New research by global fintech think tank findexable shows that 1.5% (16) of 1,032 best funded private fintech firms globally are founded solely by women and receive just 1% of total fintech venture funding. The Fintech Diversity Radar research reveals women make up 11% of all board members and 19% of company executives. The majority of women (26%) in the sector are Chief People Officer or Head of HR, followed by Chief Marketing Officer and Chief Financial Officer. Of all fintech CEOs globally, 5.6% are women – less than 4% of women globally hold the title of Chief Innovation or Technology Officer.
The inaugural Diversity for Growth Report forms part of the Fintech Diversity Radar, the first global big data initiative tracking diversity in fintech by findexable in partnership with fintech firms Chargebacks911 and Global Processing Services (GPS) and a global alliance of supporting organisations, women founders and fintech industry champions.
The report examines the role that women play – or, rather, don’t play – in global fintech, and how the industry can build more balanced, inclusive and representative businesses that are fit for the future. The research comprises data from just over one thousand of the world’s best funded privately owned fintech firms, 36 in-depth interviews with founders and senior executives from large financial service providers. Insights are also drawn from a survey of 250 employees working across the financial services landscape.
Simon Hardie, CEO and co-founder of findexable says, “Global prosperity is more evenly distributed than at any point in history, yet our data shows the massive imbalance between men and women in innovative financial services firms. Fintech is a key enabler in the digital economy and the sector plays an outsize role in reducing economic exclusion and powering digital transformation.
The data released today bears witness to the birth of a new ‘1% club’ in the amount of funding raised by sole women-founded firms. A number that should be celebrated and commisserated in equal measure. The data also reveals how globalisation of technology and financial services is playing out: fast growing markets score better by proportion and numbers of women founders and women in key positions – numbers that are a mirror image of the distribution of global venture funding.”
West is (not) best: regional dynamics
Hubs for women founders, executives and board members are globally distributed:
- Asia has the highest proportion of female founders at 7.7%, followed closely by Africa at 7.4% – this compares to North America at 4.8% and Europe at 6.5%.
- Africa has the highest proportion of female board members at nearly 15%
- Africa and the Middle East are the leading regions for the proportion of female CEOs
- North America has the highest proportion of executive team members
- Female CEOs are more likely to call Dubai, London, São Paulo, Buenos Aires or Lagos home.
- Only eight female founded companies have more than 1,000 employees, with five in Asia, two in Europe and one in Latin America.
While across the data good news is hard to come by there are some bright spots:
- Companies with at least one female founder increased from 6% in 2010 to 30% in 2020. Companies founded by men got the lion’s share of funding over the years and that’s true in every region, however, women punch above their weight when it comes to funding:
- In Latin America, APAC, and Africa, the companies that secured the highest median funding were those with only women founders.
- In North America, companies with one or more female founders got the highest median funding.
- The pattern changes slightly with average funding: in both Latin and North America, the biggest average goes to companies with at least one woman founder; in the Middle East and Africa, male only founders get the biggest average; and in Europe and APAC, women only founders get the biggest average.
Denise Gee, co-founder of findexable says, “While the research paints a disappointing picture of fintech’s performance at building an industry that reflects the real world, this research should be viewed as a line in the sand. From today all of us – from government to regulators, ecosystems and financial services firms of all sizes – need to ‘dig in’ (not lean in) to make the case and accelerate the progress of women and diverse teams.
“Building a future fit finance industry starts here. Today’s report outlines recommendations to make that happen. From here we’ll be convening the London Roundtable of global stakeholders in December to take the report’s recommendations forward and build a global index to track and accelerate progress. Change has to come from within and we’re asking for support from across the ecosystem for the initiative – including completing our global survey that will be used to build the index – to meet the 30:30 challenge: 30% of fintechs to be founded or led by women.”
Monica Eaton-Cardone, Founder and COO of Chargebacks 911 says, “This report is a welcome addition to the growing body of evidence that things need to change in the technology industry. Although progress is being made, statistics citing that only 1.5% of Fintech companies are founded solely by women highlights deep, systemic problems. However, there are signs of hope in the progress being made in the Middle East and Africa, where significantly more women are present in boardrooms. In this report, findexable have given the industry another wake-up call, and now it’s down to all of us to listen.”