Africa’s startup funding has rebounded, but capital still misses one of the continent’s most consistently undervalued opportunities: female-focused ventures.
A Gap That Has Grown Wider, Not Narrower
Africa’s startup ecosystem staged a remarkable funding rebound in 2025. Over $3.2 billion flowed into technology ventures across the continent, a significant recovery after years of global venture contraction. Yet beneath the headline recovery sits a widening capital allocation gap – the closer you look at who is actually receiving that capital, the starker the picture becomes for women founders. For Five35, this is not just a market distortion to observe. It is the inefficiency we are built to capture.
According to Africa: The Big Deal’s 2025 data, all-female founding teams captured less than 1% of total venture funding, the lowest share recorded since tracking began in 2021. Female-led startups (those with a woman CEO) received just 2.2% of the total. Meanwhile, male-only teams took home 91% of all capital deployed, up from 81% just four years ago.
This is not a pipeline problem. Women are founding companies, joining accelerators, pitching investors, and winning grants. The issue is what happens when capital concentrates – at scale, women are being left behind.
This Is Not Just About Fairness. It’s About Performance.
The case for closing the gender funding gap is often framed in equity terms. Such framing, while correct, consistently undersells the argument. The more powerful case is economic. The structural bias against women founders is not rational portfolio construction. It is an allocation error, one that leaves returns on the table while compounding inequality.
Research consistently points in one direction:
- Female-focused startups can deliver up to 35% higher ROI when given equitable access to capital, networks, and partnerships – the core of Five35’s investment thesis.
- Women-led ventures demonstrate stronger capital efficiency with lower burn rates, earlier paths to breakeven, and more disciplined unit economics than comparable male-led peers.
- Africa loses an estimated $95 billion annually in economic potential due to gender inequality, with effects that span across sectors, markets, and communities.
There is also a deeper structural concern: the ecosystem is inadvertently training female founders to seek grants rather than equity. When 61% of funding for women-only teams comes through grants compared to 31% for men, the compounding effect is clear — women are scaled more slowly, build smaller balance sheets, and arrive at Series A with thinner leverage. The gap is not just about capital access in the moment; it is about the trajectory of companies over time.
What Five35 Ventures Is Doing to Close the Gap
Five35 Ventures is built on a simple and powerful conviction, that backing female-focused, tech-enabled African startups early – with the right capital, governance support, and ecosystem access can unlock both stronger returns and broader economic impact. Our approach is grounded in the view that gender is not a thematic lens in isolation, but a way of identifying where value is consistently underpriced in the market. This is where we focus our capital.
Our investment approach is intentionally broad in how we define “female-focused.” This includes ventures that are female co-owned, female co-led, built for a female customer base, or creating meaningful opportunities for women in the workforce. Our mission is to catalyse up to 5% additional GDP growth for Africa by building a sustained trend of investment in female-focused enterprises. The name says it all: Five for 5%, and 35 for the 35% higher ROI female-focused startups can deliver when given equitable access to capital.
Why Solving This Matters and What Needs to Be Changed
Closing the gender funding gap is not just about representation in cap tables. It matters because the businesses being overlooked are often building in sectors that shape daily life and long-term productivity. When these ventures are properly funded, the impact extends beyond company growth, jobs are created, access improves, local supply chains strengthen and more inclusive products reach more people.
If we want better outcomes, capital allocation has to shift in practice, not just in principle:
- More intentional capital must flow to female-focused ventures, not just more discussion about them.
- Investors need to broaden how they define investable opportunity.
- Fund managers must deploy capital with stronger local context, long-term conviction, and discipline.
The good news is that the case for action is stronger than ever. Women are already in the market, already building, and already solving real problems. The question is whether capital will keep lagging behind reality or finally start moving in step with it. At Five35, we see this clearly: this is not a gap to acknowledge. It is a market inefficiency to be addressed and one of the most compelling investment opportunities on the continent today.
