Women + Web3: The Importance of Gender Diversity in FinTech

Mar 14, 2022

By Sarah Perkins, Marketing Associate, Techstars Boulder Accelerator

Applications for the upcoming Techstars Boulder program are open until April 6. Apply here.

This morning, I went to my first real in-person networking event in about two and a half years. It was for International Women’s Day and the energy was palpable. Not only did I feel some nerves being in a room with many others as we loosen mask restrictions for COVID, but I also felt inspired connecting with other women in startups on such a special day, to grab a seat at my favorite coffee shop and write about the state of founder diversity—specifically, in the FinTech space.

In Elle’s last blog post, she wrote about how Techstars Boulder has shifted its investment thesis to focus on all things FinTech for the July 2022 program—from DeFi and Web3, to crypto, to Death Tech, payments and more. More importantly, the team wants to bring financial inclusion offerings of the unbanked and underbanked to the forefront.

We believe in financial inclusion and freedom for all. The path to financial access, whether it’s paying for education, buying a home, investing in what you believe in, or building your credit, shouldn’t be predicated on where you’re born, what kind of background you have, or what you look like. This financial gap continues to be incredibly pronounced between male and female founders.

I think we all know the numbers for investing in female founders are still very bleak, no matter the sector. According to research from global FinTech think tank findexable released in 2021, only 1.5 percent of private, best-funded FinTech firms globally are founded by women; Deloitte reports the number of all-female FinTech founding teams is closer to 3.1 percent. However, sources agree that female FinTech founders receive just one percent of total FinTech venture funding.

FinTech continues to be the leading sector for venture funding in 2022, with $134 billion invested in the space in 2021. But again, 99 percent of that funding went to male founders—what would happen if that needle moved closer to the equitable mark of 50 percent?

Despite raising far less, female-founded teams continue to outpace and produce higher return rates than their male counterparts. Boston Consulting Group (BCG) reports that for every one dollar invested in a female-founded business, the return is more than double that of male-founded businesses, with returns of 78 cents to the dollar compared to 31 cents to the dollar.

Using those return numbers, if the $1.34 billion or so invested in female FinTech companies last year was transformed into $67 billion (an equitable half of all 2021 FinTech funding), projected returns for the entirety of the FinTech space would increase from about $42.2 billion to about $73 billion. If you could increase your investment returns by 170 percent, why wouldn’t you make the better decision to dedicate half of your investment dollars to female founders?

How do we make this happen? By continuing to shout these facts from the mountaintops while placing more women in decision-making positions within venture funding, businesses of any size, government administrations … the list goes on to include, well, everywhere. The more gender diverse representation there is at the top, the more equality will trickle down in the form of equitable dollars invested.

For our upcoming Techstars Boulder July 2022 program, we’re proud to be a small-but-mighty, female-led team making its mark on the space with our mission of financial inclusion. But to really make the steps needed towards equity in funding female founders in any sector, we need to pick up the pace in the right direction, by promoting women and equity allies to the forefront with a specific eye on investing for diversity and smart returns. I could close this out with a number of cliché sayings that reference boats and tides, but let’s keep it simple: Be smart. Invest in women.

Know a female-led FinTech company who might be a great fit for Techstars Boulder? Refer them to us here or share our office hours link.

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