Eight months into 2016 and 670 funding deals worth $2 billion have been closed. Guess what percentage of these deals were bagged by startups with women co-founders or a solo woman founder? A mere three percent. Approximately 14 percent has gone into startups with male and female co-founders, while the rest 83 percent went to those founded by men.
This disparity may not come as a surprise to many, as women entrepreneurs in India are few compared to male entrepreneurs. But women entrepreneurs say that the country’s startup ecosystem too has not been spared of gender bias. YourStory’s research finds that women are sidelined to a considerable extent in sectors they have started up in.
Women entrepreneurs in India are found more in fashion and food tech sectors, than in tech, automobile, Software as a Service (SaaS) or gaming. But even in those two sectors, 70 percent are men, says Usha Amin, co-founder of SAHA Fund, a VC firm exclusively for women. Except Limeroad, founded by Suchi Mukherjee, all leading online fashion portals are founded by men – whether it is Voonik, Wooplr, Roposo, as well as veterans like Myntra and Jabong.
Although engineering colleges are no longer examples of vast gender disparity, entrepreneurship is still a different ballgame, from an IT job, and women hesitate to enter untested waters. Meena Ganesh, Co-founder, Portea, says,
We need more women in finance and technology sectors. Women not being there discourages investors to trust women’s intellectual capabilities. Women have not grabbed the authority over finance yet.”
However, Nidhi Agarwal, Founder-CEO of women’s business wear portal Kaaryah, believes there should be no stereotypes in entrepreneurship. “When I was working with Honeywell, I launched their business in turbo technology. Even in fashion, it is tech-based disruption,” she explains. She was Director, Strategy, at Honeywell India, where she helped them develop their Space and Missiles business, enabling component sales for the ‘Mangalyaan’ mission.
Meghna Saraogi, Founder of Delhi-based fashion startup Styledotme, points out that women understand fashion better. “I know the fashion industry very well, I know how the company will be five years from now. Investors respect it,” she says.
There is also this fear among investors that women are more likely to prioritise their personal life, when the need arises. Nidhi, 35, says:
I am often asked when I will raise a family. It is absolutely my choice alone, and if you think that it will be a problem, then you are not the right investor for me. It is not just the investor who chooses entrepreneurs, but other way around too. You are dealing with these people on a day-to-day basis; they are going to ask you all these questions. So you have to be comfortable with them.”
The unsettling prodding with “settling down” questions put many women on the spot, even as men are never subjected to the same drill. Usha of SAHA Fund admits to the pressure women succumb to. “No matter how educated she is, if things are not going well on the domestic front, 90 percent of time it is the woman who gives up a job. But as an entrepreneur you are married to your work; you can’t give it up. Few women exude that confidence to investors that they can face the challenges. In a pitfall situation, I have seen that men somehow manage it but women struggle,” she says.
That is why having a male co-founder is seen as helpful in winning investors’ trust at times. Rashi Menda, CEO of online luxury goods platform Zapyle, says, “I have a co-founding team; investors believe in you if you have a male co-founder. In a way, your abilities are doubted because you are a woman.” Meghna of Styledotme, however, chose to prove naysayers wrong. “I have been told that without a tech co-founder, no one will fund you. But I made it without a tech co-founder – passion is what matters, not gender,” she explains. Styledotme raised funding from Indian Angel Network (IAN) earlier this year.
Then there is the fear among investors that a woman cannot build scalable startups, as priorities purportedly change for her over time. Swati Bhargava, co-founder of cashback platform CashKaro, concedes:
Having to choose between biological clock and career aspirations, most women dump the startup. Also, a majority of women start up in sectors that are not scalable or will evolve into billion-dollar industries.” CashKaro is backed by Ratan Tata and Kalaari Capital.
Of course, men build non-scalable startups too. Sanjay Nath, Partner, Blume Ventures says, “I won’t generalise that male entrepreneurs build more scalable startups. They are just more in number. In fact, if you are a woman entrepreneur you have tremendous advantage as you can position yourself differently.”
There is a call for more role models and mentors for women, to inspire them and help them ease into a male-dominated ecosystem.
This is where an informal network of mentoring helps. Meghna says: “I have had an amazing experience with Indian Angel Network in terms of support, motivation, mentorship. They help me connect to more people for the next round of funding. Without reference, most high-profile women do not care about young women entrepreneurs.” Nidhi of Kaaryah and Meena of Portea often mentor women entrepreneurs who reach out to them.
The skewed gender ratio manifests in investor circles too, with only a few women in the business - Vani Kola of Kalaari Capital and Renuka Ramnath of Multiples Equity being the prominent ones. More representation would help encourage women to come forward. Rashi says,
When I enter an investors’ conference room, I wish for at least one woman at the table. Once it did happen –and my pitch changed when I saw a woman at the table. I felt more comfortable.”
Some issues are deep-rooted and require a systemic overhaul of thinking. Founders highlight a host of mistakes made while raising girl children due to preconceived notions and societal pressures for conformity.
Usha of SAHA Fund says, “We are still a patriarchal society. But girls should be taught independence during schooling - on how to handle anything and not feel helpless or pressured down.”
A major cultural element is at play here. Rashi says: “Women are taught not to take risks; they grow up sheltered and are then married off as young adults. But I was brought up the same way as my brother. You have to give time to family and in-laws. But when you also get to do what you like, it is balanced.”
Many women have good ideas but do not take it forward because there is no support. Usha says, “We need lot of training, awareness, and bring up the topic of why things are not working for women in the society.” Meena of Portea agrees. “They need to be told that it’s okay to take risks. It is happening now more than, say, five years ago,” she adds.
High-profile, influential women starting up will keep the conversation on women empowerment going and help change mindsets. Rashi of Zapyle says: “Media is changing the attitude, investors’ hesitation is changing. They appreciate you doing everything by yourself. But it should be acceptable that if a man can work 14 hours a day, a woman can do it too.” Portea's Meena stresses on government's increased commitment to women, via tax deduction and incentives, as well as bank loans with low rate of interests.
Recently three startups from empoWer, an accelerator for women entrepreneurs, received equity-free seed funding from Department of Science and Technology, and Vodafone. The Central government’s much acclaimed Startup India, Stand up India scheme provides loans between Rs 10 lakh and Rs 1 crore at concessional interest rates for women entrepreneurs. Last year, MSME ministry launched schemes for women entrepreneurship development like Trade Related Entrepreneurship Assistance and Development (TREAD) Scheme, which provides trade-related training and counselling.
Finally, the success and career trajectory of someone like Radhika Aggarwal, Co-founder and CBO of online marketplace ShopClues, perfectly decimates any argument against women's prowess in entrepreneurship. The sole woman in the glamorous startup unicorn club recently told YourStory, “When we started ShopClues, each one of the team members owned a domain – and were the only people in that domain. I ran marketing alone for eight months. I don’t know how I did it; now we have a team of 140 people running it.”
One day gender will be redundant – but now, women-led organisations will struggle to find the right balance. If society as a whole focuses on what women and men can bring individually, it can lead to optimal utilisation of resources.