Investors are recognising the potential of women-led start-ups due to factors like high market opportunities and operational efficiency. Despite societal challenges contributing to gender disparity, women face hurdles entering the workforce. However, the investment appeal lies in the operational excellence of women-led businesses and their connection to a substantial customer base. In India, a study by IBEF reveals that out of 432 million working-age women, 13.5 to 15.7 million own businesses, employing over 22 million people. This surge in women entrepreneurs significantly impacts India's social and economic landscape across diverse industries, demonstrating their remarkable contributions to the electronic, automotive, technological, and e-commerce sectors.
Here are some reasons why investing in female-led enterprises makes business sense-
Better business performance
One of the primary reasons firms led by women are perceived to run extremely well is that women are known to take risks. According to a KPMG survey, 43% of women are inclined to take greater risks. They are therefore in an ideal position to see more opportunities and ultimately profit from them. The related organisation can also benefit from the variety of perspectives that women-led workforces foster, as these methods are specifically created with the goal of generating measurable results.
Women offer distinct viewpoints on goods and services. Female-led startups are better able to understand the requirements of women and create goods and services that cater to those needs. In the end, this gives consumers an improved item. For instance, Nykaa has swiftly grown to become India’s largest omnichannel beauty destination, with millions of satisfied consumers nationwide. Nykaa makes a special effort to provide customers with the best, offering them a wide range of options such as over 68 Luxe and On-Trend Stores, an online community for beauty enthusiasts that is constantly expanding, a Beauty Helpline, and their favourite brands. The success of Nykaa serves as an example of how female-led businesses can thrive by providing excellent goods and services that appeal to customers by having an extensive understanding of their target market.
Diversity promotes problem-solving
Uniting diverse teams, as exemplified in female-led enterprises, sparks fresh ideas, inventive problem-solving approaches, and an enhanced grasp of the market. A business equipped to address challenges with imaginative and efficient solutions boasts a diverse array of stakeholders and staff.
Forge strong bonds and associations
Investing in female-led businesses not only fosters strong relationships but also lays the groundwork for enduring connections with entrepreneurs. Taking the time to understand their founders allows businesses to construct invaluable networks, fostering connections that may lead to future opportunities, and gaining insights into their experiences and corporate objectives. White Globe, a prominent provider of translation and localization services with a client base exceeding 750 corporations and coverage of more than 350 languages, serves as an illustration of how such investments can cultivate mutually beneficial relationships within the business community.
Empowering women: Backing women-led enterprises!
There are several reasons why investing in businesses managed by women yields profitable outcomes for investors. This includes investment diversification across various sectors, faster and more efficient entry into expanded markets in a competitive manner, greater profit margins, and the chance to make global changes. Investors stand to gain a multitude of advantages through supporting female-owned enterprises. Such organisations provide quicker market entry for their investors, with an opportunity to make a change in the world.