- Though encouraging that the number of female CEOs has risen from 230 (9.6%) in 2023 to 310 (11.1%) in 2024, these numbers show a tech segment that is still heavily dominated by men.
- Interestingly, smaller ecosystems such as Zambia, Rwanda, and Senegal are outperforming traditional hotspots like South Africa, Nigeria, Egypt, and Kenya in terms of female leadership.
- Between January 2022 and June 2024, startups with female co-founders raised $747M, representing just 11.9% of the total, while those led by female CEOs secured only $289M.
The African tech ecosystem, renowned for its dynamic growth and innovative potential, is transforming. Yet, a pressing issue remains, gender diversity within leadership roles. This year’s “Diversity Dividend: Exploring Gender Equality in the African Tech Ecosystem” survey by Disrupt Africa highlights the gender disparities that continue to plague this burgeoning industry.
Despite recent improvements, the representation of women in leadership positions within African tech startups remains disproportionately low. The report, which also counts Goodwell Investments, SAIS powered by GIZ, and the International Trade Centre’s NTF V programme among its partners, underscores a significant gender representation gap in African tech startups.
For example, of the 2,786 startups surveyed, only 483, or 17.3 per cent had at least one female co-founder. This figure, while still low, marks an improvement from the previous year, where only 350 startups, or 14.6 per cent had female representation within their founding teams.
Similarly, the number of female CEOs has risen from 230 (9.6 per cent) in 2023 to 310 (11.1 per cent) in 2024. These numbers, though encouraging, reveal a tech segment that is still heavily dominated by men.
The data paints a picture of gradual progress, yet the strides made are insufficient to bridge the wide gender gap. The challenges that women face in breaking into leadership roles within African tech startups are manifold. From societal norms to limited access to resources and networks, women encounter numerous barriers that hinder their participation and success in the tech industry.
Country-specific insights: Diversity in African tech startups
Gender diversity in African tech startups varies significantly across different countries. Interestingly, smaller ecosystems such as Zambia, Rwanda, and Senegal outperform traditional hotspots like South Africa, Nigeria, Egypt, and Kenya in terms of female leadership.
For instance, Nigeria saw female representation within founding teams grow from 16.5 per cent to 20.7 per cent, while the percentage of startups with female CEOs increased from 10.8 per cent to 12.1 per cent. Similarly, in South Africa, the percentage of startups with a female co-founder rose from 13.6 per cent to 18.1 per cent, and those with female CEOs from 8.8 per cent to 11.6 per cent.
Kenya also showed progress, with female representation in founding teams increasing from 16.6 per cent to 20.6 per cent and the percentage of ventures with female CEOs rising from 11.2 per cent to 14.1 per cent. These improvements, while noteworthy, are not reflective of the entire continent. In many other regions, the growth in female leadership is less pronounced, indicating a need for targeted interventions to foster gender diversity across the board.
Funding dynamics: The gender bias in investment
The report reveals a stark reality in the funding dynamics of African tech startups. Between January 2022 and June 2024, an estimated 1,005 African tech startups raised a combined $6.2 billion in funding.
Of these, 220 accounting for 21.9 per cent had at least one female co-founder, a slight increase from 21 per cent reported in 2023. Startups with female CEOs accounted for 11.8 per cent of the total, marginally up from 11.7 per cent in 2023.
However, the disparity becomes glaring when examining the distribution of funds. Startups with female co-founders raised $747 million, representing just 11.9 per cent of the total, while those led by female CEOs secured only $289 million, a mere 4.6 per cent of the overall funding. Although these figures show improvement from previous years, they highlight the persistent gender bias in the allocation of resources.
The report also notes a worrying trend in the first half of 2024, where the share of total funding for female-led teams declined. This regression suggests that as overall funding decreases, investors may revert to traditional patterns, favouring male-led startups.
For policymakers, this trend underscores the need for conscious efforts to ensure that gender diversity remains a priority even in challenging economic times.
Geographical and sectoral trends: Nigeria and Fintech leading the way
When it comes to geography and verticals, the report indicates that funding patterns for female-founded ventures align with broader trends. Nigeria emerges as the most attractive country for investment, with 66 of the 220 startups with female co-founders based in Africa’s most populous country.
These Nigerian startups received 32 per cent of the total funding allocated to female-founded ventures. Kenya and South Africa followed, with 45 and 36 startups, respectively.
Fintech continues to be the leading sector, accounting for 28.6 per cent of female-founded ventures and 33.3 per cent of total capital raised. This dominance is also evident in female-led startups, with 31 out of the 119 funded companies focused on fintech, securing 18.3 per cent of the capital.
These trends highlight the concentration of funding in specific geographies and sectors, which could potentially limit the opportunities for female entrepreneurs in less-established markets or emerging sectors. To address this, countries will need to deploy more inclusive investment strategies that support diverse geographies and industries.
The role of Venture Capital (VCs): A mixed bag
Venture capital (VC) plays a crucial role in shaping the African tech ecosystem. The report examined 575 VCs that invested in African startups during 2023 and the first half of 2024.
Among these, Africa-based VCs were the most active, with 143 firms making investments. However, the gender diversity within these VC firms varied widely across regions.
Africa-based VCs showed a relatively high level of female leadership, with women at the helm of 44 per cent of the companies. This figure compares favourably with the global average, where 48 per cent of firms had female leaders. In contrast, Middle Eastern VCs had the lowest gender diversity, with only 18.2 per cent of firms led by women.
These findings suggest that while Africa is making strides in promoting gender diversity within its VC ecosystem, there is still significant room for improvement, particularly in engaging international VCs to adopt more inclusive practices. Encouragingly, European VCs, with 52 per cent female leadership, offer a model of gender diversity that could be emulated by other regions.
Read also: July financing for startups in Africa hits record $420M as debt funding grows
The road ahead: Ensuring continued progress in gender diversity
Currently, the African tech ecosystem stands at a crossroads. The progress made in recent years, as highlighted by the Diversity Dividend report, is commendable, but it is far from sufficient. The persistent gender disparities in leadership and funding must be addressed through concerted efforts by all stakeholders.
Policymakers, investors, and industry leaders must prioritize gender diversity as a key component of their strategies. This could involve implementing gender quotas, providing targeted funding for female entrepreneurs, and fostering mentorship programs that support women in tech.
Additionally, raising awareness about the benefits of gender diversity, such as improved innovation and financial performance, can help shift mindsets and create a more inclusive ecosystem.
Moreover, there is a need for more granular data to understand the specific barriers faced by women in different regions and sectors. This data can inform the design of tailored interventions that address the unique challenges of each market.
By taking a data-driven approach, the African tech ecosystem can ensure that progress in gender diversity is not just a short-term trend but a sustained movement toward equality.
Toward a more inclusive African tech ecosystem
Gender diversity in African tech startups is gradually improving, but the journey is far from over. The findings of the 2024 Diversity Dividend report highlight both the progress made and the challenges that remain. While there are positive signs of increased female representation in leadership roles and access to funding, the overall picture reveals a tech landscape still dominated by men.
To build a more inclusive African tech ecosystem, it is essential to address the structural barriers that limit women’s participation and success. By fostering a culture of diversity and inclusion, African tech startups can unlock their full potential, driving innovation and economic growth across the continent. As the industry evolves, the hope is that gender diversity will become the norm rather than the exception, paving the way for a more equitable and prosperous future.
