Unlocking Investment in Female Entrepreneurs: from WMSMEs to High-Growth Startups

2 Minutes Read

The call for more investment in women during this year’s International Women’s Day is a theme that resonates strongly for the Alliance, as we dial up our focus on unlocking finance for female entrepreneurs. 

While there’s much to celebrate as debt financing for women’s SMEs among Alliance members continues to grow steadily, the picture is not so rosy for female founders looking to raise capital.

The stark reality is that less than 3 percent of global equity finance finds its way into female-founded startups.

Many female founders say a key contributor to this startling statistic is the lack of female representation in decision making roles in venture capital and private equity firms. In 2019, a study by HSBC found that 58 percent of female founders raising capital in a range of global markets felt there was bias from investors because of their gender.

This in turn contributes to an underrepresentation of women in start-ups, including in fintechs, which also then affects the end customers of financial products.

Alliance research in 2020 revealed that the lack of women in key roles in the fintech sector—founders, as well as product design and technology teams—likely leads to unconscious biases in business modeling and product development processes. The results can be seen in the lack of gender-intelligent fintech solutions: 65 percent of fintechs surveyed had not customized their sales funnel for women.

Similarly low levels of gender-intelligent design was revealed in a recent survey of fintech firms conducted by the International Finance Corporation, with 45 percent of those surveyed reporting that investor support or mandates was the external driver most needed to push them to serve women better.

This underscores the urgent need to increase women’s representation as equity investors and across the whole financial ecosystem, particularly given the strong role that investors can play in in encouraging fintechs to take women customers seriously.

Representation will be a cross-cutting theme at the Alliance’s 2024 Summit in London on 4-5 June. We’ll hear from private equity diversity champion Level 20, alongside diversity-focused venture capital funds, on how we can accelerate efforts to increase women’s representation as investment decision-makers.  We’ll also hear from women at the top of financial organizations about their path to leadership, and male leaders on how they are building gender diverse and inclusive organizations.

Join us at the Summit in London on 4-5 June to learn how your organization can be part of building a more equitable financial ecosystem for female founders to thrive.