Female entrepreneurs face significantly more hurdles than their male counterparts in starting – and growing – businesses. In addition to discrimination and bias, they also struggle with limited advisors and government support. What’s more, Crunchbase reports that only about 20% of funded companies have female founders.
About $40 billion was raised by female-owned startups in the first three quarters of 2021, highlighting the fact that many women in the U.S. are starting businesses. Yes, $239 billion of venture capital in total was invested in that same period, and yes, $40 billion is just a fraction of that. However, $40 billion is also twice as much as was raised by women-owned startups in 2019 and 2020, marking a significant, rapidly-growing era of female entrepreneurship.
Just like others, female entrepreneurs are looking to tech to help them fuel their businesses. As such, it’s a critical time for entities in banking and payments to watch how this happens – and identify potential opportunities to help. Empowering women in business is not just a “feel good” story – it’s a potential revenue stream.
PYMNTS and Payoneer have collaborated on the Female Entrepreneurs and Technology Playbook, which highlights the disruptions in business caused by female entrepreneurs and technology. We’ve summarized some of the highlights below.
What the Data Says About Female Entrepreneurs
The modern economy is partly powered by successful, women-led businesses. It’s a trend expected to continue in the future, especially given some of the findings reported in a study by World Bank. Female-owned businesses have contributed $3 trillion to the economy in the U.S., employing roughly 23 million people. They’ve grown at more than double the rate of all other businesses – a trend that is not entirely unique to the U.S. Other countries are also seeing 8-10 million SMBs with at least one female owner.
Of course, some challenges come with this growth. Female-owned SMBs are two times as likely to have their loan application rejected than men-owned SMBs. It’s a hurdle that won’t be overcome without proactive efforts from investors to prioritize the success of these businesses.
Bank of America recognizes that investing in women is good business as it prioritizes women in its workforce. It’s one of eight S&P companies with six or more women on the Board. Of its global workforce, more than 50% are women.
Beyond hiring, promoting, and investing in women, technology plays a vital role, too. Digital payments can level the playing field for women-led businesses in terms of faster, cheaper payments to and from vendors and suppliers. It also facilitates seamless cross-border transactions.
A fintech focus on inclusion will be instrumental in helping female founders overcome institutional advantages in both business and their personal lives. Investing in female-owned businesses is key, whether it’s through funding or by creating critical technology that can empower female founders while closing the gender gap.
As a Certified Women’s Business Enterprise (WBE), Arrow Payments is proud to support female founders. For more information about how we can help you leverage payments technology to improve and streamline your business, contact us today.