Only 17% of African startups have a female co-founder - Disrupt Africa

In Africa just 17.3% of tech startups have at least one female co-founder, and only 11.1% have a female CEO.

That is according to data from a new report from Disrupt Africa titled "Diversity Dividend: Exploring Gender Equality in the African Tech Ecosystem 2024," a deep dive into gender equality, or the lack of it, within the African tech startup space.

This is the second edition of this report from Disrupt Africa's research department, in partnership with Africa-focused pre-seed investment program Madica, and the researchers studied 2,600 African tech startups for its findings.

"These figures are by no means high enough, but do nonetheless reveal progress since the first edition, when 14.6% had a female on the founding team and just 9.6% were led by a woman CEO," the researchers said.

Disrupt Africa said the findings can only be characterized as "baby steps" for diversity in the region given the significant disadvantage women still face within the tech startup ecosystem.

"This second edition of our pioneering research publication, 'Diversity Dividend,' tracks small but nonetheless significant steps toward a more gender diverse African startup ecosystem, but more needs to be done to ensure the sector more quickly toward the gender parity it needs to really scale and succeed," said Gabriella Mulligan, co-founder of Disrupt Africa.

As of June 1, 2024, there were 483 startups with at least one female co-founder out of 2,786 total African tech startups. This was up from 350 female founded startups in 2023.

"While it is clear from the data that African tech remains very much a male-dominated landscape, there are positives to be drawn from the growth in female leadership we have seen over the last year, however small. That said, much serious work still needs to be done in order to get women anywhere near parity from a leadership perspective within the space," the report said.

Country and sector leaders

When it comes to African countries with the highest number of female co-founders, Zambia was the most diverse nation, with 24% of its startups having female representation at founder level.

Senegal was close behind at 23.4%, followed by Rwanda at 22%. Nigeria, Kenya and Ethiopia had almost 21% of their tech startups including a female founder. Tunisia was nearing 20% and South Africa had just over 18% of its startups including a female founder.

Zambia also had the highest percentage of female CEOs followed by Tunisia, Senegal, Rwanda, Ghana and Kenya.

(Source: Diversity Dividend: Exploring Gender Equality in the African Tech Ecosystem 2024 Report)

In terms of sector verticals, legal tech had the highest number of female founders, making up 27.6% of the total; healthtech (e-health) was at 23.4%; recruitment and HR startups were 22.7% female founded; and edtech came in at 21.5%. Other notable mentions were e-commerce and retail tech with 20.4% and entertainment at 18.8%.

Legal tech also had the highest percentage of female CEOs, followed by agritech, edtech, healthtech, e-commerce and retail tech, and then recruitment and HR.

(Source: Diversity Dividend: Exploring Gender Equality in the African Tech Ecosystem 2024 Report)

Funding gender biases

There was some progress on the funding front, with the percentage of total African tech funding raised by ventures with at least one female co-founder increasing to 16.6% in 2023, from 9.3% in 2022.

Meanwhile, the share of funding raised by female-led startups was up to 8.2% in 2023, compared to just 2.8% the year before.

Looking at the funding pie, US$6.2 billion was raised by African tech startups between January 2022 and the beginning of June 2024 – of that, only $747 million (11.9%) went to startups with a female co-founder and just $289 million (4.6%) to startups with a female CEO.

Between January 2022 and the beginning of June 2024, 21.9% of funded African tech startups had at least one female co-founder and 11.8% had a female CEO.

When it comes to geography and vertical, the direction of funding into female-founded ventures over the last two-and-a-half years follows wider trends, with Nigeria by far the most attractive country and fintech the leading sector.

(Source: Diversity Dividend: Exploring Gender Equality in the African Tech Ecosystem 2024 Report)

"Gender inequality has continued to challenge women in Africa's tech community, and some of the findings have made for grim readings. For instance, the total share of funding raised by ventures with at least one female co-founder declined again in 2024," said Emmanuel Adegboye, head of Madica.

"Ultimately, what we find is that after all is said and done, a lot more is being said than done," he added.

(Source: Diversity Dividend: Exploring Gender Equality in the African Tech Ecosystem 2024 Report)

A survey of female founders included in the report found that 79.3% of those surveyed had perceived biases against them professionally because they were women and 69% felt they had lost out on professional opportunities because of their gender.

Over 74% of women felt disadvantaged or negatively impacted by being a woman when speaking to a potential investor and 62% had experienced a lack of cooperation or disrespect in the workplace based on their gender.

The biggest obstacle outlined by the women surveyed was a lack of access to funding (55.2%); behavior of men in professional networks (41.4%); and access to networks in general (37.9%).

Venture capital's impact

African startups received investment from 575 venture capital (VC) firms between the beginning of 2023 and the middle of 2024. Geographic and gender-based data was available for about 423 of this sample, or 73.5% of VCs investing during this period.

Disrupt Africa found that VC funding came from many geographic areas, however its data suggests the biggest chunk of investment into African tech startups, or 33.8%, came from within the continent. Interestingly, among these African VC firms, 44% had female leaders.

The US was the second most active investor base, and 49.6% of US-based VC firms involved had female leaders. There were also many Europe-based firms, and 52% of these had female leaders.

The report's authors commented on female representation in leadership roles within the global VC ecosystem. They said that while it is positive to see an average of 40% to 50% of VC firms boasting a female leadership member, "resoundingly the reality is that there is one single woman on the leadership team, surrounded by multiple male peers."

"Real equality would be where leadership comprised similar numbers of male and female candidates," the researchers noted.

The researchers said that when it asked VCs what proportion of their total global portfolio includes at least one female founder on the team, and what proportion of funds invested went to teams co-founded by at least one female, "the overwhelming majority of VCs declined to answer."

"We encourage them to track this metric, and be more open about their milestones and observations," Disrupt Africa's leadership said, calling for more transparency around the gender representation within VC portfolios.

The importance of gender diversity for startups

Besides Madica, other partners in the report include impact investing firm Goodwell Investments; agriculture and climate focused accelerator program SAIS, powered by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ); and the International Trade Centre's NTF V program.

Nico Blaauw, partner at Goodwell Investments, said there was a long tradition of female entrepreneurship in Africa, yet somehow that has not translated into the startup scene, where there is still a huge imbalance in gender diversity.

"We’re excited to work with Disrupt Africa to uncover some of the underlying reasons for this disparity, and explore how we, as investors, can play a greater role in achieving gender equality," Blaauw said.

Michel Bernhardt, head of program at SAIS, said women were the central pillar of agriculture in many African countries, yet startup innovation on the continent remained a male-dominated field.

"It is important to support more female founders and innovators. Their numbers are growing, but there could and should be more, so that they can develop, test and deploy innovations and technologies that help women in agriculture in Africa to improve their livelihoods," Bernhardt said.

"To do so, understanding the linkages between gender, agriculture and startup innovations is crucial, in order to inspire action and change," he added.

Follow Connecting Africa on our new X account @connect__africa to get the latest telecoms and tech news across Africa.

Adegboye said Madica continues to advocate for the transformative impact of diversity in the startup ecosystem.

"As we continue to champion successful women in tech, making admirable examples of them, we hope it creates a ripple effect and point of reference for the entire industry and also inspires young women to venture and succeed in the industry," Adegboye concluded.

*Top image source: Image by fabrikasimf on Freepik.

— Paula Gilbert, Editor, Connecting Africa