According to a recent report on gender diversity in corporate boardrooms, there is a huge investment gap between male-led and female-led startups in the Middle East and North Africa region, and that closing the gender gap could open up economic opportunities for the region that could reach $2.7 trillion by 2025. It suggested that the MENA region, a new arena for entrepreneurs, does not currently provide equal opportunities for female entrepreneurs, while the past few years had witnessed a significant expansion of businesses, projects and investments, and the emergence of many startups in the region.
A report by Wamda and Digital Digest revealed that startups in the region have raised $3 billion in funding in 2022, while investments worth $646 million were recorded in October. Startups in the UAE received $460 million, Egypt $113 million, and Saudi Arabia $70 million. Although growth was positive for companies in the region, it was not so for startups led by women, which raised only 0.06% of total funding. The report added that while companies led entirely by men received 99.47% of the total investment, startups co-founded by men and women received only 0.47% of funding.
On the other hand, a report on the global gender gap for 2022 issued by the World Economic Forum showed that the region represents the second largest gender gap in the workforce after South Asia. In a report titled “Gender Diversity in GCC Boardrooms,” State Street Global Advisors highlighted that closing the gender gap could add $2.7 trillion to the economies of the region, including the GCC, by 2018-2025. Of the $2.4 billion invested in the first nine months of this year, startups led by women in the region received only 2%, less than $50 million, representing 38 startups led by women out of 482 startups.
Based on responses from 125 female entrepreneurs and startup founders, the majority of 57.8% of institutions believe that investors in the region are less likely to invest in startups led by women than global investors. The fundraising process ranked first among the obstacles faced by institutions, followed by the investor’s lack of interest or knowledge of the startup company’s sector or activity, and the lack of vision or role models. Other factors included societal expectations, lack of financial literacy, and finding a co-founder.