Nykaa’s Falguni Nayar explains why many investors don’t choose to invest in women-led businesses

• Only seven out of the 91 startups in the unicorn club are actually led by women.
• Nayar explained that there is a generic notion that women usually have a lot of personal commitments at the age when they are starting out their careers.
• “I think you can get a life long commitment from women as an investor or an employer,” she said.

The Indian startup ecosystem touched its prime in 2021 with a record level of funding. Several startups also made it to the unicorn club, but the contribution of women entrepreneurs have been very limited in this regard.

Only seven out of the 91 startups in the unicorn club are actually led by women. No, the problem is not in the lack of talent among women, but seems to be in the recognition that is needed. A unicorn, in the startup parlance, is a company valued at or over billion dollars.

For several years, many entrepreneurs have raised concerns over the lack of investment in women-led businesses. The same stands true today, even though it has been getting better with more female participation in the startup ecosystem.

Falguni Nayar, the founder and chief executive of online cosmetics platform Nykaa, explained that there is a generic notion that women usually have a lot of personal commitments at the age when they are starting ot their careers. This, even though completely incorrect, becomes an issue for investors and entrepreneurs as they anticipate a change in priority for the woman.

“What happens with young women is that as they are entering the career, and that is also the time when their commitment in terms of marriage, children goes up. Then everyone starts doubting whether they [would] stay committed to the business and that doubt is what makes many investors, you know, not really bet on women,” she said during her conversation with Sanjay Kohli, managing director and member of the leadership team at Investcorp, at an event on Wednesday.

She further elaborated, “With my own personal experience I have felt that, yes, maybe some flexibility women need during a particular period in their lives. But if you can support them through that — it is such a short period of time — that beyond that they end up being committed to the organisation.”

“I think you can get a life long commitment from women as an investor or an employer. I think women today are equally committed to their careers or their business mindset,” Nayar emphasised.

She noted that she did not face any such discrimination during her entrepreneurial journey because of the stage she was in her life. “If someone asks me if there is a glass ceiling, not just today, but even in the last 10-20 years, I have said there is no glass ceiling. Men are not waiting to push women down. Women need to feel empowered to want to be, do more for themselves. And I think we can definitely make a contribution to society,” she added.

“I do believe that women need to be ready to lead, very often women are afraid to spoil the applecart of their home if they take on too much responsibility. First it has to begin in their mind that they want it for themselves and they're ready to do what it takes to be where they want to be.

A 2020 report by Initiative for What Works to Advance Women and Girls in the Economy (IWWAGE) highlights that only seven out of 100 entrepreneurs in India are women. The most common reason for them to start their business was out of necessity rather than aspiration, the report added.

Anisha Singh, founding partner at She Capital, previously told Business Insider India that even though the female participation in the startup ecosystem was low, it has been growing over the last few years. “The reason for delay in women reaching the mark at the same pace as men is because they started slightly later,” she said.

SEE ALSO
Vodafone Idea’s British parent could infuse capital in the telco after refusing to do so for several months
The third largest player in the Indian snack industry is coming up with a likely ₹1,000 crore IPO
LIC IPO: Here is a list of LIC policies not eligible under policyholders’ special quota