What gender parity? Share of startups led by women declined in 2019, again

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Published: December 30, 2019 1:52:46 PM

The share of funded startups with at least one women co-founder, in fact, has only gone south in the past three years.

India may have around 9 lakh new women entrepreneurs by 2025 in food and education sectors.

Despite focusing on improving gender diversity among Indian startups, the current situation doesn’t seem encouraging. A recent study by venture debt provider InnoVen Capital revealed that the number of funded startups with at least one female co-founder declined in 2019 to 12 per cent from 17 per cent in 2018. Overall funded startups in 2019 were 887 that raised $14.5 billion — up around 26 per cent from last year, recent data from Tracxn showed. The data shared by InnoVen, which focused on early-stage (angel and pre-Series A) startup deals, said Rs 693 crore was invested in 93 deals in 2019. The amount — highest in the last nine years, nearly doubled from Rs 334 crore put in 76 deals in 2018. 

The share of funded startups with at least one women co-founder, in fact, has only gone south in the past three years — from 22 per cent in 2016 followed by 20 per cent in 2017. The fall comes amid the importance of women entrepreneurship that has caught the government’s attention as well as it announced earlier this month of having 10 per cent of the SIDBI’s Rs 10,000 crore Fund of Funds (FFS) for startups reserve for women-led startups. The total number of women-run businesses, nonetheless, has remained tiny — only 14 per cent according to the Sixth Economic Census (2014) while according to Mastercard Index of Women Entrepreneurs 2018, women entrepreneurs were only 11 per cent of the total business owners in India.

Also read: OYO, Paytm, Sequoia, Accel top deal makers of 2019; startup funding jumps this much from last year

India may have around 9 lakh new women entrepreneurs by 2025 in food and education sectors even as there is already a large share of women as employees and entrepreneurs in the two sectors, said a report on women entrepreneurship in urban India by Global Alliance for Mass Entrepreneurship (GAME) and Facebook. From 28.1 lakh women-owned businesses in urban India, 6.8 lakh and 5.5 lakh are in textile and food while 2.5 lakh are in personal services and 1.2 lakh in education. However, food and education sectors have highest women entrepreneurship potential as “these two sectors also offer the highest economic potential and easy-to-start business models, strong headwinds and tailwinds (example where employment levels are much higher than entrepreneurship levels, offering a natural tailwind for entrepreneurship in this space),” the report said.

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