Female-led tech start-ups in Africa face numerous challenges; including limited access to funding compared to their male counterparts among others and these connotes negative effects on female-led tech initiation and entrepreneurship and on the tech space at large. 

According to a report, the share of investments going to female-owned tech start-ups stood at about 6.5% in 2021, meaning that just $1 in every $15 raised in the African start-ups ecosystem goes to women-owned tech start-ups, despite accounting for a significant portion of the start-up ecosystem in the region.  In the same vein another report by Africa: the Big Deal; Techloy stated that there was a decrease in the amount of funding raised by female-led tech start-ups in the year 2022 as compared to the previous year, 2021 from $188m (3.9%) to $290m (6.3%).  

However, it was alarming to realize that female-led ventures could only get a 4% ($188m) share of the total fund volume, while the male-led counterpart copped 96% ($4.6bn). This implies that investment in male-led ventures was 25x times more than funding that was invested in female-led tech start-ups in 2022.   

This discrepancy begs the question: why do female-led tech start-ups in Africa get less funding than their male counterparts? What are the factors responsible for this and its likely adverse impacts on the female led tech starts-ups and the entire tech ecosystem in general and these are what you will get to learn from this article.

Factors responsible for funding gaps for African tech female-led start-ups

Several factors contribute to these funding gaps between the two genders, such as;  

1. Limited access to funding opportunities: African female tech start-ups often struggle to access the same funding opportunities as their male counterparts. In many cases, they have limited networks and are less likely to receive venture capital investment due to bias and systemic discrimination. As a result, they may be forced to rely on personal savings, loans or grants with limited funding, which can stifle growth and innovation.

2. Lack of mentorship and support: Another challenge facing African female tech start-ups is the lack of mentorship and support. Many female entrepreneurs have limited access to experienced mentors and advisors who can guide them through the start-up process, provide advice on business development, and help them connect with investors.

3. Cultural and societal barriers: African women often face cultural and societal barriers that can limit their ability to start and run successful businesses. For example, traditional gender roles may make it difficult for women to balance family responsibilities and business obligations. Additionally, women may be subject to discrimination or bias in the workplace, which can make it difficult to access funding and other resources.

4. Limited representation in the tech industry: African women are underrepresented in the tech industry, which can make it difficult for them to connect with potential investors, mentors, and collaborators. Without a strong network, female tech entrepreneurs may struggle to secure funding and grow their businesses. A report also stated that there is dart of female entrepreneurs in the financial technology industry which receives the most funding (3%) among other tech niches. 

Adverse impact of these funding gaps in female-led tech start-ups

The funding gap for African female tech startups can have a number of negative impacts on both the entrepreneurs and the broader economy. Here are some potential impacts:

1. Limited economic growth: By restricting the growth and success of female-led tech start-ups, the funding gap can limit the potential economic growth that these businesses could generate. This can have ripple effects throughout the economy, as new jobs and innovations may not be created.

2. Fewer role models: The lack of successful female tech entrepreneurs can make it difficult for young women to see tech entrepreneurship as a viable career path, limiting the potential for future growth in this sector.

3. Limited innovation: By limiting the funding available to female-led tech start-ups, there is a risk that promising innovations will not be developed or brought to market. This can stifle progress in the tech sector and limit the potential for new products and services.

4. Fewer job opportunities: Female-led tech start-ups have the potential to create new jobs and stimulate economic growth. However, if these businesses are not able to secure funding, they may not be able to hire new staff or expand their operations.

5. Gender inequality: The funding gap can reinforce gender inequality in the tech industry and beyond, as female entrepreneurs may be less likely to succeed and less likely to receive the recognition and support they deserve.

In conclusion, the emerging roles of women in tech entrepreneurship in Africa cannot be undermined neither can it be over-emphasised, and hence the wide funding gap promoting gender in-equality in tech start-ups demands a thought provoking attention from key stakeholders and all a sundry at large.  

This funding gap for female-led tech start-ups in Africa has remained a complex issue that requires a multifaceted approach to address. By recognizing and addressing bias, providing targeted support and resources, and promoting education and training, we can work towards creating a more equitable and inclusive tech ecosystem that supports the success of all entrepreneurs, regardless of gender and this will in turn spur innovations, create job opportunities and enhance economic development in general.