Funding Strategies for Female Founders: Navigating the Financial Landscape in the MENA Region

The Middle East and North Africa (MENA) region is experiencing a significant rise in female entrepreneurship, with women increasingly leading businesses across various sectors. The Global Entrepreneurship Monitor (GEM) 2022/2023 report highlights this upward trend in female entrepreneurial activity. In the tech sector, platforms like Womena report that 14% of their portfolio companies are female-led. In Saudi Arabia, the percentage of tech startups led by women surged to 28% in 2021, up from 12% in 2017, surpassing the European average of 17.5%, according to an analysis of startups registered in Riyadh.

The UAE is also making substantial progress, supported by numerous initiatives that provide funding and accelerators for female entrepreneurs. Women in the UAE now own approximately 10% of the total registered businesses in the country. A recent survey of women-owned businesses (WOBs) in the UAE revealed that 77.6% are owned by women under 40, with 61.4% being sole proprietors. Most WOBs are micro-enterprises (72%), operating predominantly in service sectors across Abu Dhabi, Dubai, and Sharjah. These businesses face challenges such as market access, finance, and high competition, with a strong need for training in business skills and e-commerce. The UAE has also made strides in corporate governance, with women now representing about 3.5% of board members across companies listed on the Dubai Financial Market.

Despite these advancements, significant challenges persist. The gender gap in business ownership in MENA exceeds 40%, the largest globally, and the World Economic Forum's Global Gender Gap Report 2021 estimates it will take 143 years to close this gap at the current rate. Women receive only 7% of total bank loans in the region, reflecting ongoing financial barriers.

MENA's startup ecosystem has grown significantly, with a 39% compound annual growth rate over the past five years. However, startups with at least one female founder account for only 24% of the funded startup universe. Notably, all-female founder teams are twice as prevalent as those with both male and female co-founders. In 2023, only 23 female-founded startups secured deals, down from 101 in 2021. Since 2018, female-led startups have raised $637 million across 309 deals, with key players including iMile’s Rita Huang ($50M), FinTech Qlub’s Gizem Bodur ($42M), and Egypt’s Khazna’s Fatma El Shanawy ($38M). The FinTech sector leads in funding, followed by E-commerce/Retail. The rise of female angel investors and VCs, such as Noor Sweid of Global Ventures and the team at Nuwa Capital, is gradually reshaping the investment landscape.

Despite this growth, a significant funding gap remains between female- and male-founded startups. The UAE leads in funding and exits, highlighting regional disparities. As more female leaders enter the ecosystem, investment in female-founded startups may increase, potentially addressing economic and gender inequalities in MENA.

Integrating more women into MENA's business landscape could address many economic challenges, such as job creation and wealth generation, while tackling existing inequalities.

What strategies and resources are available to female founders in MENA to secure funding and grow their businesses?

Female founders in the MENA region have access to a variety of strategies and resources to secure funding and grow their businesses. Here are some of the most effective approaches:

1. Leverage Women-Focused Funding Networks: Tapping into networks and funding sources specifically designed for women entrepreneurs is a powerful strategy. Platforms like Womena, IFC’s Women Entrepreneurs Finance Initiative (We-Fi), and angel investor networks such as Cairo Angels and Dubai Angel Investors, offer funding, mentorship, and valuable networking opportunities. These networks provide more than just financial support—they create a community that can help female founders navigate the challenges of entrepreneurship in the region.
2. Crowdfunding: Crowdfunding has become an increasingly popular way for female founders to raise capital while building a customer base and gaining market validation. Platforms like Eureeca, Zoomaal, Dubai Next, and Yomken offer female entrepreneurs the chance to secure funding through community engagement. These platforms allow for a broader connection with potential backers, making them ideal for innovative and community-oriented ventures.
3. Explore Venture Capital and Angel Investment: While accessing VC and angel investment can be challenging for female founders, the landscape is evolving. Prominent VC firms like Wamda Capital and Arzan Venture Capital, along with regional accelerators like Flat6Labs and Oasis500, are increasingly investing in female-led startups. Initiatives like Angel Female 2022 and networks such as MENA Angel Network and SheInvest are also dedicated to supporting women-led ventures, making it essential for female founders to build relationships with diversity-focused investors.
4. Utilize Grants and Competitions: Non-dilutive funding through grants and business competitions is another valuable resource. Programs like the Cartier Women’s Initiative, TiE Dubai, EWA Accelerator and the Arab Women’s Enterprise Fund (AWEF) offer financial support, mentorship, and visibility, helping female founders grow their businesses without giving up equity.
5. Alternative Financing Options: Beyond traditional funding, female founders can explore alternative financing options such as revenue-based financing, microloans, and Islamic finance. These options provide flexibility and can be more culturally acceptable and accessible for women entrepreneurs in the region.
6. Build a Strong Regional Network: Networking is crucial in MENA, where relationships play a significant role in business success. Platforms like the Arab International Women’s Forum (AIWF) and MENA Businesswomen’s Network, along with local incubators and co-working spaces like The Burea Business Center or Astrolabs in Dubai and The Space in Cairo, provide valuable networking opportunities, mentorship, and resources tailored to startups, including those led by women.
7. Prepare for the Pitch: When seeking funding, it’s vital for female founders to craft a compelling pitch tailored to the MENA market. Understanding cultural nuances, aligning with regional values, and demonstrating deep market knowledge can significantly enhance the chances of securing investment. A strong pitch should clearly outline the problem, unique value proposition, growth potential, and be backed by solid financial projections.

Conclusion

The rise of female entrepreneurship in the MENA region marks a significant shift in the business landscape, with women increasingly leading businesses and making strides in sectors like tech, finance, and retail. While the ecosystem offers various funding opportunities—from women-focused networks and crowdfunding platforms to venture capital, grants, and alternative financing—challenges remain, particularly in closing the gender gap and securing equitable access to financial resources.

As more female leaders and investors enter the ecosystem, the potential for addressing economic and gender inequalities in MENA grows. The strategies outlined provide a roadmap for female founders to navigate the complex financial landscape, but the journey is far from straightforward.

How can the existing funding strategies be better leveraged or expanded to ensure more female-led startups in MENA receive the support they need to succeed?