How to champion diversity in Indian private capital (and why you should)

In the end of October, SuperReturn Middle East opens it's doors in Dubai, bringing together 400+ senior attendees, including 125+ LPs and 200+ GPs from MENA & beyond. Ahead of her panel at the event, we spoke to Anisha Singh, Founder, She Capital about championing investment in female-led startups in India, why the industry needs to champion diversity and much more.

You founded She Capital, India’s most active diversity focused venture capital fund investing in women-led/co-led and women-focused startups. Can you tell us a bit about the importance of investing in women-led businesses and specifically what this landscape looks like in India? 

The startup ecosystem has seen exponential growth and going by the number of startups and unicorns, India has the third largest startup ecosystem. There are over 99000+ startups recognized by Government of India as of May 2023 and India is home to 108 unicorns with a total valuation of $ 340.80 bn as of March 2023. Of the total, 44 unicorns were born in 2021 and 21 unicorns in 2022. There's a distinct growth in women-led startups as well with over 20 unicorns with female founders.

Women-led startups are playing a significant role in the society by creating jobs, influencing demographic changes, and motivating the subsequent generation of female founders. Studies show that women-owned companies help create a more sustainable future as women tend to invest back in the society. According to a Bain & Co. report, women entrepreneurs directly employ between 22 and 27 million people and 150–170 million additional employment could be created by Indian women entrepreneurs by 2030. Approximately 19% of all women-owned businesses employ a sizable workforce. The study also showed that female business owners are more adaptable and resilient and have a higher emotional quotient. 50% of the population is female and with the growing consumption, a whole range of products need to be designed for females and hence a ready market to be tapped in the startup space.

The Indian economy is certainly experiencing a wind of change and it is my firm belief that in the next few years, Female Entrepreneurs will claim their fair share of the ecosystem.

How are local and international companies increasing female participation in the workforce in the region in order to become more diverse and inclusive? 

There is a rising trend in the share of women who are economically active. Passing of Women Reservation Bill for Gender Equality and the mandate to have at least one female director in the board are testimony to the fact that women have cemented their positions in traditionally male-dominated domains including entrepreneurship. I strongly believe that the startup ecosystem is where we’ll be able to close the gap between the two genders.

In order to build an inclusive culture, diverse and equitable workplace, companies are creating unbiassed and inclusive job descriptions, utilizing gender-diverse candidate pipelines, assembling diverse interview committees and conducting fair and unbiassed interviews. There is a need to recognize and overcome the unconscious biases which is inherent in all of us, we all must learn to overcome it.

What can organizations do to attract a diverse talent pool and foster an inclusive startup ecosystem? 

A more diverse workforce brings new perspectives and ideas to the table, which can foster greater creativity and innovation. Employees are also more likely to be engaged and productive when they feel like they belong to an inclusive workplace. One can boost the likelihood of drawing in a more diverse candidate pool by establishing equitable and inclusive recruiting practices and by proactively addressing any potential hurdles or biases in employer brand and communication.

What are some of the challenges you’re seeing, both in India, but also worldwide, to create a more gender balanced economy? 

Women's employment can be a central driver of inclusive growth. Gender equality goes hand-in-hand with macroeconomic and financial stability, promoting economic growth and reduce income disparity. If gender employment inequalities are eliminated, the long-term GDP per capita would increase by around 20% on an average across all nations. Some of the challenges faced in creating a more gender balanced economy are workplace culture, lack of flexible work arrangements, gender biases, societal expectations regarding gender roles.

According to a Harvard study, women entrepreneurs have been subjected to different line of questioning even while pitching to various VCs and as per the study 67% of the questions directed to male entrepreneurs were promotion-oriented, while 66% of those posed to female entrepreneurs were prevention-oriented. Also, there is a confidence gap and women tend to under-sell their businesses.

What are the solutions to some of these challenges and/or obstacles that might stand in the way of women-led companies receiving funding?

Women have always been entrepreneurial when given an opportunity. Women entrepreneurs have seen tremendous growth in recent years, emerging as a powerful force in the global economy and gender-diverse teams are likely to financially outperform their counterparts, which is a compelling incentive for investors as investment is all about potential worth in the future. There is a need to address the inherent bias in the VC world and unfair assessment criteria. Huge opportunities exist in the startup space for women leaders who aim to start their own businesses and moving money into more diverse hands will have a positive impact on the overall business ecosystem.