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Why the start-up environment in Nigeria is male



Why the start-up environment in Nigeria is male

Startups in the nation raised $142.8 million in 2022.

•Female start-ups received just $24.1 million.

•Female CEOs are currently revising their plans.

Nigeria’s startup environment may be anything but feminine. Notwithstanding the fact that there are currently 54 female CEOs leading start-up companies in the nation.

Based on the amount of money drawn to the industry in 2022, female-led start-ups may only be marginal players when the genuine discussion about the ecosystem is on the forefront of the agenda.

It’s interesting to note that the problem is not unique to Nigeria. Female-led start-ups are falling behind in all of Africa.

Several studies and research have supported this opinion. According to Disrupt Africa’s research of a database of 2,395 African tech startups, 230 of these companies are run by female CEOs, 54 of them are from Nigeria, compared to 448 male CEOs.

According to Disrupt Africa, Nigerian businesses raised $142,828,000 ($142.8 million) in funding in 2022; however, only $24.1 million of that total was garnered by start-ups with female founders.

However, according to a separate study titled “Diversity Dividend: Investigating Gender Equality in the African Tech Ecosystem,” just 230 of 2,395 African tech businesses — or 9.6% — have female CEOs. These startups received only 2.9% of all investment in 2022.

Another study, “Africa: The Big Problem,” said that in 2021, male founders earned 87.5 percent of all incoming capital to Nigeria while female founders raised only 1.4 percent of that amount, with the remaining 21 percent going to gender-diverse teams.

Also, it was observed that as of July 2022, just 1.13 percent of the funding in Nigeria had gone to female entrepreneurs.

According to the World Bank’s blog, only 3% of early-stage funding since 2013 has gone to all-female founding teams, compared to 76% for all-male teams in Nigeria and other African countries, underscoring the gender gap in the ecosystem.

Several female chief executive officers in the ecosystem are calling for a fresh approach to find a solution to the problem, though.

They have outlined some of the potential causes and are experimenting with potential fixes to improve their financing performance.

Comfort Onyaga, founder and CEO of an Agri-insurtech company called Izanu Africa, stated from her experience that “lack of business analysis damages us investor’s interest. You’ll observe that regardless of whether she has the resources, women pursue their ideas with fervour. No matter what the financial consequences could be, she just jumps in and wants to get going.

“I entered the start-up ecosystem as a founder in that way. But, we don’t really analyse the risks or what lays ahead before getting into the ecosystems; instead, we just run with our passion. Male people would want to have some form of fall-back stream of income before making big appearances on the stage.

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“A man who has been putting money aside will probably draw in more friends. So they have all the resources they need to bootstrap and gain that kind of substantial traction to draw investors from day one,” she continued.

Yet, she cautioned: “We need to enter the field with the same level of awareness that men do, as well as the resources necessary to bootstrap human resources.

Then, find the proper people who are prepared to offer their time and resources at that early stage so that you can create a business case compelling enough for investors to invest.

Ifeoma Uddoh, the founder of the Fintech company Shecluded for women in Nigeria, has a distinct perspective on the stark disparity. She thinks that the investment and entrepreneurial ecosystem contains unconscious bias and gender stereotypes, including the idea that businesses managed by women are more dangerous or less successful. Notwithstanding this bias, she continued, few women have access to the wealthy networks and relationships that are necessary for obtaining funding.

Doyin Abiola-Tobun, the creator of ARK, a prop-tech firm that creates a complete storage and inventory management solution, also spoke and emphasised that while the gap is obvious, it is not unique to Nigeria.

As female founders, we must intentionally balance making progress in addressing financial discrepancies with offering ideas that have unquestionable market value. It is essential to have a steady stream of deals coming from female founders who are dedicated to providing important answers for pressing issues.

She remarked, “It is crucial that we never forget that funding by nature pursues the promise of exponential value.”

She asserted, however, that despite institutional investors’ and venture capitalists’ best efforts, the playing field cannot be levelled. “Despite the widespread perception that female founders face disadvantages, the difficulties are manageable.

Female-led start-ups should seek out mentors and sponsors who can provide important direction and support as well as help create communities and camaraderie that can benefit from the pooling of non-financial resources. Each of these enabling elements has directly helped me, she noted.

According to Mr. Emmanuel Adegboye, Head of a Program, Pre-Seed Stage Technology Agnostic Companies in Africa, Madica, the conventional perception of leadership as a male-dominated sector is one factor that is impacting female-led start-ups. Others include inadequate assistance, a lack of female mentors and role models in the computer sector, and difficulties juggling work and family.

He claims that from the start, women’s interest and participation in the IT business are hampered by the lack of encouragement they receive to pursue computing careers in both school and the home. Challenge preconceptions, encourage STEM education among young females, and highlight the variety of employment options available in the tech sector should be the main areas of attention.

In order to ensure that the right balance is struck and that founders have enough time to concentrate on carrying out their daily tasks, he pointed out that Madica incorporates a structured programme that is focused on assisting startups achieve their set objectives over a period of 12 to 18 months in a convenient way.