Experts Decry Women-Led Startups’ 2% of Africa’s VC Funding

Omolabake Fasogbon

The Head of Product at FlashChange, Emelia Sunday Edet, has warned that Africa’s venture capital ecosystem is inequitably directing resources by underfunding women led startups despite proven efficiency.

The warning follows a 2025 report by research platform, ‘Africa: The Big Deal’, showing African tech startup funding rebounded to roughly $3.2 billion, yet startups led by female CEOs accounted for just 2.2 percent of the total. 

According to her, companies founded exclusively by women also saw allocations drop to 0.9 percent, about $28.8 million of the $3.2 billion, while male only founding teams attracted more than 90 percent of the capital raised during the period.

Emilia said Africa’s economy may be operating below full potential due to limited investment in a segment that has demonstrated strong capital efficiency.

Citing a 2018 Boston Consulting Group and MassChallenge study, she noted that startups with female founders generated $0.78 in revenue for every dollar invested, compared to $0.31 for male only teams.

She stressed the issue is not just about inclusion, but capital allocation challenge. 

“There is a consistent pattern where viable, revenue generating businesses struggle to secure funding despite clear market demand. Investors say they are prioritising efficiency, profitability and sustainable growth, yet the founders who demonstrate these qualities remain the least funded, suggesting the system is optimising for something else,” she said.

Head of Platform and Networks at Ventures Platform, Damilola Teidi Ayoola further attributed existing imbalance to how venture deals are sourced, noting that access to networks and referrals play a critical role in determining which startups receive early stage backing.

 “If you’re not funding women at pre seed, they don’t make it to seed. If you’re not funding at seed, they can’t reach Series A,” she said.

Emilia also linked the disparity to sector bias, noting that many women led businesses operate in retail, agriculture and services, segments often viewed as high risk by traditional venture capital firms. 

She maintained that underfunding these sectors leads to risk mispricing rather than avoidance, leaving key parts of Africa’s economy undercapitalised.

She added that the gap has prevented women led businesses from scaling beyond early rounds, particularly at the Series A stage where institutional capital becomes unavoidable. 

She urged closing this gap to unlock significant economic dividends across the continent.
“This is not about charity or optics; it is about economic efficiency. The opportunity is already there. The question is whether capital will adjust in time to capture it,” she said.