Investors take note: MENA Women are making their mark
The Vitality team was overjoyed to see the recent fundraising success of Shady Mokhtar and Reem Abdellaftif, the co-founders of Opio, an Egyptian fashion retail startup. Closer to home, a startup Sehteq– co-founded by Noor Al Kamil and Saif AlJaibeji in the UAE providing low-cost health insurance plans to individuals and SMEs in the U.A.E (covering half a million consumers) in Dubai and the Northern Emirates received $23 million from U.A.E.-based 971 Capital last year.
Despite the resounding successes of pioneering female entrepreneurs like Abdellaftif and Al Kamil, people may fail to realise the immense potential of the MENA region, citing low workforce participation rates for women or some other discouraging metric. Hopefully, one look at these recent success stories will make the path to the future clear. This region is the world’s gateway- connecting east to west, new to old. It has historically been one of the most important regions in terms of world trade and it continues as such, with the help of important achievements by women.
Notwithstanding, women have incredible ideas but still receive very little funding. The Forbes 2020 list of the 10 most funded startups in the region for instance does not include a single startup (co)founded by women. Although this is something the Vitality team has observed firsthand in our experience as the first female-led and focused accelerator of the region, it’s hardly only true in the MENA region. Crunchbase finds that in 2020, global VC funding going to women dramatically dropped, the depressing statistic of the gap in funding between male and female-led startups holds across the world but the commonality is that investors have the power to change that.
While we spend so much time talking about what female founders need to do differently to get treated the same, something very important gets lost in the discussion- the importance of diversity in VC fund panels. For all its demerits 2020 has been a year where this has come into the light thanks to the efforts of women like Lucy Chow (director of Women’s Angel Investor Network). Chow recognises that parity in investment is something that needs to be achieved and that it can only be done when decision-makers (who for the most part happen to be men) understand the importance of more women on both sides of the table.
This is not merely a goal for the sake of appearances, there are very real benefits to having diverse VC Panels and investing in startups that are founded/co-founded by women. In addition to the aforementioned examples, research has continued to prove that the performance of female-led startups is superior. BCG, for instance, finds that on average women receive $100 million less than men in early-stage rounds even though their businesses have been shown to deliver more than twice as much as startups led by men deliver for every dollar of investment.
At a time of global economic distress, which has impacted women the most as they not just form the majority of the healthcare workers but also are much, much more likely to lose their jobs compared to men, it is crucial investors make decisions that are equitable and economically sound- both of which necessitate an increasing role for women in the startup ecosystem as the givers and recipients of investment.
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