Women-Led Startups in India Grow From 600 to 14,400 In Five Years
By: Ayushi Dutta, Correspondent
The exponential growth of female-led startups in India has been a remarkable and inspiring phenomenon in recent years. Women are breaking down traditional barriers and making their mark in a variety of industries as the country continues to embrace entrepreneurship as a catalyst for economic development.
The surge in female entrepreneurship is not only evidence of women's empowerment but also of their untapped potential in the Indian business landscape. This entrepreneurial revolution led by women is reshaping the future of business in India, from changing societal norms to government initiatives and the power of innovation.
The rise of female-led startups in India represents a dynamic and transformative shift in the entrepreneurial landscape of the country. With the right encouragement and resources, women are not only having a significant economic impact, but they are also challenging traditional gender norms and fostering a more inclusive and diverse startup ecosystem. As more women continue to break down barriers and lead the way in innovation and entrepreneurship, the future looks bright.
What do the stats say?
The Women in India's Startup Ecosystem Report (WISER) provides an in-depth look at the rise of female-led startups in India.
Women-led startups in India have increased to 18 per cent in the last five years. According to the report, startups have the potential to create over 2 million job opportunities for women by 2030. It highlights the ecosystem's unique ability to attract female talent. Startups have drawn highly skilled and motivated women seeking unrestricted personal and professional growth.
Women have a 19 per cent representation in sales and a 21 per cent representation in finance in corporate settings. According to the report, the total number of unicorns in the Indian startup ecosystem increased from 13 to 105 between 2017 and 2022. The proportion of women-led startups with a valuation of more than $1 billion increased from 8 per cent to 17 per cent. This data shows a significant increase in female startup leadership, indicating a positive trend toward gender equity and professional development in India's thriving startup ecosystem.
Aiswarya T, Founder, of Finding Roots highlights the factors that have led to women’s surge in the Indian startup ecosystem. “The current level of awareness among women is tremendous. It can be attributed to the country's progressive evolution and the availability of platforms for showcasing their skills and competencies. Boundaries have been removed, allowing individuals to work from anywhere. With innovative ideas, thought processes, industry leadership, and the right skills, nothing can stop them from pursuing their desired career.”
In 2017, there were approximately 6,000 businesses in India, with women leading 10 per cent of these. This equates to approximately 600 female-led startups. By 2022, the number of businesses in India had increased to 80,000. The proportion of female-led startups has also increased to 18 per cent. This means that in 2022, there will be approximately 14,400 female-led startups. The report says that in five years, the number of women-led startups in India has increased significantly from 600 to approximately 14,400. This demonstrates commendable growth and a positive trend in the startup ecosystem toward gender equality.
Challenges Continue to Persist
The report highlights the ongoing challenge of achieving gender equity in startups. While both men and women embark on their startup journeys, women frequently experience slower advancement in terms of job tenure and seniority.
According to Sandhya Rajendramoorthi, Director, Vbgyr IT Solutions women entrepreneurs face a host of challenges. “The primary challenge is Limited Funding. Women-led businesses in the country lack access to capital due to the prejudices of investors and investors are reluctant to invest in women-led businesses. Moreover, many Indian women don’t have property or assets in their name, which comes up as a problem while applying for collateral loans or private financing.”
Sandhya further adds, “In order to invest in and run a successful business, the entrepreneur needs to be able to bear some inherent risk. Women often do not have financial freedom and do not have practice in making independent decisions. They also lack confidence in their own decisions, which makes them risk-averse. Additionally, women have to balance responsibilities of the family which is hindering the mobility of women entrepreneurs. Also travelling alone or staying at hotels for business purposes without worrying about safety.”
VC Backing Still Lacks
The WISER report comprised over 200 startups that included Urban Company, Meesho, and Zomato. The report shows that Indian startups received $5.9 billion in VC funding in 2017, with 11 per cent of it going to women-led startups, where the VC increased to $21.9 billion with a projected 20 per cent share by 2022.
“A Harvard study found venture capitalists often ask women different questions than men. Men tend to be asked questions about the potential gains, while women are questioned about losses. Men are asked about company vision; women are asked about work-life balance. Women-founded companies are often pigeonholed as "lifestyle" companies by investors. Investors simply assume women start their companies to sustain their lifestyle in the short term rather than being committed to the long haul,” says Neha Sampat, Founder & CEO at Contentstack. Neha’s company has so far raised $179 million.
The report highlights the increasing representation of women in startup leadership positions, with 32 per cent of women in managerial roles in startups compared to 21 per cent in corporates and 18 per cent at the CXO level in the startups whereas only 5 per cent in corporates. Startups with female founders have 2.5x more women in senior roles compared to male-founded ones, but significant work remains, with 8 out of 10 men occupying Director-level positions while only 5 in 10 women are at the same position in 10 years of their career.
“Gender inclusivity is neither discriminatory nor biased towards any particular sex. It believes in an equal world with equal opportunities for everyone while celebrating their uniqueness. A gender-inclusive workspace, for instance, does not expect a woman to behave like a man to be considered for a leadership role”, says Kritika Banerjee, Senior Editor, Solidaridad Asia, a CSO that works towards sustainable supply chain.
Indian Government Boosts Women-led Startups
The Indian government recognizes the importance of encouraging female entrepreneurship and has launched a number of schemes and programs to assist and empower women in starting and growing their own businesses. Schemes and initiatives play an important role in providing financial assistance, mentorship, and training to women entrepreneurs, allowing them to overcome obstacles and thrive in India's competitive business environment. They help to break down gender barriers and create a more inclusive and dynamic entrepreneurial ecosystem. Some of the schemes and initiatives are Annapurna Scheme, Udyogini Scheme, Stree Shakti Scheme, Bharatiya Mahila Bank Business Loan, Cent Kalyani Scheme, Mudra Yojana Scheme, Dena Shakti Scheme, Mahila Udyam Nidhi Scheme, etc.