Women investors in early-stage tech are underrepresented in Latin America as they are globally.  In the US, women decision makers represent about 12% of Venture Capitalists (VCs), and the majority of firms have no women partners; in many other markets, reliable benchmarks for comparison are harder to come by. The lack of diverse representation among decision-makers has ramifications for entrepreneurs, as well; startups with global women co-founders captured only about 12% of VC funding in 2019, and that appears to have declined during the Covid-19 pandemic.

https://medium.com/allraise/more-women-became-vc-partners-than-ever-before-in-2019-39cc6cb86955

In Latin America, it was about the same, with 13% of disclosed VC funding going to women-led startups in 2019, according to LAVCA Data. LAVCA is the Association for Private Capital Investment in Latin America, a not-for-profit membership organization dedicated to supporting the growth of private capital in Latin America and the Caribbean through research, education, networking and advocacy.

If Latin America hopes to recover from the pandemic – and build stronger, more inclusive economies in the future – one key area of focus should be unleashing the power of increased women’s labor participation and its potential effects on Gross Domestic Product (GDP).

Lack of Women Representation in LATAM Workforce More Dramatic

Women make up half of the global population, but are responsible for 37% of global GDP, according to Mckinsey. The gap is even more dramatic in Latin America, where, in addition to having a smaller overall presence in the workforce compared to men, women also face limited opportunities to start new businesses and generate growth.  

Mckinsey calculates that Latin America could increase GDP by 14% over the next five years simply by better incorporating women to the workforce. It’s easy to imagine what an extra $2 trillion (as the US is doing) would mean for the LATAM region’s reconstruction efforts. But to make it happen, governments need to design innovative financial mechanisms to facilitate credit for more women; increase opportunities for women to join the labor force by instituting better support systems for family care; and demand that private sector actors commit to equal pay. These and other measures would create jobs and reduce poverty and help address the underlying social and economic ills facing the region.

Women Empowerment Principles

Some of these measures are already underway. Over 800 Latin American and Caribbean businesses have signed the Women Empowerment Principles (WEPS), which will help guide the private sector in better promoting gender equality and empowerment. Major financial institutions in the region have also begun to focus on so-called Gender Impact Investment by designing financial products geared specifically to women. And recent studies suggest that companies that have incorporated larger percentages of women on their boards and management teams perform better than those that have not.

Challenges remain. Though many women in the region are educated, the fact that most women have limited credit history are additional barriers. Many studies also point out that women generally have smaller wages than their male counterparts for doing the same job.

There are, however, some good news. The number of tech companies with women in executive positions is increasing rapidly. The reason for this is because of advances in technology that allow employers to provide high-level applicants with information about their companies and position openings at the same time. Companies are able to do this because they can send information via email, instant message, VOIP (Voice Over Internet Protocol) and various forms of online applications that are accessible to any Internet-connected person, anywhere.

https://about.crunchbase.com/female-founder-report-2020/

More than half of the women surveyed said that they felt that their bosses behaved negatively toward them because of their gender.

Investors in Latin American Tech which includes 116 junior-level female investment professionals at VC firms investing in Latin American startups, a 22% growth over the 2020 list of 95 women.

Seven firms added two or more mid- and junior-level investors to their teams, including KASZEK, ALLVP, SoftBank, IGNIA Partners, ALIVE Ventures, Clocktower Technology Ventures and Honey Island Capital.

Six women from last year’s Emerging Women Investors list were promoted to Partner roles and are featured in our companion list of Top Women Investing in Latin American Tech.

These numbers represent an advance in women inclusion, but it is minimal compared to the vast world of startups and hightech companies.

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