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Women-led ventures sparkle in a tough funding year

Women-led ventures sparkle in a tough funding year [Graphics: Hope Mukami]

Investment in African women-founded and led startups remains a bright spot in a global ecosystem drained of funding.


Conrad Onyango, bird story agency


Africa’s women-led startups retained their sparkle through 2023, against the backdrop of one of the darkest periods for global startup funding, raising US$200 million, 7% growth over the previous year, according to a report from Africa: The Big Deal.


In 2022, these female-founded ventures had grown by 4%. The amount remains significantly lower than the US$ 2.7 billion raised by their male counterparts but the almost doubling in growth during such a difficult time indicates a growing interest in women-led startups from investors.


“Though it remained small, the absolute amount and share of funding going to female-led ventures did grow in Africa last year compared to 2022,” said Africa: The Big Deal Co-founder, Max Cuvellier in their latest analysis.


However, funding for female founders was concentrated in the seed stage, where they represented 20% of startups raising from US$100,000 to $1,000,000, a significant increase from 13% in the previous year.


In the US$1 million plus deals, female CEOs raised a total of US$6.4 million, a marginal increase over the earlier period. While the percentage of women founders decreased as the stages increased, there was still some growth higher up, with 7% recorded in the US$10 million+ category, also up from 4% in 2022.


Sabi, a Nigerian E-commerce startup, signed the largest deal by a female CEO, with Series B funding of some US$ 38 million.


This growth trend is also highlighted in reports by Partech and Disrupt Africa, showing funding to startups with at least one female founder growing from 20.2% in 2022 to 26.3% in 2023.


“Signs of improvement, then, but there is still a long way to go before we will see funding parity from a gender perspective,” said the Disrupt report.


The Partech analysis shows Kenyan female-founded startups led, raising 25% of the total amount raised by female founders in Africa.


However, this is a significant drop in the share of funding going to Kenyan women founders. The country accounted for 41% in 2021 and 61% in 2019.


Tunisia and Ghana are front runners of growth in this respect, with female-founded startups representing 38% of all deals in both of those countries, in 2023.


According to the Partech report, Kenya ranks fourth after Morocco’s third place, 35% share.

Next in the top 10 are South Africa, Egypt, Nigeria, Rwanda, Senegal and Cote d’Ivoire respectively.


The E-Commerce sector accounted for the most of women-led venture funding rounds, capturing 22% of all funding. While fintech ranked second, securing 19%, that contrasts with a larger 24% slice of the overall startup funding pie.


On the other hand, funding for women-led ventures in the health-tech sector commanded a larger proportion (16%) of funding for female-led companies over funding for all companies (11%), according to Partech.


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