Companies

Why is the funding scenario dismal for women entrepreneurs in India?

Annapurani V Chennai | Updated on March 06, 2020

Women constitute only 14 per cent of the total entrepreneurs in India. Representative image   -  The Hindu

In 2019, only 6.5% of the funding raised among the top 150 funded start-ups in India went to women-founded/co-founded start-ups

“I went out to raise funding when I was six months pregnant. And, I ended up raising funding, but after I finished and when I was sitting with some VC (venture capital) friends, one of them told the other one “You missed out a great opportunity.” He said, “I would have invested, but she is just too pregnant.” This was in front of me. Until then I didn’t know there was such a phrase as too pregnant.

“This was in 2009,” says Anisha Singh, founding partner of She Capital, an early stage fund that invests in women-led businesses, who is also the co-founder of an internet start-up mydala.com.

Almost a decade later, things haven’t improved a great deal for women.

Sure, 2019 was milestone year for funding in India with nearly $20.44 billion (as per Tracxn data) – the highest in five years – invested in the ecosystem. But what share of this pie went to women-led companies?

According to data from Venture Intelligence, a firm that tracks private companies’ investments, financials and valuations, in 2019, only 6.5 per cent of the funding raised among the top 150 funded start-ups in India went to women-founded/co-founded start-ups. And this number is the lowest in the past five years.

This is because the population of women entrepreneurs going out there to get the funding is very small. Right now it is a challenge of low base, says Kshama Fernandes, CEO, Northern Arc, a non-banking finance company (NBFC) that provides access to debt for under-banked individuals and businesses in India.

“The challenge we are faced with is to make sure that more women come into the entrepreneurship arena,” she adds.

Despite accounting for nearly 49 per cent of the total population, women constitute only 14 per cent of the total entrepreneurs in India, according to data on the Startup India portal. And among the top 150 funded start-ups also, women-founded/co-founded firms were just 14 per cent in 2019 (as per Venture Intelligence data).

Swati Bhargava, Co-founder, CashKaro.com, a cashback and coupons site, says, for some women it becomes hard because it is actually tough to manage your health, your family, your kids and work. These pressures are real and not all women get the right support from their partner and their family.

“So, when they don’t get that kind of right support, it becomes harder for them and the numbers start dropping,”she adds.

Furthermore, things don’t become easier for women when it comes to raising funding, be it the socio-cultural issues that draw barriers when it comes to networking or the unconscious biases that are set in the minds of people.

“There are more doubts when it comes to funding ideas spearheaded by women. Women are basically judged to very, very high, very, very difficult standards and also assumed that they will drop off, they won’t be able to pull it off,” says Sairee Chahal, Founder & CEO of SHEROES, an online platform that helps women entrepreneurs in India.

“Men are judged on potential, and women on performance,” she adds.

Often there are questions like what if you get married, how will you balance both, does your husband work with you, do you work from home, etc, Chahal says.

In the recent years, the scenario has been changing. There are incubators and schemes introduced to fund and encourage more women entrepreneurs in society. With the advent of social media and high speed internet, access and knowledge about these have also grown. But will they be enough, considering that only one quarter of women, compared with 82 per cent of men, engage actively in the labour market in India?

Stats and studies show that the only way to change the funding scene for women is having more women sitting on the investing side of the table, says Singh.

Currently, what ends up happening is, the majority of people that you pitch to, are male investors. To define a market for a tampon, by virtue of example, the way it will be defined is, when you pitch to him, he will say, “Let me run it by my wife” and come back to you. It is not the male investor who is essentially defining the market. It is really the wife who is giving the feedback and then he makes his hypothesis on what he sees as the market, which is a little skewed as a process, compared to just having a woman sit on this side of the table, who understands that there is a genuine need and a market out there, Singh adds.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on March 06, 2020
This article is closed for comments.
Please Email the Editor