Gender prejudice persists, with all-male startup founding teams receiving 99 percent of the $374 million in investments raised in August, while only a pitiful 1% went to firms started or co-founded by women, according to the most recent Wamda report.
Although startups in the Middle East and North Africa (MENA) area have raised $2.2 billion in funding so far between January and August 2022, according to industry insiders, capital raising is still mostly a mirage for women-founded enterprises in the region.
Ibtissam Ouassif, the female co-founder of UAE-based BNPL startup Cashew, told Arabian Business that there were still challenges to be overcome before there would be significant investment in IT firms with women at the helm. “The figures unambiguously show that the justification for the gender gap or investors’ reluctance to fund female-founded firms is absurd” she said.
“Data showed that roughly 29 percent of female-owned businesses across the MENA area are global enterprises — a bigger proportion than their male contemporaries can boast” Ouassif said of the hesitation to help female entrepreneurs.
The chief product officer of the buy now, pay later (BNPL) firm and co-founder of Cashew stated the fundamental reason for this is that, on average, women founders do not give up as frequently as men.
Investors headquartered in Saudi Arabia participated in 10 out of the 33 fundraising transactions that took place in the MENA region in August of this year, followed by their counterparts in the UAE with eight transactions.
Although female participation in startup formation and obtaining finance for their businesses has been a problem globally for a time, according to Saudi venture capitalist Waleed A. Alballaa, this was not the case in Saudi Arabia.
According to Alballaa, General Partner at Sukna Ventures, “On the investment side, the percentage of funding to women-founded firms may not be as high in Saudi Arabia, but we’re already seeing a big improvement in the trend.”
In reality, according to Alballaa, women are advancing significantly in both the startup and investment sectors. Some of them, including Outliers and Impact46, have even attained partner-level roles at VC (venture capital) firms.
In Saudi Arabia, WomenSpark has been active at the level of angel investing for a while, according to Alballaa. He claimed that among the 23 high-income GEM economies, Saudi Arabia is currently the only country with greater starting rates for women than for men.
The female-founded or co-founded firms that recently got money from Saudi Arabian VCs or angel investors include Gathern, Taffi, Mrrha, and Sabbar.
The managing partner of RedSeer Strategic Consultants in Dubai, Sandeep Ganediwalla, claimed that the US, which has a highly active investment environment, was among the countries with the lowest representation of women in venture capital investing.
“Not only are women underrepresented in VC funding, but they are also underrepresented in leadership roles in the corporate sector. Therefore, in order to remedy this, we must address the larger problem of women’s inclusion in leadership” Ganediwalla told Arabian Business. Furthermore, he emphasized that money was just one aspect of women’s business.
“Many female business owners would be content to develop self-sustaining models that add value without requiring outside capital. As a result, we need more detailed measures to track overall female entrepreneurship” Ganediwalla said.
Last Updated on October 23, 2022 by Safiya K
