Female founders in Africa are creating businesses that are innovative and have social impact, too.
The latest high-profile scandals in Silicon Valley highlight that the battle for gender equity in the United States is far from won. Despite the tech industry’s progressive reputation, its track record for hiring, promoting and funding women is bleak: Only 17 percent of American startups have female founders.
But halfway across the globe in tech hubs like Lagos, Nigeria, and Nairobi, Kenya, 46 percent of African ventures have a female founder and prospects for closing the gender gap there are high. International investors looking to realize outsized returns and social impact would be well-served to look to the female entrepreneurs driving Africa’s venture growth.
What’s going on in Africa?
Ironically, because the Africa tech sector is still nascent and not yet labeled as a male-dominated field, women find fewer barriers to success than in many of the high-status corporate jobs on the continent that are still, discouragingly, controlled by men. Partially driven by necessity, women across the region have long dominated entrepreneurial activity through informal markets and cross-border trade of goods and services. Risk-taking and selling is already in their blood, and women are now taking this experience and applying it to the digital world.
According to VC4Africa, venture capital funding throughout Africa more than doubled from $27 million in 2015 to $73 million in 2016, echoing the growth opportunity tech founders and investors are seeing in the region. The rapidly expanding tech market is hungry for talent and as a result is relatively gender-blind when compared to the U.S., where the majority of venture capital funding goes to men.
Ethiopian entrepreneur Sara Menker, for example, saw an opening to improve the agriculture industry by aggregating data and providing analytic tools for businesses, governments and investors. Her company, Gro Intelligence in Kenya, addresses the problem afflicting the agriculture industry globally (full disclosure: Dale is an investor in Gro Intelligence). Similarly, female founders like Christina Sass of Andela, which recently raised $24 million from the Chan Zuckerberg Initiative to train software developers in Africa and outsource them to top-tier companies around the world, have also found the region amenable to the scalable growth of their businesses. Besides Lagos and Nairobi, she has offices in New York City.
Investing in these ventures means commercial and social returns.
Female-backed digital businesses are proving to be good for the continent as well as the investors. According to a study by First Round Capital, founding teams including women outperform their all-male peers by 63 percent. Funds such as Alitheia Identity Managers and WBD Investment Holdings are focused on investing in women-led businesses or the social or economic empowerment of women on the continent.
Further research shows that greater support and financing for these ventures has a significant multiplier effect, driving social change, too. As former U.S. Secretary of State Madeleine Albright has noted, women reinvest 90 percent of their income in their communities, families and companies, compared with men who reinvest only 30 to 40 percent.
In Nigeria, Funke Opeke launched MainOne, a company responsible for bringing broadband connectivity to Nigeria, and seven other West African countries, via a 7,000-kilometer undersea fiber optic cable. Her company is also credited with coordinating efforts to provide uncapped high-speed internet access to support young tech companies in Yaba, Lagos, and spurring the growth of Nigeria’s tech scene as we know it today.
Likewise, WeCyclers, founded by Bilikiss Adebiyi-Abiola, has combined profit with social impact to collect and recycle waste efficiently in Lagos. The company utilizes mobile-connected networks of collectors who deliver rubbish for recycling in exchange for virtual points redeemable for essential household items. The company has more than 3,400 partner households and has collected over 525 tons of waste.
And, the opportunity is only growing.
Female entrepreneurship is widespread across Africa’s economies, and the potential is expanding. Zambia and Nigeria have the highest rates of female entrepreneurship in the world, but their female founders have yet to garner significant attention.
Although the region may rank low on other measures of gender equality, newly formed incubators like She Leads Africa and Senegal’s Jjiguene Tech Senegal, means that Africa’s leadership in female entrepreneurship only stands to grow.
At the legislative level, some African governments are taking steps to speed transformation through regulations that support more gender-diverse board composition and equity ownership. While these policies are still young, recent legislation in South Africa points to the potential for future progress. In 2016, the Black Economic Empowerment (BEE) Act was revised to require public companies listed on the Johannesburg Stock Exchange to submit annual compliance reports to the BEE Commission on the promotion of gender diversity at the board level.
Meanwhile, the trend of women working outside the home and their role in consumer spending is only increasing. Digital business models such as Tress, an application that provides hairstyle discovery, salon referral and product sales for an estimated $7-billion African hair-care market, are addressing a long-ignored market.
VCs in Silicon Valley can learn much from what is happening on the African continent. Women entrepreneurs are getting ahead because of their brains and industry. Smart investors are taking notice and will benefit from the economic and social returns that will undoubtedly come.
This story was a guest column by Kauffman Fellow Lexi Novitske, along with Dave Mathias in Entrepreneur. Lexi Novitske (Class 22) moved from the US to Nigeria, believing the country holds immense untapped potential. She launched Singularity Investments in 2014 and is the firm’s Principal Investment Officer, investing in visionary entrepreneurs in technology-enabled, early-stage companies in Sub-Saharan Africa. Lexi holds a BBA from the University of Hawaii, and is a CFA Charterholder.