IDB Lab's study provides a comprehensive overview of female entrepreneurship in STEM to help close the gender gap.
Women-led companies in STEM (science, technology, engineering, and mathematics) are raising more capital, but not enough of it, even though venture capital funds see the advantages and market opportunities of investing in these women-led companies.
This was revealed by wX Insights, a study published by IDB Lab, the Inter-American Development Bank's innovation lab, together with Endeavor Mexico, Value for Women and We-Fi (the Women Entrepreneurs Finance Initiative). The report offers a comprehensive view on the state of entrepreneurship in Latin America and the Caribbean for women in STEM.
The study took data from nearly 1,700 women-led STEM companies and 600-plus equity funds that have invested in firms with a woman at the helm in Latin America. It has also conducted interviews with 375 women entrepreneurs and managers and with 35 venture capital investors, offering a comprehensive view of female technology entrepreneurship in the region.
Thirty-eight percent of respondents continued to cite lack of financing as the main obstacle to business growth and indicated that their main challenges include contacting investors, navigating the complexities of negotiation, and dealing with biases in investment decision making.
"The growth of women STEMpreneurs is critical to the future of innovation in Latin America and the Caribbean,” IDB Lab's Investment Unit Chief Magdalena Coronel said. “By closing the funding gap and supporting these entrepreneurs, we are not only driving technological progress, but also fostering a more inclusive and equitable economy."
The study shows that only half of STEMpreneurs have a STEM background, that one third have been involved in more than one entrepreneurial venture, and that the sectors they focus on are mainly education technology, SaaS (software as a service) and health technologies. It also highlights that women who have been more successful in raising capital tend to participate in business support and team-entrepreneurship programs.
On the investor side, wX Insights 2024 shows that 60% of investors have observed an increase in women founders in STEM in recent years and 92% reported using specific outreach and headhunting strategies to reach more female entrepreneurs.
In addition to providing detailed data on investors and women in STEM ventures, the study seeks to offer key insights into the challenges facing women STEMpreneurs and the opportunities to invest in them. It also offers practical recommendations to reduce the funding and gender gap. To access the full report, click here.
About IDB Lab
IDB Lab is the innovation and venture capital arm of the Inter-American Development Bank Group. We discover new ways to drive social inclusion, environmental action and productivity in Latin America and the Caribbean. IDB Lab leverages financing, knowledge, and connections to support early-stage entrepreneurship, foster new technologies, activate innovative markets and catalyze existing sectors. www.idblab.org.
Manzano Guillen,Maria De Gador
Study
wX Insights 2024 - The Rise of Women STEMpreneurs in Latin America and the Caribbean: Reducing the Gap in Access to Capital