Funding Mother Africa: How Women Can Reshape Venture Capital

The venture capital (VC) landscape in Africa is evolving rapidly, driven by unprecedented levels of innovation and technology. From fintech disruptors to health-tech pioneers, African start-ups are solving local problems while setting benchmarks for global markets. However, the leadership of the VC ecosystem remains starkly unbalanced, with women grossly underrepresented in executive positions. This disparity is a critical missed opportunity for African VCs to unlock their full potential. Increasing female leadership in African venture capital will be a catalyst driving innovation, inclusion, and sustainable economic growth across the continent.

Unlocking Diverse Perspectives

It is becoming widely accepted that diverse teams perform better, make more informed decisions, and achieve higher returns on investment after a 2019 Mckinsey study revealed that companies in the top quartile for gender diversity on executive teams are 21% more likely to achieve above-average profitability compared to those in the bottom quartile. Similarly, ethnic diversity contributes even more significantly, with top-quartile companies outperforming by 36% in profitability.

In venture capital, diversity in leadership is even more critical. Decisions shape the future of industries. In the African context, women entrepreneurs represent a significant yet underfunded market segment, receiving less than 1% of the continent’s total VC funding. Female VC leaders may be more likely to recognise the potential of women-led start-ups, better understanding their challenges and opportunities. This broader perspective ensures that overlooked ideas get the attention and capital they deserve. It safeguards Africa’s next unicorn from the pitfalls of narrow, homogeneous thinking.

Empowering Women Entrepreneurs

Female representation in VC leadership can create a ripple effect, directly influencing the funding pipeline for women entrepreneurs. Studies show that women investors are more likely to fund women-led businesses, fostering a virtuous cycle of empowerment. Disrupt Africa’s recent analysis revealed that of the venture capital funding for African tech startups originating from within Africa, 44% of African VC firms have female leaders.

Comparatively, 49.6% of US-based VC firms featuring female leadership and European VC firms have 52% led by women, highlighting an encouraging trend in gender diversity across the global VC landscape. However, it is common to see teams dominated by male executives, with only a single female ‘representative’ among them.

Across Africa, where women entrepreneurs lead innovative solutions in agriculture, healthcare, education, and financial inclusion, female VCs are critical for aligning capital with community impact. The blueprint is out there to inspire us.

African VCs can draw inspiration from global organisations that have successfully championed women’s leadership in venture capital.

● Female Founders Fund (FFF): This US-based firm invests in high-growth, women-led companies across healthcare, fintech, and consumer products. By funding over 60 women-led start-ups like Zola and Rent the Runway, FFF proves that women founders deliver strong financial returns. Beyond capital, FFF fosters a thriving community of women founders and advocates for diversity in VC decision-making.

● All Raise: Focused on tech, this non-profit aims to double the percentage of women in VC partner roles by 2030. Through programmes like Female Founder Office Hours, All Raise connects women entrepreneurs with investors, breaking barriers to funding while fostering a network of mentorship and guidance.

● Astia: With a global reach, Astia invests in women-led companies while offering mentorship and expert networks. Their model ensures that women in leadership roles receive not only funding but also strategic support to scale.

● The 51: Based in Canada, The 51 mobilises women investors to fund women-led businesses. By democratising access to capital, educating women on wealth creation, and fostering inclusivity, they create a powerful ecosystem that African VCs could emulate.

These organisations demonstrate that where there is representation there can be great impact and profitability. African VCs can adapt these strategies to close gender gaps and build a thriving ecosystem.

What can we do next?

The underrepresentation of women in African VC leadership demands immediate attention. Solving it requires intentional collaboration between VC firms, governments, educational institutions, and advocacy organisations. Programmes like ‘She Leads Africa’ and ‘The Baobab Network’ are already empowering women entrepreneurs, but these efforts must be scaled. Mentorship programmes, diversity benchmarking, and policies incentivising inclusion are essential.

Ultimately, having more women lead African VCs is not just about equity, it is about the immense potential of African women. When women thrive, innovation flourishes, communities grow stronger, and economies prosper. An inclusive venture capital ecosystem is key to unlocking Africa’s vast potential.