Only 4.7% of Brazilian startups were founded exclusively by women, almost 20 times less than those with only male founders, according to the Female Founders Report 2021, a study published by innovation hub Distrito in partnership with Endeavor and B2Mamy, an accelerator focused on mothers.
When it comes to black female entrepreneurs, the situation is even worse. While 56% of Brazilians are black, according to official government data, only 19.1% of Brazilian startups founders belong to that demographic.
“The world doesn’t want to see a black woman winning”, says Janine Rodrigues, founder of Piraporiando, an edtech focused on anti-racist books and educational material, in an interview with Startups. “Most of the places I’ve reached are spaces that didn’t take me into account.”
The entrepreneur highlights numerous events and projects in which she was left out, and the rancor stamped on the faces of some people when they saw her achieve any level of success – whether selling her books to schools across Brazil or creating anti-racist education content to support Diversity.
“The perverse and toxic idea of ’it’s all up to you’ is a racist lie. It depends on you, [but] it also depends on the emotional structure you have, the means and opportunities that you will or will not have access to and the size of the privileges that those on your side will have”, Rodrigues points out.
The creation of opportunities for black female founders in Brazil is still small and quite recent. Black Founders Fund, a Google for Startups project that invests in businesses founded or led by black entrepreneurs in Brazil, was launched in Brazil only two years ago. The fund debuted with 5 million Brazilian reais to invest in businesses founded or led by black people. Recently, the tech giant announced a 8.5 million Brazilian reais boost for the project. Of the 33 startups invested in by the Black Founders Fund, 48% are founded or co-founded by women.
Pretahub, a hub for black creativity, inventiveness and trends in Brazil, dates back to 2018. The hub is the result of 18 years of activities by the Feira Preta Institute in mapping, technical and creative training, accelerator and incubator of black entrepreneurship in Brazil. Last year, Distrito, in partnership with Brazilian retailer Via and Unilever, launched Black Scale, an acceleration program for startups founded by black people.
It is not a coincidence that, as more doors began to open, more companies led by black female founders were created. The majority (29.8%) of startups with leaders of that racial background emerged in 2020 and 17.4% in 2021, against only 14 .9% in 2018 and 13.2% in the following year. The numbers are from BlackOut, a study carried out in 2021 by the innovation hub BlackRocks Startups, in partnership with the Brazilian Startups Association (ABStartups).
BlackRocks Startups itself was created in 2016. Led by Maitê Lourenço, the hub promotes access to the black population in highly innovative and technological environments, connecting entrepreneurs to capital and opportunities in the startup ecosystem. Since its foundation, the São Paulo accelerator has impacted more than 5,000 people daily.
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Unequal investments
Without taking the ethnic and racial background into account, data on the Brazilian startups ecosystem from the Female Founders Report suggests that for 60% of female entrepreneurs, the main challenge faced is scaling the business, followed by the validation of the business model (56.4%), the lack of good connections with investors, mentors and other entrepreneurs (44.6%) and the difficulty in attracting investments (38.8%).
Analyzing the current investment scenario in relation to female entrepreneurship, the study found that, despite accounting for 4.7% of the ecosystem, startups founded only by women received only 0.04% of the more than US$ 3.5 billion invested in Brazilian startups in 2020.
“Getting access to investment is a big challenge”, says Mia Lopes, founder of sportstech AfroEsporte. Founded in 2019 in São Paulo, the startup has not yet managed to raise seed capital. The first invitation to a pitch came this year, at the Like a Woman Challenge, aimed exclusively at female founders, promoted by the Arena Hub sports innovation and entrepreneurship center.
The startup was one of eight ventures that participated in the mentoring and meet-ups stage, but was not selected for acceleration. “The fact the program had a gender focus has opened a door for us. Without such opportunities, our company will continue to compete for space with startups that are already born with smart money. It is an unfair competition”, Lopes points out.
According to the research, this investment gap is due to several factors, including gender inequality in the venture capital industry and the unequal allocation of capital between male and female-led companies. Some 72.4% of the female founders who went through the fundraising process said they had suffered moral harassment, mainly related to gender and maternity issues.
The obstacles do not stop there. More than 60% of Brazilian entrepreneurs said they have been asked by investors if they “would be able” to run the business, 45.7% if they “knew basic technical terms” and 14.2% if the company “has a man in the corporate board”.
“We struggle on a daily basis. As women, we have to learn to impose ourselves and insist on what we consider essential for the future. Working with technology, everything becomes more complex, because many people despise our knowledge”, says Débora Moretti, co-founder at iBench, a company offering a platfrom of lab products and equipment.
The study points out that the most difficult moment of fundraising is the first contact with the investor – a point raised by 41.1% of the founders mapped as part of the research. Respondents also highlight pitching (36.2%) and Due Diligence, a process of investigating and analyzing information from a particular company (19.7%), as some of the toughest challenges for female entrepreneurs.
