More Women Startups in 2022 Will Further India’s Growth

Harnessing the full potential of women startups can promote innovation, economic growth, and job creation, and that is what India need to achieve as we step into year 2022. In the Year 2021 the Indian startup ecosystem raised record funding during the three quarters of 2021, with the investment inflow in Q3 being the highest in seven years at $12.82 billion.

Despite the funding acceleration, women-led startups garnered less than two percent of the overall funding despite several marquee studies pointing out women-led startups fare significantly better.

According to the National Sample Survey, only 14% of the businesses in India are run by women entrepreneurs. Most of the companies are bootstrapped and run on a small scale. The global disparity is evident in a report which says nearly 126 million women have their own business across the globe while Indian women linger around the 8 million mark; a paradoxical statement given that India is the second most populous nation in the world.

Even when a grand total of 42 startups entered the coveted unicorn club during 2021, only 10 percent of them were led by women — signalling that a lot still needs to be done to achieve gender equality in the startup ecosystem.

This is because women startups face significantly higher challenges as compared to men. A dipstick survey conducted revealed that most women entrepreneurs faced the most resistance when it came to convincing people that they were “serious” about their business.

This results in poor investment inflow. Of the $49.23 billion raised between 2018 and 2021 YTD, startups with women as co-founders accounted for only 5.7 percent and solo women founders received only a measly 0.90 percent of that pie.

Women Startups in India how they fare today

Women Startups India

Regardless of gender, starting a business is a difficult prospect. Key challenges for women startups in India include generating funding, limited understanding of customers, penetrating the market, hiring qualified employees, and the 22complex regulatory environment. For women entrepreneurs, however, there are additional barriers which are part of a broader and more pronounced gender gap in the male-dominated Indian society

  • About 58% of the female entrepreneurs were in the age range of 20-30 when they started out.
  • Nearly 73% of them report a revenue of approximately Rs 10 lakhs in a financial year.
  • Almost 57% of these women started out solo, i.e., without any other member.
  • About 35% of the women had a co-founder.
  • Roughly 71% of the Indian female entrepreneurs employ five people or less.

However, there is a silver lining. Falguni Nayar-led beauty and cosmetics retailer Nykaa — one of the few women-founded startups to touch unicorn status — got listed on the stock exchanges and made its founder the richest self-made billionaire woman.

Harnessing the full potential of women entrepreneurs can promote innovation, economic growth, and job creation. This article has described the current situation in India and identified causes that explain the low female entrepreneurship rate in the country. Overcoming these challenges depends on grit and passion of individual women themselves, as well as tackling structural factors in the external environment, which they alone have limited control over.

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