Female FinTech entrepreneurs are getting left out of funding even as record venture capital money is being pumped into startups.
Just 3.8 percent of FinTech startups with female founders received funding January through October, according to Crunchbase, per a Bloomberg report on Wednesday (Nov. 25). Companies that did get funding received only 0.9 percent of total monies raised.
FinTech startups broke funding records, raising $16.9 billion in the first three quarters of 2020, which is 20 percent more than the same period in 2019. Female-founded companies are also losing out on product development and customers even though male-founded firms are expanding.
“We’re operating at this intersection of finance and technology, which are both industries that are woefully underrepresented by women in the first place,” Alaina Sparks, a managing director and the U.S. FinTech practice leader at Deloitte, told Bloomberg. She said that women are confronted with bias that is challenging to vanquish.
Female founders raise less money than men across all VC-backed companies, but the divide is much greater in FinTech. Deals were smaller for female-founded FinTechs at seed, series A and series B stages, according to Crunchbase, per Bloomberg.
Katie Palencsar, head of Female Innovators Lab, told Bloomberg that male founders are in the majority, “so we continue to see more dollars going there as those rounds expand.” Female Innovators Lab is a New York program run by the Anthemis Group and Barclays that champions female FinTech founders.
The popularity of FinTechs started waning a bit in favor of legacy banks as the pandemic took hold and online outages increased. Robinhood, for example, had several outages in March and June.
The Dow Jones Industrial Average surpassed 30,000 points for the first time in history on Tuesday (Nov. 24). Tech stocks tied to payments companies have especially soared. Square rose 230 percent year to date; PayPal, 85 percent; Mastercard and Visa,11 percent.
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