Tuesday April 23rd, 2024
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Addressing the Funding Gap for Female-Led Startups in the MENA Region

Despite global trends, these women and movements in the MENA region are working to change the narrative on financing for female-led startups.

May El Habachi

When Shamim Kassibawi launched her startup Play:Date in 2017, she spent a lot of time testing her app in the UAE to make sure it was a good fit for families before rolling it out to other countries. Although the app is now available on iOS and Android in 126 countries, the path to fundraising had not been easy for Kassibawi - an experience that was echoed in the efforts of female entrepreneurs across the MENA region.

“It’s more challenging to be taken seriously, especially when you have a parenting app,” Shamim Kassibawi tells StartupScene. Although the startup was able to secure funding soon after the pandemic hit in 2020, attracting investments afterwards proved to be an uphill battle. “How do you explain this to an older male when they decide who they are going to invest into? They’re just never going to get it.”

In the MENA region, less than $50 million was invested in startups founded solely by women in the first nine months of the year. That is about 2% of the total $2.4 billion in regional investments, according to a recent report by Wamda. Meanwhile, startups with both male and female co-founders only raised $127 million, or 5% of total investments.  These figures reflect global trends where female-led startups tend to receive significantly less funding than their male counterparts. In 2021, just 2%, or $6.4 billion of VC investments was directed at female-founded startups, according to research by PitchBook. 

While these numbers may seem grim, the tide is slowly turning, with some women in the region taking matters into their own hands to tip the scales in startup investment.


In the UAE, a movement called 2022 Female Angels was created earlier this year with the goal of having 2,022 female angel investors by the end of 2022. In a few months, the movement grew into a fully-fledged operation with multiple committees, advocates, and ambassadors. Today, it has 600 women signed up as angels. 

“Only 15% of investors are women,” says Lucy Chow, Angel Investor and Steering Committee Member of 2022 Female Angels. “So, we’re working to change that. The goal is essentially to have more women at the decision-making table to hopefully level out the gender equality in the investment ecosystem in MENA.” Working with a network of angel investors, the organisation aims to fund startups led by women or co-founded by both men and women, and encourage women to learn about investing, in hopes of getting them to become angel investors themselves. 

A similar initiative is also taking place in Egypt. Tiye Angels, the country’s first female investment network, is working to bridge the gender gap in investment for startups led or co-founded by women. Established in 2021, the organisation works to identify, train, and equip female angel investors with the right skills to fund promising startups.  “You can have as many incubators and programs as you want, but at the end of the day if no one invests in these female entrepreneurs, what’s the point?” Ola Al Dajani, Co-Founder of Tiye Angels, tells StartupScene.

International VCs are also starting to play a role in increasing access to funding for female founders. On November 10th, VC firms Playfair Capital and Global Ventures launched the Female Founder Office Hours (FFOH) for the first time in the MENA region to address the gender imbalance in financing. Established in London in 2019 to support successful women-led companies, FFOH hosted a virtual mentoring session for over 400 women founders and 150 VCs.

“We realised that there are some really interesting and talented women founders in the region, but there is still not widespread access to capital and mentorship,” Chris Smith, Managing Partner at Playfair Capital, says. “One of the things we want to do is to have the founders in the region be able to connect with not just the local investors, but with international investors to help women founders build new relationships, connect with mentors, and ultimately secure investments.” 


While there seems to be positive change happening in the investment space, it’s still not yet translating to much progress on the ground, particularly since venture capital (VC) is mostly male-dominated. According to a study commissioned by the European Women in VC, an average of 85% of general partners at European venture capital firms are men, and only 15% are women. This lack of representation may impact how female entrepreneurs are funded. “A lot of women are starting their startups in certain sectors like edtech, femtech, luxury retail, online shopping, and so on. Most VCs and angel investors are men, many of whom don’t fully understand or are interested in these fields,” says Al Dajani. “There is definitely some affinity bias, which is understandable because people invest in what they know.”

Indeed, Wafa Al Obaidat, Co-Founder of edtech platform Playbook in Bahrain, knows what it is like to have investors not fully understand her product. An educational platform dedicated to accelerating women’s career growth, Playbook was sometimes overlooked by male investors, as some didn’t grasp the pain points that women experience in building their careers. 

“I’m building a platform for women,” says Al Obaidat. “So, a man might be like, ‘It’s a great idea but I don’t get it’. They don’t have these issues or challenges at work, and they don’t need to worry about work life balance as much. This is why we need more women investors, because they might recognize business opportunities that men won’t.” Another reason for the funding gap is that men and women tend to get asked different questions by VCs. Male entrepreneurs are usually asked questions about their potential gains while female entrepreneurs are asked about their potential losses, according to a study published by Harvard Business Review. The difference may be subtle, but it is believed to impact funding.

“Whereas men are asked about their future vision and their growth, women are often asked about the nitty gritty details, such as ‘when will you break even? Are you really able to achieve this? Tell me about this number or that number’,” explains Al Dajani. “There is bias inherent in the system. It’s not like female entrepreneurs have fewer interesting ideas. It’s that from the idea to actually being investable, there are so many steps where women can fail along the way.”


The onus, however, shouldn’t only be on having more female investors or addressing bias in the VC space, although that is certainly necessary. Women also have an important role to play if they wish to lead successful businesses. Rania Ayman - Founder and CEO of Entreprenelle, an organisation that is dedicated to bridging the economic gender gap for women in Egypt - believes that more women need to enter the entrepreneurial space to level out investments in female-founded startups. “Because there are fewer female entrepreneurs than men, investments in female startups are less,” explains Ayman. “We need to see more female entrepreneurs entering this space.”

Silvia Eldawi, Co-Founder and COO of UAE proptech startup Keyper, also agrees. “Whilst it would be nice to have more of a balance in the VC space, we can’t expect it to be commensurate with more funding for women-led startups, unless more women take the leap in the first place,” she says. “They might be holding off to either achieve product market fit or generate a certain amount of revenue before entering the investment realm. Don’t wait for any product or revenue milestones, don’t think it’s too early and don’t fear rejection. Believe in your vision, dust yourself off and keep persevering.”

Regardless, times are changing. Just as entrepreneurship has been evolving over the years, so will the investment landscape. By having more female entrepreneurs and angel investors in the startup ecosystem, it will likely create more opportunities for female founded businesses to grow and flourish in the region.  Dina El Mofty, founder of INJAZ Egypt, an organisation with a strong educational focus on entrepreneurship, is already seeing change happening in the region.

“I’m starting to see more investors in female-led businesses, and mandates on some funds, particularly institutional funds, focusing more on women,” El Mofty says. “But it has to come hand-in-hand with more viable businesses coming out as well. It’s not whether or not it’s going to happen. It’s going to happen. It’s just a matter of time.”


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