Latin America Takes the Global Lead in VC Directed to Female co-founders

Summary of Study

Bottom Line: New data reveals that Latin America currently takes the global lead in investment dollars directed to women. Leveraging women entrepreneurs has been the secret ingredient in Latin America's outsized returns in recent years.

Venture capital investment in women-led firms is much higher in Latin America than in the rest of the world. In 2019, investments into mixed female-male founding teams represented 16% of dollars invested in Latin America, 9% in the U.S., and only 8% in Europe. Overall, total investment dollars in both mixed male-female teams and female-only teams represented 17% of total dollars invested in Latin America, 13% in the U.S., and 9% in Europe.

Investment in female-led teams is not only more frequent but also larger in size. In terms of deal volume, mixed female-male founded teams make up 15% of investments in 2019 in Latin America, in comparison with 14% in the U.S. and 11% in Europe.

One reason for female entrepreneurship outperformance in Latin America is fintech. In Latin America, 35% of fintech companies have a female co-founder, 5 times more than the global average of 7%.

However, in terms of funding all-female teams, the U.S. still leads. In Latin America, the women-only teams made up 4% of investment deals in 2019, on par with Europe but behind the U.S. average of 8%.

Many studies have established that female-founded companies outperform their all-male counterparts:

  • Boston Consulting Group reports that for every dollar a female founder or co-founder raises, she generates 2.5 times more revenue than a male founder.
  • First Round Capital’s research held that the female-founded companies it backed performed 63% better than all-male founding teams.
  • The Kauffman Foundation showed that return on investment from women-led teams is 35% higher than their all-male counterparts.
  • AllRaise, a nonprofit promoting women in VC, found that “companies with women on their founding teams are likely to exit at least one year faster compared to the rest of the market, and the number of exits for companies with at least one female founder is growing at a faster rate year-over-year than exits for companies with only male founders.

Read the full study HERE

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Latin America Women-Led Firms Receive More Funding Than Their Global Counterparts

TechCrunch

Findings:

  • In 2019, investments into mixed female-male founding teams represented 16% of dollars invested in Latin America, 9% in the U.S. and only 8% in Europe.

  • Overall, total investment dollars into both mixed male-female teams and female-only teams represented 17% of total dollars invested in Latin America, 13% in the U.S. and 9% in Europe.

  • In terms of deal volume, mixed female-male founded teams make up 15% of investments in 2019 in Latin America, in comparison with 14% in the U.S. and 11% in Europe.

  • in terms of funding all-female teams, the U.S. still leads. In Latin America, the women-only teams made up 4% of investment deals in 2019, on par with Europe but behind the U.S. average of 8%.

Read the full study HERE.