In 2019, Flavia Deutsch and Paula Crespi, co-founders of Theia, a parenting startup in Brazil, raised a groundbreaking $1.7 million seed round. However, they faced an unexpected challenge – convincing female investors to join their team.
A Problem That’s Not Unique to Theia
Deutsch explained that for every male investor they had, they wanted one female investor as well. This approach was not just based on intuition but also backed by research.
Female-Founded Companies Outperform Their All-Male Counterparts
Studies have consistently shown that companies founded and co-founded by women outperform their all-male counterparts. According to Boston Consulting Group, for every dollar a female founder or co-founder raises, she generates 2.5X more revenue than a male founder.
Here are some statistics that support this trend:
- Boston Consulting Group: Female founders generate 2.5X more revenue than male founders.
- First Round Capital’s Research: Female-founded companies performed 63% better than all-male founding teams.
- Ewing Marion Kauffman Foundation’s Research: Return on investment from women-led teams is 35% higher than their all-male counterparts.
Why Investing in Women is a No-Brainer
The data is clear: investing in women is a smart business decision. As Jen Neundorfer, founding partner at Jane VC, explains, "investing in an overlooked asset class that is overperforming."
Emerging Markets Are Where the Future Lies
Much of the opportunity for investment lies in emerging markets. In 2017, the largest IPOs globally came from emerging markets, and this trend has continued to rise.
Nazaryasin, founder of Rise Capital, notes that "this trend isn’t going away." With most GDP growth coming from emerging markets, where most global internet users live, it’s clear that the future of market capitalization growth in the internet sector belongs to emerging markets.
Latin America Takes the Global Lead in Funding Women
New data from Gene Teare at Crunchbase shows that Latin America currently takes the global lead in investment dollars directed to women.
In 2019, investments into mixed female-male founding teams represented 16% of dollars invested in Latin America, compared to 9% in the U.S. and 8% in Europe.
Nubank: The Brazilian Challenger Bank Co-Founded by Cristina Junqueira
One notable example is Nubank, the Brazilian challenger bank co-founded by Cristina Junqueira. In 2019, Nubank raised $400 million in funding, with Junqueira serving as its CEO.
Conclusion
Investing in women is a smart business decision that’s backed by research and data. As emerging markets continue to grow, it’s clear that the future of market capitalization growth lies in these regions.
With companies like Nubank leading the way, it’s exciting to see what the future holds for female-founded startups and entrepreneurs in Latin America and beyond.
