Middle East Female Founders Face Funding Gap
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The Funding Gap: Why Female Founders in MENA Remain Underrepresented
The startup ecosystem in the Middle East and North Africa (MENA) region has been gaining momentum. This is evident from the emergence of unicorns and innovative businesses in recent years. However, despite this progress, female founders continue to face significant barriers when it comes to accessing capital.
According to data from Wamda, female-founded startups secured only $2.5 million or 0.14% of total VC funding in the first half of 2026. This disparity is not new; rather, it’s a persistent issue that highlights the need for systemic change. Women are increasingly taking on leadership roles and starting businesses, but their share of the funding pie has not kept pace.
Mixed-gender founding teams and female-founded startups accounted for less than 4% of total equity transactions deployed across the GCC between 2019 and 2025, according to Wamda. One key factor contributing to this issue is the lack of diversity at the investor level. Gulf investor networks are still heavily male-dominated, particularly at decision-making levels.
This creates a self-reinforcing cycle where deal flow follows networks, and women founders struggle to access capital. Lucy Chow, a limited partner at Pact VC, notes that Gulf investor networks are predominantly male-dominated, making it challenging for female founders to secure funding.
The impact of this funding imbalance is far-reaching. Female startups often rely on alternative personal income streams or bootstrapping to plug the gap rather than seeking traditional VC funding. According to Chow, this limits their ability to scale and perpetuates a cycle of underfunding and underrepresentation.
However, there are glimmers of hope. Data from Founders Forum Group suggests that VC firms with at least one female partner are more likely to invest in female founders. Female angel investors also allocate significantly higher proportions of their investments to women-led businesses.
The solution will not come solely from individual investors or entrepreneurs but requires a broader cultural shift and systemic changes that prioritize diversity and inclusion. As Chow emphasizes, “we absolutely have to treat this as a capital allocation problem, not just a founder problem.” This means building a pipeline of female investors, increasing government measures that encourage capital flow, and actively working to dismantle the biases that perpetuate underrepresentation.
The lack of major exits in regional female startups has created a catch-22: investors need success stories to unlock capital, but capital is needed to create those success stories. Governments and investors must take concrete steps towards addressing this issue.
One potential solution lies in initiatives like Sophie Smith’s Nabta Health, which set up a special purpose vehicle to accept smaller investment tickets from angel investors. This allows female founders to access capital that might otherwise be out of reach. Smith’s initiative to create a list of female angel investors across the region is also a testament to the power of collective action.
This issue speaks to broader patterns of underrepresentation and bias that exist in many industries and contexts. By tackling these systemic issues head-on, we can create a more inclusive and equitable ecosystem for all founders – regardless of gender.
The funding gap for female founders in MENA is a symptom of deeper structural problems that require urgent attention. It’s time to break the cycle of underfunding and underrepresentation, and to build a future where women-led businesses have equal access to capital and opportunities for growth.
Reader Views
- TTThe Trail Desk · editorial
The statistics are stark: in the MENA region, female founders receive a measly 0.14% of total VC funding. But what's striking is not just the number itself, but where this funding gap originates. Rather than a lack of entrepreneurial spirit among women, it's the echo chamber effect within investor networks that perpetuates this imbalance. As these networks are predominantly male-dominated, they inadvertently reinforce the notion that women aren't viable investment opportunities. To truly level the playing field, we need more diverse deal-making teams and investors willing to break the cycle of underrepresentation.
- JHJess H. · thru-hiker
The numbers are stark: women in MENA securing less than 1% of VC funding. But let's not just focus on the what - we should be looking at why. In a region where family ties and tribal networks hold significant sway, who do you think investors trust? Male founders with established connections or women starting from scratch? The article highlights the need for systemic change, but until we tackle the cultural norms that favor male-dominated networks, female founders will remain stuck in a cycle of underfunding.
- MTMarko T. · expedition guide
One potential solution that's often overlooked is empowering women to lead their own deals rather than relying on male-dominated investor networks. By building relationships with key stakeholders and taking control of fundraising efforts, female founders can break down the barrier of trust and establish credibility in the eyes of investors. This approach requires a willingness to take calculated risks and challenge traditional norms – but it's essential for bridging the funding gap and creating sustainable growth for women-led startups in MENA.