Disrupt Africa Data // 39.6% of Venture Capital Firms Investing in Africa have Female Partners or Founders

Disrupt Africa Data // 39.6% of Venture Capital Firms Investing in Africa have Female Partners or Founders

Disrupt Africa has released the first-ever publication focused on gender equality in the African tech startup landscape, in partnership with Africa-focused pre-seed investment programmes Madica, with the results demonstrating the lack of gender diversity both within startup teams and funding rounds on the continent.

Women have always been underrepresented in the venture capital space worldwide. Some of the earliest research from the US (2018) found that only nine percent of VC decision-makers were women.

In Africa, new data by Disrupt Africa shows some more promising trends – 39.6 per cent of VCs actively investing on the continent in 2022 had a female partner or founder – yet less than 10 per cent of angels are women.

“African tech certainly does have a gender problem when it comes to women within leadership positions at startups. Of the 2,395 startups tracked for the purposes of this publication, only 350 (14.6%) have at least one female
co-founder and 230 (9.6%) have a woman CEO,” read part of the study.

The study further shows, “While there are increasingly more opportunities to make the sector more welcoming and attractive to females, it is clear from the data that African tech remains a male-dominated landscape, and there is serious work to be done in order to get women anywhere near parity from a leadership perspective within the space.”

With data demonstrating a direct link between gender diversity in teams and increased profitability, the Diversity Dividend: Female fund managers in Africa series of case studies and podcasts, produced by Disrupt Africa, commissioned by Boost Africa Technical Assistance Facility and financed by the European Union under EDF Thematic Blending and Cotonou Investment Facility, looks at Africa-focused VC firms that recognize this truth and put diversity front and centre.

African Tech Scene in 2022

The study is quite timely as studies have shown that 2022, was a good in 12 months of firsts for African tech startups.

For the first time, the sector attracted over 1,100 unique investors in 2022, which in turn resulted in a record fundraising haul of $6.5 billion, according to data from Partech.

In fact, even some of the excesses of 2021 were eclipsed when the number of investments on the continent rose higher in 2022 than they had a year earlier, boosted by early-stage firms flocking to fund startups in the wake of landmark exits of homegrown companies like Jumia and Paystack.

In Africa, incubators, accelerators, angels, and seed investors easily outnumber larger funds — simply because it’s much harder to raise a large fund here. They accounted for more than 70% of the 1,100+ investors that participated in at least one deal on the continent last year.

Since launching its research arm in 2016, Disrupt Africa has built up a significant portfolio of publications, most notably the African Tech Startups Funding Report, Finnovating for Africa, and deep-dives into various leading startup ecosystems, available free for all via open-sourcing initiatives with various partners across the continent’s tech ecosystem.

Its latest publication, it’s 21st in total, is the company’s most ambitious ecosystem research project to date – focusing on gender equality in the African tech startup landscape, Diversity Dividend: Exploring Gender Equality in the African Tech Ecosystem.

It is released in partnership with Madica, an Africa-focused pre-seed investment programme empowering underrepresented and underfunded mission-driven founders on the continent.

The sector-agnostic platform, affiliated with Flourish Ventures, aims to empower entrepreneurs with the provision of funding and also democratising access to world-class company-building support.

Also Read: Disrupt Africa to Launch Gender Equity Study 

Other collaborators include FirstCheck Africa, which invests early in high-growth technology startups founded or co-founded by women; TLcom Capital, which has US$350 million of VC assets under management across Africa and Europe; LoftyInc Capital Management, a venture capital firm on a mission to build an ecosystem of Africans investing in Africans solving African problems; Google for Startups, which is on a mission to support thriving, diverse, and inclusive startup communities around the world; and RevUp Women by AfriLabs, which empowers early-stage women-led African startups and SMEs to overcome unique challenges that hinder their growth and success.

iceaddis, Ethiopia’s first innovation hub and tech startup incubator; the International Trade Centre’s Netherlands Trust Fund V (NTF V), a four-year partnership signed by the Ministry of Foreign Affairs of The Netherlands and the International Trade Centre to support micro, small and medium-sized enterprises (MSMEs) in the digital technologies sector; and Janngo Capital, which builds, grows and invests in pan-African digital champions with proven business models and inclusive social impact, are also partners.

Key Findings in the Disrupt Africa Study on Gender Equality

Key findings include the fact that 39.6% of VCs investing in African startups between 2022 and April 2023 have at least one female founder/partner/GP/managing partner

Among the Africa-based VCs active, this number goes up to 47.8% and 6.1% of angels investing in this period are women. Other outstanding stats show that:

• 350 (14.6%) of 2,395 African tech startups have at least one female co-founder.
• Most female co-founders – countries Rwanda (22.5%), Tunisia (22.2%), Senegal (21.6%), and Zambia (20.8%).
• Most female co-founders – sectors, Legal-tech (26.9%), e-health (22.1%) and recruitment and HR (22%)
• 230 (9.6%) of 2,395 African tech startups have a female CEO

The study further showed that of the US$4,052,374,000 raised US$369,102,000 (9.1%) went to female Co-founders and US$119,053,000 (2.9%) went to female CEOs and of the 711 African tech startups funded between 2022 and 2023 149 (21%) had a female co-founder and 83  11.7%) had a female CEO

Of the just over US$4 billion raised by ventures in the period in question, meanwhile, only 9.1 per cent went to companies co-founded by a woman, and just 2.9 per cent to startups with a female CEO or equivalent.

The report also includes data on female representation within the Africa-focused venture capital industry.

You can access the report here