So, how has 2024 been so far for women-led startups?
Usually, funding for women-led startups hasn’t been all that impressive. Around 15% of the total capital raised in the startup ecosystem from January 2022 to October 2024 was allocated to startups co-founded by women. It’s said that for every ₹100 invested in startups, only ₹16 went to those with at least one female co-founder and just ₹4 was allocated to startups led by female CEOs.
According to the Ministry of Commerce & Industry, about ₹3100 crores has been invested in close to 150 women-led startups through AIFs (Alternative Investment Funds). Plus, the SISFS (Startup India Seed Fund Scheme) was said to have approved close to ₹230 crores in funding for nearly ₹1300 women-led startups.
So, India’s FFS (Fund of Funds for Startups) was said to have approved a corpus of ₹10,000 crores to contribute to various AIFs registered with SEBI. Keeping in mind the disparities that women-led startups have faced, maybe, there’s an imperative to correct the imbalance.
If the Indian government might be looking to commit to women entrepreneurs through these schemes that are in full swing, does this create interesting and risk-mitigated opportunities for VCs and PEs in India? Social cause aside, is this providing some layer of insulation to the flask of women entrepreneurship in India? So, with this kind of endorsement, 2024 might be the year that sets up a new wave of women-led innovation. And VCs and PEs might want to play along.
But, at the same time, maybe VCs and PEs would still exercise some caution without wanting to over-rely on public initiatives. Maybe, that might not guarantee success/ Sure, to some extent, there’s a safety net, but does that entirely eliminate the inherent risk that early-stage investments have? Women-led startups might be just like other startups: in their nascent stages. Maybe, even if there’s some backing in terms of financial guarantees, like most fledgling ventures, there might be a lack of operational or market maturity to sustainably scale.
So, what do you think? What do you think the wave of women-led startup investing by AIFs could mean for PEs and VCs in 2024 and beyond?
