The Middle East and North Africa (MENA) region may be buzzing with fundraising activities by startups, already raking in $2.2 billion in the January-August 2022 period, but capital raising still remains largely a mirage for women-founded ventures in the region, industry insiders said.
The gender bias continues unabated with all-male startup founding teams garnering 99 percent of the total $374 million investments raised in August, while just a paltry one percent went to startups founded or co-founded by women, according to the latest Wamda report.
“There are still barriers to break to see high investment in tech startups with women at the helm,” Ibtissam Ouassif, the woman co-founder of UAE-based BNPL startup Cashew, told Arabian Business.
“The statistics clearly indicate that the reason for the gender imbalance or hesitancy to invest in female-founded startups is nonsensical,” she said.
Ouassif said the hesitancy to support women entrepreneurs is ridiculous “as data showed about 29 percent of female-owned businesses across the MENA region are global enterprises – a greater proportion than their male peers can claim”.
The Cashew co-founder, who is also the chief product officer of the buy now, pay later (BNPL) startup said the reason for this was mainly because women founders, on average, do not give up at the same rate as men.
Of the total 33 fundraising deals in MENA in August this year, Saudi Arabia-based investors were the most active, taking part in 10 deals, followed by their counterparts from the UAE with eight deals.
Saudi-based venture capitalist Waleed A. Alballaa said though female participation in startup creation – as also getting funding for their ventures – has been an issue worldwide for quite a while, this was not the case in Saudi Arabia.
“On the investment side, the ratio [of funding to women-founded startups] may not be as high [in Saudi Arabia] but we’re already seeing a significant change in the trend,” Alballaa, General Partner, Sukna Ventures, told Arabian Business.
Alballaa said in fact females were making considerable progress – both in the startup and investment sectors – with some of them – Outliers and Impact46, for instance — even reaching partner-level positions at VC (venture capital) firms.
“At the angel investing level WomenSpark has been active for quite a while now [in Saudi],” Alballaa said.
He said according to Global Entrepreneurship Monitor (GEM), Saudi Arabia is now the only nation among the 23 high-income GEM economies with higher startup rates for women than men.
Gathern, Taffi, Mrrha, and Sabbar were among the female-founded or co-founded startups that received funding from VCs or angel investors in Saudi Arabia in the recent period.
Sandeep Ganediwalla, the Dubai-based managing partner of RedSeer Strategic Consultants, said the low representation of women in VC funding was not just in the Middle East region but the disparity existed in most parts of the world including the US, which has a relatively vibrant funding ecosystem.
“Women representation is not just low in VC funding but relatively low even in leadership positions in the corporate sector also. Hence, we will need to address the wider issue of women representation in leadership for this to resolve,” Ganediwalla told Arabian Business.
He also pointed out that funding was only one dimension of women entrepreneurship.
“Many women entrepreneurs might be happy to create self-sustainable models which create value but do not need external funding. Hence we need to have deeper metrics tracking overall women entrepreneurship,” Ganediwalla said.
The senior executive of RedSeer, a global consultancy, however, said as far as his experience goes, VCs in the Middle East region were not necessarily reluctant to fund women-funded startups.
“I think that the volume of male-founded startups is larger which gets reflected in the funding also,” he said.
Ouassif also said while the gap was closing, there was still a lot of work to be done.
“As the fintech industry continues to evolve, I hope that in the next few years we will see greater parity in this area,” the Cashew woman co-founder said.
Logistics venture TruKKer, fintechs Tamara and Tabby and proptch Huspy were among the startups in the region which raised significant amounts – either in equity or debt – in the recent weeks and months in the region.
Follow us on
