Funding the Future: Why Women-Led Mobility Startups Struggle for Capital and How to Change That

This article has been contributed by Monalisha Thakur, Co-founder & CMO, Tummoc.

The mobility industry is evolving quickly due to new technologies and the growing demand for sustainable forms of transport. While certain startups are leading this, the female entrepreneurs within those startups face huge challenges in accessing funds.

This is not just about inclusion; this is overlooked potential in the growth of innovations and market value. Funding mobile women entrepreneurs is critical as the sector has a high growth potential and gives effortless access to new markets and ideas.

Through their experiences, women founders in mobility have learned that the funding gap is fueled by deeply segregated biases. Regardless of possessing a solid business approach, market demand, and established traction, many women have remained skeptical about capital due to huge biasing hurdles. Investors appear to interrogate the founder's leadership skills or their forgetful technical competencies, assuming that they simply cannot expand vertically in a capital-rich industry.

This article discusses the issues that stem from insufficient funding provided as well as the steps that can be taken to foster a more inclusive volatile startup environment.

Reasons why women positioned in mobility face difficulties obtaining funding.

The numbers are shocking. Out of women led firms, only 2% venture into global capital mobility crossing nations which remains unprecedented.

Bias Against Investors, Implied and Expressed

Several female entrepreneurs reported a distinct difference in the way investors pitch to them versus their male counterparts. Men are frequently asked about their growth prospects, while women are asked the risks and challenges they are expected to encounter.

For instance, some investors are prone to asking women founders, “What do you consider the risks?” or “How do you intend to manage setbacks?”, whereas male founders are asked, “What’s the speed at which you can scale?”, and “What’s your expansion plan?”

This kind of difference in questioning leads to bias, unconscious in nature, where an entrepreneur is asked to think about the risks only instead of the opportunities available. A pitch that sounds less optimistic results in lesser investment.

Underrepresentation Within Venture Capital Firms

Venture capital as an industry is, for the most part and always has been, male-dominated, and very few women hold decision-making positions. This gives credence to the notion that male investors prefer to back male founders since they invest in people they can relate to.

A number of women in mobility have crossed paths with all-male investor panels who are not very familiar with female-led businesses in this space. Even if this is a lack of intent, it does create a sense of reluctance that makes it difficult for women entrepreneurs to access capital.

Mobilities businesses are more difficult to scale due to higher capital requirements, unlike many SaaS startup businesses, which can remotely expand with little funding.

Missed innovation opportunities

Women bring unique insights to mobility, particularly in public transport, accessibility, last-mile connectivity, and sustainability. When women-led businesses are excluded from funding, investors miss out on fresh, consumer-driven innovations that could reshape the industry.

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Ignoring a massive market opportunity

Women influence 70-80% of consumer purchasing decisions. Female founders often have a deeper understanding of market needs, particularly in areas like safety, convenience, and user experience. Overlooking their businesses means ignoring a huge potential for the customer base.

Slowing down industry progress

Let’s not forget that startups drive industry change, and limiting investment to male-led companies slows down innovation and market evolution. More diverse leadership leads to better financial performance and problem-solving, yet many investors are still hesitant to back women-led mobility businesses.

Well, change is possible. Here’s what needs to happen:

More women in venture capital and investment roles

To state obvious funding decisions, start with those who control the money. Increasing the number of women in venture capital and leadership roles will lead to more inclusive investment decisions.

Gender-neutral pitch evaluations

Startups should always be evaluated based on their potential, not the founder’s gender. Blind pitch assessments, where business ideas are reviewed without revealing the entrepreneur’s identity, could help reduce bias in funding decisions.

Expanding alternative funding options

Instead of relying only on VC funding, women entrepreneurs in mobility should consider impact investing, crowdfunding, or even grants. Moreover, many entrepreneurs have succeeded with crowdfunding platforms since they cut out the need for investors.

Better networking and mentoring opportunities

Women founders in mobility can overcome challenges of scaling and fundraising by joining women-centered accelerators and making use of organized mentorship systems.

There is a need for more active support for women entrepreneurs with investor access, experienced mentors, and industry stakeholders to help them address intricacies in the sector.

Investors should reevaluate the risk

The notion that women-led businesses are inherently a riskier investment is not always data driven. While the existing contemporary suggests that stronger returns are generated from diverse leadership teams, many investors are still skeptic. It is crucial that the financial arguments follow through. Prioritizing investment in women-run firms is essential in achieving sustained growth in a particular industry.

The lack of financial support for women entrepreneurs who wish to establish mobility startups goes beyond issues of gender and actually serves as a constraining barrier for innovation and expansion into new markets for the long-term evolution of the industry.

Allowing ladies to access the capital they require to innovate will deduct systemic biases, allowing women entrepreneurs to compete on a more leveled field. Women owned firms are experts in deep market analysis and have fresh ideas and unique ways of solving problems, which is beneficial for the mobility industry. However, existing biases hinder their access to funding, leading to slower innovation in the industry.

Momentum is building, but it is far too slow. Women-led organizations should have a seat at the table since this leads to smarter policy-making by receiving direction from industry experts rather than outsiders looking in.

These problems can enable mobility sectors to take advantage of new opportunities, setting in place greater competition within the industry as well as fostering inclusion.

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