Are Female Founders Still Missing Out On Africa’s VC-backed Tech Boom?
In December 2021, a deal often called to as the largest for African women in tech dovetailed off the landmark acquisition of what is West Africa’s biggest data center facility.
Equinix, a United States-based data collocation giant with USD 71 B in market cap, bought over MainOne for a hefty USD 320 M. MainOne is the brainchild of Funke Opeke, a Nigerian entrepreneur who once worked as an executive director for Verizon during her 20-year career in the United States.
Roughly 5 months before MainOne’s mega acquisition, one female founder from Kenya had flashed a torch in the East African front. Jihan Abass, who used to trade sugar in London, took USD 1.8 M in seed money to scale Lami Technologies, an insurtech startup.
Till today, the capital injection for Lami stands an exception because the 27-year-old managed to raise funds in a nascent Kenyan venture capital market dominated by not just male entrepreneurs but also expatriate founders. Besides, Kenya’s venture funding scene is, at current, not busy enough to accomodate much female participation. Yet, Lami’s Accion Venture Lab-led seed sufficed.
Agreed, venture investments into Africa’s tech landscape are at an all-time high, with USD 4.08 B invested in 2021. According to our daily funding tracker, more than USD 1 B has been invested for the year’s still-ongoing first quarter (Q1).
Still, tech companies owned by female founders have been able to attract a meager amount of all the VC entering the African digital soil.
Briter Intelligence collected related data from 2013 to 2021, and reported that just 3 percent of the entire funding has been allocated to female-owned [or female-led] startups. Meanwhile, 76 percent of the total money invested during the 8-year period are in the coffers of male-led tech companies.
Though other early stagers such as Okra, Reelfruit, Edukoya, Klasha and Bankly have scintillated the venture capital scene for women founders, investment activities have been substantially disproportionate. One report posited this metric; for every USD 1 raised by an African female founder, the male counterpart raised USD 288 [or 288 times more], showing yet another colossal disparity.
“Today, in 2022, there is capital apartheid against female entrepreneurs in Africa. Everybody wants to talk about how women should be on boards, involved in decision making and [how] we should fund it. But where’s the money? No one’s actually putting capital where their words are,” Janade Du Plessis from Launch Africa VC argued in a recent interview.
In semblance to Launch Africa, which intends to put about USD 30 M in some 80 female-owned startups in the next 2 years, other venture capitalists are taking note of the need to fill what is left of the long-standing void.
South Africa’s Alitheia IDF Fund launched a USD 75 M fund in 2020 to back mid-sized, and women-centered businesses, looking to put USD 2 M to USD 5 M in each over the next few years. In the same year, Senegalese-owned Janngo Capital, said it had committed half of its USD 82 M fund to tech companies founded, co-founded or built for women. Names like Iyinoluwa Aboyeji’s Future Africa, South Africa’s Dazzle Angels, and Lagos-based Rising Tide Africa also have million-dollar intentions for women-led African tech.
Even at the grassroots, African women in tech are getting more focus.
Yesterday, Hindsight Ventures, the Africa-focused investment vehicle of India-headquartered Startup Réseau—a global startup accelerator—unveiled a women-focused leadership development bootcamp.
In Tanzania, its African mainland, Hindsight Ventures looks to hand out TZS 5 M (over USD 2 K) on its demo day competitions, one happening alongside International Women’s Day on March 22. The program is hosted in collaboration support from the the High Commission of Canada in Dar es Salaam, Absa Bank Tanzania and AB InBev, a leading global alcohol beverage maker.
Hindsight Ventures has been operational in East Africa since December 2020, has so far hosted 5 pre-accelerator programs, and boasts of an accelerator portfolio of 67 startups across the region. It operates with the belief that the African continent has African challenges that must be solved by African talent using technology.
Generally, female-inclusive incubator programs have been somewhat on the increase, from the likes of Standard Chartered Women in Tech, Women Entrepreneurship for Africa, and VC4A’s Tech By Her.
Jagruti Bista, Founding Partner, Hindsight Ventures said: “Women are the drivers of the future of the economic engine. Through the upcoming Leadership Development Bootcamp, we aim to select 10 women entrepreneurs and help them with the know-how and resources across mentorship, industry access, market perspectives and an overall “Founder Development” platform”.
From the looks of it, the conventional investor pitch doesn’t often work in favor of female founders, with males being 60 percent more likely to get funded. Knowing this, it has become extremely important to extensively mentor women tech entrepreneurs on how to surf the unlikely VC tide.
Moreover, as more early-stage companies in the continent emerge and raise funding, there will be a surge in the need for talent, both male and female. Momentum gathers to enable women inclusion, and there is bound to be more drive towards gender-diverse tech investments.
