H&M Foundation has highlighted the need to address the financial gender gap, adding women lack adequate access to finance and investment.
The non-profit global foundation, headquartered in Stockholm, Sweden, notes that while women make up half the world’s population, female-founded startups only get 3% of global venture dollar volume. The finance gap between men and women is estimated at US$1.7trn it says, citing World Bank data.
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“By not giving women entrepreneurs equal access to finance, investors keep missing out on what could become the new Apple Inc or Amazon.com – every year. Women entrepreneurs achieve higher rates of return, and if allowed to grow, enterprises led by women perform better in the stock market,” says the Foundation.
It has unveiled “Unfounded” — which it says is a metaphor “for the immense and largely untapped business potential women and female-led businesses represent for the global economy.” It has pitched the “startup” opportunity to investors which it adds has the potential to unlock US$330bn in annual global revenue.
“The financial characteristics of women have been translated into a could-be company – Unfounded Ltd – that is now being pitched to the top-100 global venture capital firms and investors. There is just one detail missing in the investment opportunity letter. Women. Based on data alone, this should be an investment opportunity that no investor can afford to overlook.”
Financial inclusion has been identified by the United Nations as a key enabler in reaching many of the Sustainable Development Goals by 2030; reducing poverty, improving education and fighting inequality, but also to create innovation, jobs and economic growth.
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By GlobalDataStill, whether in Silicon Valley or in Sri Lanka, the lack of adequate access to finance is felt by women everywhere. A recent report by the UN Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) shows that in developing countries, 80% of women-owned businesses with credit needs are either unserved or under-served. And in the US, only 2.8% of venture capital went to companies founded by women in 2019, according to PitchBook, a SaaS company that delivers data, research and technology covering the private capital markets, including venture capital, private equity and M&A transactions.
“With less than ten years left to reach the Sustainable Development Goals by 2030, it’s time to step up the focus on gender equality and specifically financial inclusion as a driver for positive change for women as well as for entire economies. By using the language of investors, we want to reach the individuals who make judgment calls and write the checks. Unfounded Ltd is a tool to break the barriers that women entrepreneurs face in access to finance,” says Diana Amini, global manager, H&M Foundation.
