Investing in Female led Startups Economically Beneficial in MENA

The UAE is the future of startups, with unique opportunities for growth and funding and immense government incentives. Earlier this year, the country received global recognition for being a fertile and strategic land for entrepreneurs and new business setups in Dubai. According to recent studies, the country’s growth is unstoppable when it comes to the rise of entrepreneurial startups. The UAE has proven to be a regional superpower in promoting equality, diversity, and inclusivity in the workplace, as the Global Gender Gap research revealed which encourages investing in female led startups. The country does not deviate from the fact that entrepreneurs are the cornerstone of the global financial system. 

The government effectively recruits top international talent through its programs and laws. Based on the most recent numbers, a whopping 95% of firms in the country are small to medium-sized businesses (SMEs), and women own at least 50% of them. 

Approximately 20% of the employed workforce are women, contributing to nearly 20% of the UAE’s GDP.

Female led Startups

Where does the problem lie? 

However, these numbers do not correspond with the rest of the MENA region. Women-led startups receive comparatively less VC funding than male-owned SMEs. Gender bias in business persists. Male-owned startups receive up to 99% of the funding, while women only account for a mere 1%. 

Internationally, and particularly in the MENA region, early-stage female founders face networking opportunities and funding challenges. Despite the numbers increasing from previous years, the funding received is derived from the stage the business is at. In 2020, companies with at least one female founder received 23% seed money, 19% early-stage funding, and 9% late-stage financing. The figures for solo (women) entrepreneurs are expected to be even lower. 

What are the main obstacles to fostering a more robust business ecosystem in the MENA region?

The region possesses distinct qualities in that it has a tight cultural overlap. However, MENA still has to come a long way in terms of trade and investment. Compared to international markets, the region’s funding availability is somewhat limited. To increase the threshold, investors and entrepreneurs must work together more.

Further issues abound in finding the right talent with a strong team of professionals. Additionally, a sound concept and a workable business plan appealing to the right market add to the concerns. 

We discussed the dearth of assistance and funding for women-led businesses. Now, let’s look in the other direction and understand what investors look for before making an investment.  

What key elements are taken into consideration for a potential investment in  female led startups?

  • The size of the market that the business concept can reach
  • The creativity of the business concept 
  • A fresh recruit of talent 
  • The business’s durability in the industry
  • the team’s and company model’s flexibility in the face of problems
  • Enthusiasm and a genuine desire for the business

If the current momentum in the employment of female entrepreneurs persists, it can take up to 135.6 years to eliminate the gender gap globally, according to the Global Gender Gap Report 2021. This urges stakeholders and entrepreneurs to close the gender gap and allow more women to join the workforce. According to a Bloomberg estimate, the inclusion of women in the workforce could increase the global economy by $20 trillion by the year 2050.

If you are a woman, full of ideas, and looking to establish a new business setup in UAE, let us assist you. We can guide you in taking the proper steps to set up your business.

 female led startups

Future of Women in the Workforce

In the MENA region, women could radically change the workforce, mainly because they add considerably to the talent pool in most MENA nations, which is still largely untapped. According to UNESCO, they surpass the number of men in universities and makeup 57 percent of total STEM students.

“It is about diversity and inclusion. It is not women versus men; it is about balance, which consequently contributes to better-informed decision-making,” says Amira Salah, chief marketing officer at Womena, an accelerator, and investor targeting women-founded startups. 

“This is an untapped market with so much potential, yet it is very underserved despite being such a huge contributor to economic growth. The face of innovation and entrepreneurs globally is still male-dominated, while women have to work doubly hard to get that exposure,” she added. 

Research by the Boston Consulting Group states that the world economy could potentially increase from $2.5 trillion to $5 trillion. This is true if both men and women are given the same platform for entrepreneurship. The world would benefit significantly from greater gender diversity in the entrepreneurial sector.

If you are a female entrepreneur seeking a business expansion opportunity or company formation in the UAE, it is advisable to contact expert business setup consultants who know the game inside out and can help you have a smooth business setup.

We believe that women can make better contributions to the work environment and the economy as a whole. Thus, we support them to come forward and showcase their talents. Expert consultants can help you understand the legalities of setting up a new business in the UAE. Let us know how we can help.