More women in the United States are starting new businesses than ever before, with the first three quarters of 2021 alone seeing $40 billion raised by female-owned startups. While this is still a mere fraction of the $239 billion in venture capital invested over the same time period, it is double the amount raised by women-owned startups in all of 2020 and 2019, signifying women’s rapidly growing presence in the traditionally male-dominated business world.
Players in the banking and payments industries need to pay close attention to these developments in the growth of female entrepreneurship and understand the businesses these women are starting and the technology they are leveraging to make their ventures successful. Failure to do so could mean missing out not only on opportunities to empower women in the business world, but also on significant revenue streams as these women entrepreneurs seek the latest technologies to power their businesses.
The Female Entrepreneurs And Technology Playbook, a PYMNTS and Payoneer collaboration, explores how female entrepreneurs are disrupting the business world with cutting-edge technology across a wide range of fields. This report features interviews with female entrepreneurs whose success provides a firsthand look at the challenges they and their peers face and they methods they used to overcome them.
This is what we learned.
Successful businesses owned or led by women have become a powerful driving force in the modern economy and are projected to continue their prodigious growth well into the future.
A recent study from the World Bank found that in the U.S. alone, female-owned businesses have grown at more than double the rate of all other businesses, contributing $3 trillion to the economy and employing approximately 23 million individuals. Developing countries are seeing similar growth rates proportionate to their economies, with between 8 million and 10 million small- to medium-sized businesses (SMBs) having at least one female owner.
Female-owned SMBs are twice as likely to have their loan applications rejected than SMBs owned by men.
Breaking down this barrier will require active effort from investors to seek out female-owned businesses and place a priority on their success. Female entrepreneurs could also benefit vastly from FinTechs promoting financial inclusion for women, especially in developing countries. This includes investing directly in female-owned businesses, and these funds will punch far above their weight when it comes to promoting equality for women in the workplace.
The ability to take advantage of the right technologies or platforms often proves to be the primary driver for success in the modern digital economy.
Digital payments is one of those technologies, and it can put female-run businesses on equal footing in key ways. Transactions from customers, vendors and suppliers are all simpler, faster and cheaper when conducted digitally rather than by cash or check. Female entrepreneurs could also benefit from simpler cross-border transactions
Women face institutional disadvantages all over the world in many facets of their lives, and the business world is no exception. Technology companies, payment providers, investors and a host of other businesses not only have a moral obligation to invest in female-owned businesses, but a financial one as well: Closing the gender gap in the business world could reap untold billions in dividends for the investors, the entrepreneurs and the world around them.
To learn more about how technologies can improve the success rates of female entrepreneurs, download the playbook.
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