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Fintechs in America: Women get less capital

“Women and technology” is one of the most common sexist sayings, even if women occasionally use them self-deprecatingly. But apparently the prejudice that technology is a male domain is ineradicable.

This conclusion is at least suggested by a survey by the data service Crunchbase: According to this, women in the United States set up significantly fewer technology companies than men, with just under 4 percent of the fintechs there. But they also received only 0.9 percent of the funding the industry was able to collect as a whole.

The fintech industry even received a record amount of 16.9 billion dollars this year. This means that women entrepreneurs have fewer opportunities to develop products and acquire customers. Fintechs founded by women continue to face prejudices that are difficult to overcome, said Alaina Sparks, managing director of consulting firm Deloitte, told Bloomberg news agency. On the other hand, companies founded by men could grow.

Even mixed teams founded only 11 percent of the companies. At just under 7 percent, however, only a disproportionately low amount of funds flowed into them. This proportion has been falling since 2018. Katie Palencsar, head of the Female Innovators Lab at Bloomberg, said that the proportion of companies with all-male founders is large and that more money is flowing into them as the financing rounds grow. In the wake of the pandemic, many venture capitalists put additional money into their companies. Since the majority of these companies were founded by men, there is a kind of vicious circle.

In general, female founders receive less equity capital, but the gap is particularly large with fintechs. Even with start-up financing, so-called seed investments, these would typically have received fewer funds in the past five years, according to the analysis by Crunchbase.

Tanya Van Court, founder of Goalsetter, an app that helps children manage expenses and educate themselves financially, told Bloomberg that she had been repeatedly turned down looking for initial funding. Their idea was not suitable, they said, but a few months later the same investors had financed financial apps for children. Men seemed to give money for promises, women for evidence. In the end, Goalsetter was funded by a network of female angel investors. Nevertheless, a competitor received more money to start up than Goalsetter in the four years of operation.

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