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Womens Day 2021: Startups and VCs improving on gender parity but miles to go

In 2020, out of India’s top 150 funded startups, 16.7% had a female founder and co-founder, compared to 10% in 2017, according to Venture Intelligence

March 08, 2021 / 11:23 AM IST
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In 2018, when Ahana Gautam was moving back to India from the US, she had to clarify to people that she’s moving back to start up because many around her assumed she’s coming back to get married. The assumption stemmed from the deep-rooted gender bias in India.

Years before that, when she was set to attend the prestigious Indian Institute of Technology- Bombay for her engineering degree, it came as a surprise to people in her hometown of Bharatpur, Rajasthan. “Why doesn’t she do her BSc (Bachelors in Science) like others do, and just get married?” she recalls relatives and elders in Bharatpur saying. In both cases, marriage was somehow projected as the bonafide end goal to her life.

Today she’s the co-founder and CEO of Open Secret, a healthy snacks brand funded by Matrix Partners and Paytm founder Vijay Shekhar Sharma.

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Instances like these are all too common, in India’s startup ecosystem and in many other places, but women acknowledge that things seem to be getting better, and gender parity is moving in the right direction. Data indicates the same too.


In 2020, out of India’s top 150 funded startups, 16.7% had a female founder and co-founder, compared to 10% in 2017, and the highest since data firm Venture Intelligence has been tracking it for the last five years or so. Some of India’s largest startups, including edtech firm Byjus, logistics firm Rivigo and enterprise software firm Zenoti have a female co-founder. They are making their mark. In fact, founders and investors say that there are many more female founders today than a few years back.

Radha K, partner at Unitus Ventures, an early-stage investor says that three years ago, 3 out of every 100 pitches she would receive were from female founders. This has gone up to 10 out of 100 today- still minuscule but an encouraging sign, she feels.

“Not only has the number gone up, these are pedigreed female founders pitching to us. India has a lot of women running small and medium enterprises, running it from home or part-time. This is not that. These are ambitious, well-educated women who are serious about building a big business and want to solve a large problem,” she said.

Anecdotally it certainly looks like the founder world is moving in the right direction. But the lag is still evident. Most women internet entrepreneurs are generally highly educated and have 3-5 years of experience with a conglomerate or a management consultancy. However, this still pales in comparison to many of the male entrepreneurs who either had senior roles at other startups before striking out on their own or are second-time founders in some cases. Many of them have been in the industry for over a decade, and are active angel investors too.

Progress seems slower on the investor side. Senior female venture capitalists in India are a rarity.  Of India’s top 20 venture firms, only two- Kalaari Capital and Lightspeed India have a female partner, according to a Moneycontrol research. Others such as Omidyar Network and Eight Roads Ventures do have a female partner, but these firms tend to invest less than what full time VC firms invest every year and are hence perhaps less influential in the internet investing phase.

“In investor conversations, there still aren't a lot of women in the room. While gender parity is an issue among founders and investors, I think it's got better. Just that comparatively, change has been slower in the investment world, although I'm still optimistic,” said Gautam of Open Secret.

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Firms seem to be recognising this as a priority. For many of the global VC firms, their investors or limited partners are also asking for diversity in investing teams, leading to hiring more young women as analysts and associates. The hope is that over the years some of them can make good investments, stick it out and become a partner someday, given that lateral hiring in senior levels at VC firms is uncommon.

But unsavory conversations still happen. When a female investor recently asked a male peer at another firm why his firm doesn’t have a single female investor, the male investor replied, “Yes we realise that it is all men here. So we hired a few women for operations and portfolio support.” Operations and portfolio support are add-on functions are VC firms, and nowhere as promising or important as the investing vertical in these firms.

"Compared to a few years back, it is definitely better. There is more positive intent, more maturity and recognition of the lack of gender parity. But there's still a huge, huge way to go,” says Anjana Sasidharan, Head, India and southeast Asia Growth Investments at L Catterton.

With more women in the ecosystem at large, founders and investors are also finding it easier to seek mentorship, get advice, and especially early in their careers, navigate what is inherently a risky profession. But this still needs concerted effort, and sometimes more effort than what a man in the same situation would have to put in. Men often have their ‘boys clubs’- groups where they meet, eat, drink and bond together. Sometimes when their company needs an investment, or they want to hire a key person, they exercise these networks.

“As a female investor, you do still need to put in more effort to become a part of the investor ecosystem. To build a network, you have to reach out to people regularly, meet up for a coffee and cultivate strong relationships to thrive,” Sasidharan said.

Some of these women who have climbed the ladder are used to the additional pressure that comes with it and have adapted accordingly. Although not ideal, many of them shrug off the casual sexism because they don't have time to dwell on it, and it is their coping mechanism. The skewed numbers become part and parcel for them.

"As a woman in this industry, like many industries, you need to have thick skin. I started out in IIT, among 28 girls in a batch of 600. Somewhere you get used to how skewed it is, and working against part becomes part of you,” Gautam said.

While women across levels and across functions in the startup ecosystem acknowledge that things are getting better, the rate of change is not ideal. “It is on my wish list to see at least 20 percent of senior teams composed of women over the next five years,” Sasidharan says.

Time and again, diversity in the workplace has also proven to be better for business and profits in the long run as well.

A 2019  analysis by consulting firm McKinsey found that companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile—up from 21 percent in 2017 and 15 percent in 2014.

More so, “the greater the representation, the higher the likelihood of outperformance. Companies with more than 30 percent women executives were more likely to outperform companies where this percentage ranged from 10 to 30, and in turn, these companies were more likely to outperform those with even fewer women executives or none at all,” it said. “A substantial differential likelihood of outperformance—48 percent—separates the most from the least gender-diverse companies,” it added.

All these factors combined are making women more optimistic about diversity in the coming years in the ecosystem.

“You're losing out if you don't have women on your team, as a company or as an investor. They can understand female consumers who make purchasing decisions, connect with products and services aimed at women, and provide clarity of thought and a different opinion. I think everyone is realising this,” said Radha at Unitus Ventures.

Follow our full coverage of Women's Day 2021

M. Sriram

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