Written by Elisa Koek
In 2020, 14% of the total investments in Africa went to women-led startups, according to the annual report of The Partech Africa Team. Although this number is significantly higher than in the United States, where only 2% of investments were received by women-led companies in that same year, there is plenty of room for improvement. Especially since the percentage of investments going to female founders in Africa rapidly decreases for investments over $1million.
Sarah Dusek, a female entrepreneur and member of our CEO Network, started Enygma Ventures, an investment fund for female entrepreneurs and women founders, in 2019, just before the pandemic hit. In 2020, Enygma was already the second most prolific investor on the continent, responsible for almost all of the investments made into women-led start-ups in Africa.
As a female entrepreneur herself, Dusek is familiar with the pitfalls and barriers on the road to success. She was co-founder of the leading US adventure hospitality company, Under Canvas, a company that set a new standard in ecological development with sales rising to $30 million annually. In 2018, Dusek successfully sold the company. Her achievements did not go unnoticed and her leadership resulted in a spot on the coveted Inc. 5000 list in 2017 and the entrepreneurial Winning Women list from Ernst & Young*.
An unexplored frontier
Dusek believes that women are critical in building nations. Dusek states determined. She is on a mission to shift the numbers by helping women reach their full potential and deploy capital to reach their goals. When Dusek joined a volunteer trip to Africa in her early twenties, she discovered the unexplored potential for growth of this continent.
‘Businesses are the heart of economies’
“Businesses are the heart of economies and nations”, Dusek explains. “And, South Africa has a particularly interesting environment.” Dusek refers to the continent as an unexplored frontier. “With a history of legalized racial inequality, Apartheid, and present gender, geographic and racial inequality, the country offers many challenges, yet promising opportunities.”
Gender inequality is a global phenomenon
Dusek emphasizes that inequality is a global issue that is not any different in other continents. “Even in the US, we know that there are significant issues in society, and segregation is tolerated.” Only 2.3% of the total investments in the United States landed in women-led startups in 2020, according to Harvard Business Review. Although the position of women for capital funding has never been equal to that of men, the lockdown of 2020 resulted in a disproportionate 28% decrease in funding for female entrepreneurs. While men experienced a decline of just 5.4% during the same period.
But, why should we all care about inequality? What difference will fostering inclusion make for the remaining part of a population? “Equality is not about getting control, but about creating parity”, Dusek explains. “Without parity, every member of society will experience the consequences.”
Gender Equality to drive growth
Dusek refers to our current ways of living as a path to self-destruction, a world in which we are not solving our issues, but perpetuating them. “When most of the world’s wealth is controlled by just 1% of the world population that happens to be in a certain geographic area and of a particular gender, how can this be good for the other 99%? Climate change, poverty, and pandemics are just some examples of the results of the world we currently live in.”
Women play a crucial role in growing nations
Dusek states that equality can lead to a better world. She is convinced that women must have a seat at the table. “Women play a crucial role in building and growing nations as they solve different problems than men: they address and notice issues from an alternative perspective.”
‘Women create solutions for the ones that are unserved. This generates jobs, and builds the economy’
As an example, Dusek refers to one of the female-led start-ups that recently received funding with Enygma’s support. This start-up focuses on financial inclusion. “Millions of people in Africa are considered unbanked meaning they are utilizing a cash economy of sharing. Their money is not making it into the global economy and they do not have access to loans or other resources. This new start-up is finding models to change this: they are banking the unbanked.”
As a result of this start-up, more people get access to services and are able to participate in the economy. Dusek emphasizes that this is a brilliant market opportunity. “This is an example of how women create solutions for the ones that are left behind, or unserved. When services and goods are widely available, it generates jobs, builds the economy, and helps a nation forward.”
A two-way street: ‘Women tend to micro scale’
According to the World Bank, all-male founding teams receive approximately US$25 for each US$1 an all-female team receives in Africa. An important aspect that must be mentioned is that female entrepreneurs are often less likely to pitch for investments than their male counterparts as most women prefer loans or organic growth. The World Bank also mentions that a lack of networks and access to knowledge constrain female entrepreneurship globally.
“Women often don’t think big enough or don’t see the bigger picture”, Dusek expands. “They tend to micro-scale their plans instead of macro scaling the potential.” According to Dusek, this is one of the gaps she tries to bridge with Enygma by educating and actively monitoring the women to make them ‘investor ready’.
Another important aspect that often arises, according to Dusek, is the confidence gap of female entrepreneurs: the confidence to execute their dreams and plans. This is the moment when an entrepreneur needs to prove herself and sell the product. “To be successful you need to show others that you are convinced of your success: you need to sell your story with confidence and truly believe in it. This is a thorny issue that we try to tackle together.”
In Africa, a reliable network to spar about an idea is often missing due to social-economical barriers resulting in the inability to properly research the viability of a product. This confronts African women with yet another disadvantage. “Therefore, we actively research the demand for a product”, Dusek explains. “We spar together and examine if their dreams can become successful in order to provide African women with a solid foundation to create a viable business.”
‘The pandemic as a transition period’
When Dusek started Enygma in 2019 she did not account for a pandemic to happen, however, it did not make her throw in the towel either. On the contrary, it resulted in an acceleration of her goals. She realized that this was the moment to forge her head and push the button to drive real change.
“The pandemic is a moment of transition for the entire world”, Dusek emphatically states. “It showed us that we need to scale more businesses to tackle some of the world’s biggest challenges. Now, more than ever, It is essential to build more equal platforms where everyone can thrive.”