision-making processes. By creating a culture that recognizes and addresses these biases, the fintech sector can become more inclusive and supportive of women-led ventures.
The Future of Female-Led Fintech in Africa
As female techpreneurs continue to break barriers in Africa’s fintech landscape, the potential for growth and innovation remains vast. While challenges persist, the increasing visibility of successful women in the industry serves as a beacon of hope for aspiring entrepreneurs. With continued support and a commitment to addressing gender biases, the future of female-led fintech in Africa looks promising.