The Diversity Dividend: Exploring Gender Equality in the African Tech Ecosystem report revealed that of the 711 funded African tech startups between 2022 and 2023, 149 (21%) had a female co-founder and only 83 (11.7%) had a female CEO. Others point to female-led startups in Africa raising $188m (4%) in 2022, while male-led ventures raised $4.6bn (96%). This gender disparity is concerning, especially when research consistently demonstrates the benefits of gender diversity in founding teams.
The 2019 Moving Toward Gender Balance in Private Equity and Venture Capital study by the IFC showed that VC and PE portfolio firms with gender-balanced management teams receive higher valuations. Additionally, these teams demonstrate improved decision-making and governance, better risk management, higher employee retention rates, and a broader customer base. With such clear advantages, it is in VCs' best interest, whether African or otherwise, to actively seek out and invest in startups led by women.
Madica, which is a structured investment program for pre-seed stage companies in Africa, recognises we have a unique opportunity to effect change in the technology industry by supporting entrepreneurs and startups. Therefore, we are proud to sponsor the first-ever Gender Equality in African Tech publication.
Overcoming low-income and labour-intensive jobs
Over the last three decades, women's participation in the African labour force has remained steady at around 60%, as reported by the World Bank. However, this statistic only tells part of the story. Many women are limited to low-income, labour-intensive jobs in areas like agriculture, which offer few growth opportunities and contribute to ongoing poverty.
Despite this, African women are leading the way as entrepreneurs and business owners, with approximately 30% of businesses in the region owned by women, although this varies across countries. For example, Ghana has one of the highest rates of women-owned businesses.
Yet, the tech sector, one of the fastest-growing and most promising sectors in many countries, presents a different story. Women are underrepresented and marginalised as tech entrepreneurs in Africa and globally.
One major issue female-led startups face is the gender investment gap, which refers to the discrepancy in funding between male and female-led ventures. According to a report by Briter Bridges, in 2022, female-led start-ups in Africa raised just $188m, which accounted for only 4% of total venture capital investment in the region. In contrast, male-led start-ups raised $4.6bn, accounting for 96% of total venture capital investment.
Promoting Diversity From Within
It is difficult for many women in the African Tech Entrepreneurship space. Marie-Reine Seshie's entrepreneurial journey is a tale of resilience. When compared to their male counterparts, both women had unequal access to financial opportunities. Regardless, they were so impressive, they became the first companies Madica invested in, demonstrating our commitment to prioritising startups driven by women founders.
Marie-Reine Seshie, CEO of Accra-based Kola Market, a full-stack platform that provides sales-as-a-service to SMEs through data science, is proud of the relationships she has formed quickly with investors, advisors, clients, and her staff. These collaborations have been critical to her company's rapid growth. Her company acquired over 1,000 SMEs through these connections in the first three months.
Marie-Reine recognises the underrepresentation of female founders as well as the biases that exist in fundraising.
“It’s not easy to join the all male panel zoom call or read the news about how female founders continue to receive single digit percentage of investments, whilst starting way more companies than their male counterparts. It’s very tough to go to a high profile client and be told I don’t believe as a woman, a Ghanaian woman you can build what you say you are building.” Marie-Reine observes.
However, she does not let these difficulties stop her and considers herself fortunate to have worked with many amazing people who have supported and guided her journey.
“But at the same time, some of the best tangible help, support and advice I have received so far has also come from very well meaning male dominated teams and individuals, the Madica MD and team being a good example. And so on a daily basis, I am constantly reminding myself to not let the data get to me. To focus on getting more and more well meaning partners and investors, and let the work we are doing do the talking for us. I am excited for what the future holds for female entrepreneurs especially in the tech space. It’s a marathon, not a sprint.”
Speaking of support and guidance, Madica supports portfolio companies by also matching founders with mentors who have been highly successful in scaling start-ups or have experienced remarkable growth journeys with significant functional experience across various fields. Considering that the ecosystem can do with some more representation, Madica strategically incorporates a larger percentage of female mentors into the program to help provide female entrepreneurs with continuous hands-on guidance that goes beyond one-off advice.
One of such mentors is Wendy Hoffman, Capital Legal Counsel at The Delta, whose area of expertise and support cuts across start-up legal advisory, corporate structuring, fundraising, stakeholder engagement and management. On the topic of the need for gender diversification in African tech, Wendy rightly notes,
“African ventures, built with diversity as a founding value, will achieve immeasurably more success as they are developing solutions through shared context, nuances and perspectives. These solutions are representative of the people they are striving to solve for.”
Isis Nyong’o, Partner at Asphalt Ink is another female mentor on the Madica roster providing support in strategy, partnerships, marketing, sales, human resources, research and corporate governance. There is an urgent need for greater gender parity in the African tech space Isis states,
“It is critical to ensure women decision makers are on all sides of the proverbial table – as founders, engineers, investors, policymakers, researchers and beyond. The diversity of perspectives, experiences, and market understanding that gender-balanced teams lead to better approaches to identifying and addressing the real problems that technology is well suited to solve. This Disrupt Africa report is important and draws attention to the data of where we stand today; to broaden both awareness of the gaps and help shape ideas on effective interventions to close these gaps.’’
Aggressively seek investments in female-led businesses
As it stands, 230 (9.6%) of 2,395 African tech startups have a female CEO. Initiatives highlighting female entrepreneurs, such as Madica, are critical in affecting change and breaking down biases in the tech industry.
Marie-Reine's success stories demonstrate the resilience and potential of women in the African technology sector. Their accomplishments and women's empowerment within their companies illustrate the positive impact of gender diversity and serve as an inspiration to other aspiring female entrepreneurs.
Addressing systemic problems such as unequal financing access and fundraising biases is critical for fostering gender diversity. We can level the playing field and contribute to the general growth and success of the African IT ecosystem by building an inclusive atmosphere and providing assistance, mentorship, and funding opportunities.
