In the Indian startup ecosystem, the share of women-founded (or co-founded) startups has almost doubled from 10 percent in 2016 to 18 percent in 2022
Illustration: Chaitanya Dinesh Surpur
As India evolves to become a global economic superpower, our startup ecosystem is also witnessing a transformation of its own. According to a Nasscom-Zinnov report on the Indian startup ecosystem, the share of women-founded (or co-founded) startups has almost doubled from 10 percent in 2016 to 18 percent in 2022. Interestingly, they had a similar success rate compared to their male counterparts across all funding stages (seed to late-stage), which confirms that when provided with the right support, women-founded startups produce equally strong economic outcomes compared to their male counterparts.
In a BCG report, global studies have shown that startups founded or co-founded by women typically hire 3x more women and generate about 10 percent more cumulative revenues over a five-year period. We have more women founders today than we did a decade ago, and increasingly more who are CEOs of their own companies. So how did we get here?
The Tide is Turning
When Eight Roads first started investing in India in 2007, women founders seeking venture/private equity funding were few and far between. Today, 24 percent of our companies have a woman as a founder or co-founder, with a large number of them also holding the CEO responsibility. Women founders in India are driving a cultural change, whether through creating cutting-edge businesses or paving the way for the next generation. They play a key role in business, which has helped employment creation and economic progress.
Unlike maybe a decade ago, a woman starting a company today has many more role models to look up to, regardless of sector. The likes of Kiran Mazumdar-Shaw, founder and CEO of Biocon, who built India’s first listed-biotechnology company, Falguni Nayar, founder and CEO of Nykaa, in e-commerce, and Renuka Ramnath, founder and CEO of Multiples Alternate Asset Management, have all broken glass ceilings in traditionally male-dominated sectors.
Women are pursuing professional courses at prestigious institutions, specialising in fields that they’re passionate about and as a result, we see a growing talent pipeline of ambitious women. With better access to myriad professional opportunities, they are now working their way up to more senior and leadership roles in companies. Armed with educational qualifications and significant work experience, women have the confidence, experience, and a network of like-minded individuals to take the next step—start their own company.
Also read: This is me: Indian women founders are taking up space by being unapologetic
We’re also changing as a society. Today, we’re more accepting of women being part of the workforce, instituting structures and processes that allow them to step out and work. At home too, partners and family members are providing support by stepping in to share primary caregiver responsibilities, making it more conducive for women to follow their professional ambitions. The transition from founder/co-founder to CEO is an important one, but with the right level of support and access to opportunities, women are able to honour their ‘entrepreneurial itch’.
According to data from Pitchbook, the total amount of funding received by women-led startups in India has increased to $3.9 billion in 2022 from $850 million in 2016. Therefore, investors are increasingly interested in women-led businesses because they’re seeing a critical mass of these businesses achieve best-in-class growth, profit metrics and generate successful outcomes for their shareholders.
(We) have promises to keep, and miles to go before (we) sleep
Like Robert Frost so eloquently put it, we have made progress but there still remains a lot more to be done. While a lot more women are taking the plunge and starting up, many still hold back, fearing it to be an uphill task—managing societal expectations alongside navigating the stereotypical notions about their ambition and grit to endure the continuous hardships of building a business. Also read: India's Seeing A Flurry Of New Unicorn Startups. What's Going On, And What's Next?
Being active investors in technology and health care for over 15 years in India, we’ve been fortunate enough to work with and alongside some very inspirational women leaders. The last decade has brought with it change, but also the promise of a ‘new’ India. The Indian government has taken several steps to support women founders in the country by introducing schemes such as Stand-Up India, the Atal Innovation Mission, Pradhan Mantri Mudra Yojana and established several incubation centres and skill development programmes like the Women Entrepreneurship Platform by Niti Ayog.
We will continue to see more women start their own businesses, we will witness their successes but as a country, society and ecosystem, we must continue to be supportive, so that they can be the founder and CEO of their own company.
(This story appears in the 24 March, 2023 issue of Forbes India. To visit our Archives, click here.)