The disproportionate effect of the pandemic on women extends beyond layoffs and women leaving the workforce; especially pertaining to women entrepreneurs who have been on the lookout to raise capital funding. As the general quantity of venture funding poured into startups inched much higher over the past few years, the quantity of funding for women-led startups and startups led by co-ed groups has declined.
But another massive shift has come to light these days, as figures from 2020 had been tallied: a widespread drop in venture capital funding for women-led startups. This was not simply a part of a usual drop in VC funding in general. In 2019, 2.8% of funding went to women-led startups; in 2020, that fell to 2.3%. This comes after years of increases. The 2.8% figure, while paltry, was an all-time high.
It will probably be a while before all the reasons for this precipitous drop are clear. Some speculate that the pandemic made investors increasingly cautious of risks and they are much more likely to stick to their existing networks — which extends to the “boys’ club”, thus making it harder for women to break into. And even if going outside their networks, many investors will be sticking with “pattern-matching habits,” looking for the equal forms of companies that they have supported in the past, that are often tech companies led by men.
After all, only about 12% of decision-makers at VC companies are women, and maximum companies nevertheless do not have a single female partner, in line with an analysis last year. Of all partners at these companies, only 2.4% are woman founding partners — who, as Fast Company notes, “control an outsize proportion of a firm’s funding decisions. Crunchbase facts indicate greater than 800 woman-based startups globally have acquired a complete $4.9 billion in venture investment in 2020, through mid-December, representing a 27 percent decrease over the same period last year. Although that percentage decline will likely shrink when compared to 2019, as funding from 2020 is belatedly recorded after the end of the year, this year continues to be predicted to show a widespread drop in overall funding to woman startup founders.
But the only hope in all this has been the undying persistent showed by women entrepreneurs across the globe. Despite these challenges, women founders are going out there, creating successful companies. A few women led startups have also managed to woo investors with their lucrative business models, resilience, and potential. And we've spoken about 4 Indian women-led startups that have acquired VC funding recently.
Spark Studio
Seven-months old EdTech startup Spark Studio, established during the pandemic, got its first speculation from Better Capital.
Established by Anushree Goenka, Namita Goel, and Kaustubh Khade, who have an aggregate encounter of 15 years in the EdTech space, Spark Studio works in extracurricular classes with three key classifications of music, communication, and visual arts.
With an educational program created by driving craftsmen and instructional method specialists, it shows youngsters in India just as the Middle East, South-East Asia, and the UK - and more than 50% of them are signing up for second on the platform.
The company stated it has established a levelled curricula with prominent artists as well as pedagogy specialists. These courses are taught online in live classes by experienced instructors and award-winning artists, in the convenience of home. Personal attention and engaging learning are ensured by small class sizes. The content for revision and self-paced learning outside of class follows. Their curriculum is peppered with aspects that keep it age-appropriate and engaging for kids. The company is currently expanding its network of teachers.
Bliss Club
A wellness buff turned business visionary, Minu Margaret began BlissCub as an Instagram people group in March 2020 as a stage to showcase comprehensive wellness stories and spread body inspiration.
Her group first women's sportswear brand BlissClub recently got seed funding drove by elevation Capital with participation from pioneers in the startup ecosystem like Kunal Shah of CRED and Ashish Goel of BlissClub
A fitness buff turned entrepreneur, Minu Margaret started BlissCub as an Instagram community in March 2020 as a platform to showcase inclusive fitness stories and spread body positivity. Her community-first women’s activewear brand BlissClub recently secured seed funding led by Elevation Capital with participation from leaders in the startup ecosystem like Kunal Shah of CRED and Ashish Goel of Urban Ladder. The funds will be used to strengthen the team, product development, and marketing. The subsidies will be utilized to fortify the group, item advancement, and showcasing.
High Street Essentials
Friends since childhood turned co-founders Tanvi Malik and Shivani Poddar have made a great mark on women's style by focusing on India's functioning women populace. The pair took advantage of the quick style market with brands like FabAlley in 2012, and Indya in 2016.
The brands' Delhi-based parent organization High Street essentials (HSE) brought Rs 25.50 crore up in a round drove by existing investors elevation Capital, India quotient, Dominor Holding, and family offices.
The firm had gross revenues of Rs 125.5 crore in FY19, due to booming websites, 30 brick-and-mortar stores, 350 shops-in-shops, and a scaled-up online marketplace presence across its two older brands.
Its achievements came after a year of consistent efforts to expand distribution, expand product lines, and strengthen the startup's technological foundation.
Locobuzz Solutions
Locobuzz solutions, a Mumbai-based digital customer experience SaaS stage declared that it has raised Rs 9 crore capital in a pre-Arrangement A round from Maharashtra State Social venture fund of SIDBI venture capital Ltd.
The funds will be used to upgrade the mechanical abilities of the platform, increase the group across capacities, and for advertising and deals endeavors, the organization said in an articulation.
Established by Shubhi Agarwal alongside Vishal and Nitin Agarwal in 2015 in Mumbai, Locobuzz meets advancements like artificial intelligence, machine learning, big data analytics, and automation. It empowers B2C brands with real-time data analytics, consumer experience automation, consumer insights, and social media management such as publishing, listening, analytics and engagement.
Funding is only the start. It is up to VC firms to stay associated with the advancement of these firms to guarantee they keep up these responsibilities. While a few business people may lean toward additional "hands-off" VCs, research shows a positive connection between VC firm association and the achievement of new companies — particularly when those new businesses are fabricating new plans of action. All contributing implies hazard. In making decisions about where to put venture capital to work, there is no "of course." Yet if the previous year has shown the business world anything, it is that emotional change is required. What is more, VCs should be essential for the arrangement.
The gender investment gap is real, but a female entrepreneur is yet prevailing despite this. The good news - for investors and entrepreneurs, and alike - is there are plenty of women out there making it their job to get great women-led businesses the funding they deserve.
