Why Investors Should Be Backing Women-Led Businesses in Kenya

If you have been following Kenya’s startup scene, you have likely noticed the remarkable strides women-led businesses are making. From innovative tech solutions to social enterprises driving change in underserved communities, women entrepreneurs are proving their value. Yet, they receive less than 3% of venture capital funding in Africa. The African Development Bank (AfDB) estimates that the financing gap for women entrepreneurs on the continent stands at $42 billion.

So, what is holding investors back?

The issue runs deeper than just lack of capital. Structural and systemic barriers continue to limit access to funding and resources for women entrepreneurs.

1. Homophily bias in venture capital circles: Investors often fund individuals who mirror their own backgrounds, experiences, or networks. Since the majority of venture capitalists are male, this bias leads to an uneven playing field where women founders are overlooked and limits the diversity in investment portfolios.
2. Underrepresentation in decision-making roles: Women hold only a small fraction of leadership roles within VC firms. With fewer women in these critical decision-making positions, there is a lack of diverse perspectives when evaluating the potential of women-led ventures. This results in missed opportunities for innovation and economic growth.
3. Gendered questioning during pitches: Studies show that women entrepreneurs are more likely to be asked prevention-focused questions, centered around risks and potential losses, while their male counterparts receive promotion-focused questions that highlight growth and potential. This subtle but powerful dynamic affects how women’s ventures are perceived and ultimately funded.
4. Limited access to networks and mentorship: Networking is a vital component of securing funding and scaling a business. However, women entrepreneurs often face exclusion from influential networks that are critical for building partnerships and accessing capital. Without strong mentorship and support systems, women founders are left to navigate these challenges alone.

The proof is in the numbers

Despite the structural barriers they face, women-led ventures consistently deliver impressive results. Research by Boston Consulting Group shows that for every dollar of funding, women-led startups generate 10% more revenue than those led by men. Moreover, women are more likely to reinvest their earnings back into their families and communities—up to 90%, compared to 30-40% for men (Harvard Kennedy School, 2024).

In Kenya, this impact is evident through ventures like Elizabeth Nduta’s Gwiji for Women, which connects women from Nairobi’s informal settlements with cleaning jobs, enabling them to support their families and access better healthcare and education. As Elizabeth puts it, “These women are the breadwinners in their families and finding work ensures their families eat, and their children go to school.”

Similarly, Mueni Kioko’s Zaoshinani, a fintech platform, is transforming the agricultural sector by providing smallholder farmers, many of whom are women, with financial tools and market insights. This not only boosts household incomes but strengthens local agricultural supply chains and enhances food security.

Both Elizabeth and Mueni are among the women entrepreneurs supported by the Women in Tech program, which provides them with mentorship, business development resources, and access to networks that help scale their businesses. These businesses are living proof that when women entrepreneurs are given the right support, the ripple effect on society is profound.

Where do we go from here?

Women-led businesses in Kenya have proven they can deliver results and drive impact. What is missing is the backing they need to scale. The question is, are we ready to break down the barriers and actually do something about it?

Here is how we start:

1. Invest with intention: We need more venture capitalists and angel investors who are willing to bet on women-led startups and provide the support they need to thrive. By actively backing women entrepreneurs, investors can not only drive innovation but also achieve higher returns on their investments.
2. Create targeted funding programs: VC funds should actively commit to developing funding programs specifically designed to support female entrepreneurs. Initiatives such as the Standard Chartered’s Women in Tech demonstrate the potential of targeted programs to bridge the funding gap and empower female-led companies. By providing resources and tailored opportunities, these programs address systemic barriers and foster an environment where female entrepreneurs can thrive.
3. Close the information gap: Evidence shows that access to financial literacy and investment readiness tools significantly boosts women’s confidence in securing funding. Women founders who receive training on financial management and pitching strategies are more likely to attract investors and scale their businesses.

Investing in women-led businesses is not about hitting your quota or ticking a diversity box, it is about unlocking untapped potential and driving sustainable economic growth. Women entrepreneurs are already proving their worth. It is time the investment landscape reflects that reality.

The question is: are we ready to support the next generation of Kenyan women innovators?

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