There’s no doubt the startup ecosystem is booming in Latin America. VC investments are at all-time highs, hitting a whopping $12 billion across more than 500 deals in 2021, and the year isn’t even over yet.
But there’s a dirty little secret hiding behind those big dollar signs: female founders receive only a tiny fraction of that funding pie compared to men. In fact, female-founded startups have fared more poorly since last year with a 27% decrease in funding to female startup founders around the globe during 2020, per Crunchbase. What’s worse, the Mastercard Index of Women Entrepreneurs reports that more than 50% of companies led by women have been negatively impacted by the pandemic.
A new Women’s LAC Accelerator program via WeXchange, an initiative created by IDB Lab – the innovation laboratory of the Inter-American Development Bank Group, is increasing the visibility of female-led STEM startups and their innovations with investors, while connecting them with the expert insights and resources they need to shine as brightly as their male counterparts.
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As the largest source of development financing for Latin America and the Caribbean (LAC), IDB Lab’s strategy is to identify and support new ideas and startups with the potential to improve the lives of vulnerable and underserved populations in the region. Driving more economic development by women, particularly in science and technology fields, is among its key objectives.
IDB Lab launched its WeXchange forum in 2013 with the purpose of connecting more female founders in STEM (science, technology, engineering, and math) with mentors, investors, and industry experts, said IDB senior investment officer, Laila Gyoung Joo Choe.
“Back in 2011 or 2012, the percentage of startup companies funded by VC firms that were led by women was very low, and [due to that] it was no surprise that the network of female entrepreneurs was far less robust than the network of male founders. So we launched [the WeXchange Forum] to connect these entrepreneurs with mentors and investors, with annual pitch competitions to help provide more visibility for female entrepreneurs. When we launched the first edition of the pitch competition in 2013, we received more or less 100 applications. Last year, we received more than 900,” Choe said.
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After nine years of cultivating its WeXchange network, developing a full accelerator program for female founders was the next logical step.
“Google for Startups has been running a renowned acceleration program for founders in the region for many years now. We thought it would be excellent to partner with Google and replicate that program specifically for women. What’s different is that we are inviting more women mentors and investors as program speakers and participants. It’s also very valuable for founders to have such direct access to Google technology experts,” said Choe.
IDB Lab received more than 300 applications from startups located in more than 30 countries, and 20 female founders were selected for the 10-week virtual program, which features immersive workshops and training on digital marketing, product design, customer acquisition, fundraising, and leadership development, in addition to one-on-one mentoring sessions with investors and experts from Google, WeXchange/IDB Lab, and Google’s tech hub, Centraal.
“We wanted to democratize access to these types of programs by more founders in the region, including those from nascent ecosystems such as Central America, Paraguay, Bolivia, or the Andean region. So, we invited all the applicants that weren’t selected for the core program to participate in an ‘accelerator-light’ curriculum of workshops called WeXchange Ignite,” Choe added.
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Lissy Giacomán is co-founder and CEO of Vinco, a Mexican edtech startup that connects companies and their employees with customized continuing education opportunities to help improve loyalty and retention. After less than a year of operation, Vinco recently secured a $2.4 million seed round and it counts Didi Food, Kavak, and Nestle among its impressive client base.
Giacomán was invited to participate in Y Combinator’s much larger virtual accelerator program last summer and was later selected for the WeXchange program that is open to women only. She appreciates the more intimate and personalized experience she’s having in the program, as well as the opportunity to connect in a more meaningful way with peers and mentors.
Patricia Tavares, co-founder and CEO of NeuralMind, is no stranger to the needs of growing startups. She and co-founder Roberto Lotufo created the AI-driven due-diligence solution while simultaneously managing the University of Campinas’ Science and Technology Park and startup incubator in São Paulo. The company’s AI search tool, NeuroSearchX, has won seven international competitions for technical excellence, and the company is gearing up for a full product launch soon.
Tavares is exploring internationalization and an exit plan for her startup, while thinking about her next potential AI venture. For her, the biggest benefit of being in the women’s accelerator program has been connecting with mentors who can help her achieve those next milestones at NeuralMind.
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“Besides this being a female leadership program and the lectures, which are great, what I love most is the mentors. They’re highly qualified. I had my first mentoring session a few days ago with a serial entrepreneur and investor, and he reinforced my go-to-market strategy for the new product. It’s also been good to get closer to the Google experts. I believe all of this will bring me more visibility with potential investors and getting to know more senior mentors increase your network and your chances in doing international business,” Tavares said.
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Both Giacomán and Tavares were excited about delivering the Demo Day pitches, which took place in front of a live, virtual audience of peers and potential investors last week. On the IDB Lab side of the equation, the goal was to “attract more investors to the demo day, and hopefully, those investors will get interested in many of the women founders. It’s not just about investment – it’s really about building those relationships with VCs and other industry experts,” Magdalena Coronel, IDB Lab’s chief investment officer, told LABS.
The IDB Lab team will be watching those pitches closely as it considers which startups, if any, to invest in further.