By Odille Sánchez

Despite female founders receiving less than 2% of venture funding worldwide, Latin America still represents a growth opportunity for women entrepreneurs.

According to Global Entrepreneur Monitor, the rate of small businesses founded by women in Latin America is 21.2% — higher than most regions, but predominantly focused within the informal sector.

Thankfully, LatAm already has what other regions lack: a natural impulse by women to want to start businesses. The challenge, however, lies in how to bring that drive into the formal technology startup ecosystem.

While some progress has been made, the public and private sector can implement strategies to support women tech entrepreneurs, such as emphasizing building community, promoting access to new technologies, and establishing responsible metrics for investing in women-led startups.

Building community

Odille Sánchez​ of Tecnológico de Monterrey

While studies show women-led startups generate twice as much revenue per dollar invested as their male counterparts, women accounted for just 15% of all tech startup founders in 2023.

The good news is that regionally, LatAm has higher rates of female founders, particularly in countries like Colombia, Chile, Ecuador, Guatemala and Panama. However, collaboration among those in that community, and inspiring the next generation of female entrepreneurs, remain challenges.

A few organizations are doing this already, including Women In Stem Entrepreneurship (WISE) Latin America and Rede Mulher Emprende Brasil. And Endeavor has organized programs aimed at bolstering support for female entrepreneurs in countries like Colombia.

But overall, strong local and regional communities of female entrepreneurs are nascent. Latin America’s tech community can do a better job of building support and information sharing networks.

This includes: dedicated conferences; digital dashboards for VCs which list women entrepreneurs; entrepreneurship-focused podcasts and social media channels; public and private accelerator programs dedicated to female founders; and more mentorship programs for female business school and STEM students.

Making sure young Latinas can see women in tech leadership roles can help break down gender stereotypes and help usher in a bigger generation of female entrepreneurs.

Promoting digitalization

Like many developing economies, access to technology is a problem in LatAm. My team’s research found financial constraints limit entrepreneurs’ access to digital technologies, which is crucial to the value creation process.

Furthermore, according to United Nations Economic Commission for Latin America and the Caribbean data, only 36% of micro, small and medium enterprises in LatAm have their own website and only 16% use e-commerce tools. In Mexico, the figures are even lower.

This lack of access to technology represents a significant challenge for LatAm women in particular, given their propensity to found companies within the informal sector.

Public and private sector leaders must better support digitalization in Latin American economies. Training programs for women focused on e-commerce and communications tech can help them better access growing digital markets in LatAm.

Some of these initiatives already exist. Chile’s “Digitaliza tu Pyme” program; Colombia’s Digital Business Transformation Centers; and Costa Rica’s Intelligent Community Centers are examples. Here in Mexico, Tec de Monterrey hosts its own business development center for small and medium enterprises, which promotes digitalization.

Increased access to technology and skills will catapult the Latin American women’s entrepreneurial spirit into the digital age.

Access to financing

In Latin America, 73% of women entrepreneurs cannot access financial support. As a result, women end up launching businesses with their own savings, assuming massive risk.

More recently, public development banks, or BPDs, have attempted to provide women access to financial tools, offering low interest loans and working capital.

For example, the World Bank’s Financing for Women Entrepreneurs and the Multilateral Investment Fund increase access to financing for women from developing countries. Nonprofits like Pro Mujer also offer a variety of services to women entrepreneurs, including loans, business training and technical assistance.

While these initiatives are important, they aren’t enough to close the access to finance gender gap.

VCs and angels should establish internal metrics to ensure a percentage of funding in LatAm is directed toward female founders. Such investments will pay off in the long run, as studies show that the return on investments into companies with female co-founders outperformed those with only men leadership teams by 63%.

For all its hardships, LatAm has been blessed with women who take action to better their economic circumstances through entrepreneurship. Their natural inclination to found businesses can be better channeled into the growth of the region’s tech sector by providing female entrepreneurs with the community, financial support and digital tools necessary to succeed.

Odille Sánchez​ is the leader of the tech and scientific-based Entrepreneurship Center of Excellence at Tecnológico de Monterrey​, one of Latin America’s leading engineering universities. A Ph.D. candidate in entrepreneurship, she has presented her research in the field at leading institutions including Boston University​, Techstars and others.

Illustration: Li-Anne Dias