ISLAMABAD: Start-ups have witnessed a significant growth in the last few years but the share of those founded by the women is still negligible in the Pakistani market.
According to the Pakistan Startup Ecosystem Report (PSER) 2021 released by Invest2Innovate — a startup consultancy firm — there are only three female entrepreneurs for every 10 male entrepreneurs in Pakistan. This disparity is not just limited to the number of female entrepreneurs but also to the amount of investment raised by the women-founded startups.
The report shows that the female-founded startups account for only 1.4% $7.91 million/$563 million of the total amount raised and 6.7% (17/225) of the total deals from 2015 to 2021.
In 2020, the female-founded startups raised $1 million rounds for the first time, including Oraan, a fintech startup. Oraan raised $3 million in seed round in 2021, which is the highest amount raised by any female founded startup in Pakistan.
In comparison, the highest amount raised at the seed stage by a male founded startup QisstPay is $15 million which is five times higher. This shows the gender disparity in access to the capital persists at the same stage. According to a survey, responses show that only 15.6% of the female-founded startups had raised investment compared to 35% of the male-founded startups. The average ticket size by female founders was $66,500, 32% lower than the average ticket size raised by the male-founded companies which was 2.1 million. –INP
The survey shows that an overwhelming majority of respondents think that women are really facing harder tasks. Among the respondents, 73% of startup founders and 75% of investors and Entrepreneur Support Organizations (ESOs) agreed that women face far greater challenges than their male counterparts when raising investment.
Ahmad Niaz, a research analyst in Insight lab of Invest2Innovate, told WealthPK that gender-based glass ceilings are not a Pakistan-specific issue but rather it continues to hinder female entrepreneurs globally. The challenge is harder in some regions than others but it has hardened the resolve of Pakistani female founders to succeed, knowing that they may have to work twice or thrice as hard as their male counterparts do.
Ahmad Niaz said in terms of sector-wise patterns among the female founders, having prior work experience in the sector helps in understanding the dynamics of the market as it does for males as well.
“Any knowledge and experiential gaps can be covered by building a leadership team that may have that domain-specific expertise that a solo founder may be lacking, like having a data-oriented strategist to complement a sales force leader,” he added.
According to the International Labor Organization’s Women Entrepreneurship Development (ILO-WED) program, six framework conditions — legal and regulatory systems, policy frameworks, gender-sensitive financial services, business development support services, access to markets and technology, and representation of women entrepreneurs in policy dialogue — must be assessed in order to create a strong ecosystem for women entrepreneurship.–INP
