Isabella Gorini
Impulse4Women
The fintech industry is growing at a rapid rate, transforming the financial services landscape. Market gaps can be seen particularly in the realms of diversification. Female entrepreneurs are playing a key role in this process, renewing and reshaping a largely male-dominated sector. The presence of female entrepreneurs highlights previously overlooked possibilities.This transformation creates unique insights and new opportunities for future generations, not only in fintech, but in society at large.
One of the most prominent examples of female entrepreneurship is Ellevest, a women-led tech startup founded by Sallie Krawcheck in 2014. With her extensive experience as a former Wall Street executive, Krawcheck identified a need for investment services that catered towards the needs and aspirations of women. Ellevest’s robo-advisor program quantifies factors that disproportionately affect women, such as salary gaps and career breaks. Ellevest helps to level the investment playing field through personalized investment strategies which align to the unique lives and values of women. Ellevest’s success has not gone unnoticed, gaining support from high-profile investors such as Venus Willams and Melinda Gates.
Cadence Cash is another noteworthy startup in fintech, aiming to close the $100 billion credit gap for women and diverse entrepreneurs. Founded by Charles and Andrea Inokon in 2022, Cadence Cash has quickly become a leading fintech for social responsibility. Personal insights into cash flows, invoices, and funding readiness are provided by their virtual CFO, Angel. Microloans ranging from $1,000 to $150,000 are offered, helping to alleviate many of the challenges for small businesses to qualify for financing. Cadence Cash boasts over 1,300 users, 60% women, and a lending pipeline of over $11 million. Future plans include B Corp certification, and the opportunity for $5,000 Thrive Grants to impactful businesses.
The integration of investment into daily life is made easy through WealthMeUp, a female-first embedded fintech app. Created by Feli Oikonomopoulou during her MBA at the Yale School of Management, WealthMeUp allows users to invest rewards earned from everyday purchases directly into their investment portfolio. WealthMeUp’s routine investment strategy caters primarily towards Gen-Z and millennial users, 70% of which are female. Oikonomopoulou has expressed future plans to create direct investment opportunities, generating income through partnerships funding user rewards.
Knomee is an emerging leader in innovation designed to give women confidence and control over their personal finances. Founded in 2023 by Marla Sofer, this fintech company uses behavioral science to create a personalized, gamified technique to aid users in defining their goals. With 64% of its user base being female, Knomee creates customization through connecting individuals with trusted advisors and building strong support networks. Knomee aims to transform capital into a tool for self-expression, aligning to women’s aspirations. While there is an ever growing presence of gender diversity in fintech entrepreneurship, a gender divide is still largely evident. According to International Finance Corporation (2024), women make up less than 25% of fintech customers, and only 12% of fintech founders (Internisa, 2024). These statistics in no way reflect the capabilities or ambitions of women, and highlight a need for diversification in fintech.
Women entrepreneurs in fintech face several unique challenges. One challenge can be seen in funding disparities, as women-led startups receive markedly less funding compared to those created by men, impacting the ability to launch and scale business. Despite the progressive image of the fintech sector, industry bias is extremely evident. Skepticism towards female founders creates limited access to entrepreneurial networks. This cutswomen off from crucial networks for mentorship and capital, discouraging many potential female entrepreneurs from entering the sector .
Ellevest highlights many of the gender disparities in finance, such as the gender pay gap. Women make an average of 84 cents for every dollar that men make, and are much less likely to get a raise, discrepancies even more evident for women of color . Mothers are often penalized for taking time to care for their children, a factor which is responsible for three-quarters of the employment gap between men and women in the United States. Women with disabilities are more likely to be underemployed, or underpaid, making them on average significantly poorer than men with disabilities. It is important to note that only 10.4% of the CEOs on the Fortune 500 list are women.
While many of the statistics highlighted by Ellevest can be viewed as discouraging, these insights may be used to help create opportunities. Ellevest notes that companies with more women in board, executive, or senior management positions routinely outperform companies without gender diversity. It has been shown that organizations with at least 30% women in leadership roles are 12 times more likely to be in the top 20% for financial performance. These factors can be used to make positive changes in fintech, and the financial landscape as a whole.
Many women-led fintech startups have a focus on educational components, helping to improve financial literacy and bridge discrepancies. These innovative perspectives bring new solutions to longstanding financial challenges, while aiding in breaking down barriers in the broader financial industry. As more women succeed in this sector, limited perception expands, and new generations become inspired.
The importance of female-led fintech startups should not be underestimated. Their presence has a profound impact on industry and society at large, through many unique strategies. The focus on customized financial needs of underrepresented groups addresses underserved markets, expanding the reach and potential of financial services.
The future of women in fintech is bright, but not without dedication and the removal of limited perceptions. Initiatives such as accelerator programs, mentorship opportunities, and women-focused investment funds help to create gender-diverse opportunities. There is an ever growing number of consumers seeking financial support specific to their values and experiences. Women-led fintech organizations excel in aligning goals to user diverse, specific needs. The evolution of gender attitudes, combined with advances in technology can help aid women in fintech advancement.
Women-led fintech startups are breaking barriers and reshaping the industry into one that is more inclusive, diverse, innovative, and informed of unique user goals. Progress is made evident from Sallie Krawcheck’s Ellevest, to emerging platforms such as WealthMeUp and Knomee. These entrepreneurs are addressing long-standing disparities in financial services, opening up new opportunities for women in finance and technology, and paving the way for future generations.
Despite challenges such as funding, representation, and societal gender discrepancies, innovation persists. The successes of these female entrepreneurs have shown just how powerful diverse fintech leadership can be. As the fintech sector continues to evolve, it is evident that women play a key role in promoting financial inclusion, creating a more equitable financial future for all.
Sources:
https://www.forbes.com/sites/nicolecasperson/2024/08/06/17-fintech-apps-created-by-women-for-women
https://www.ifc.org/en/podcasts/audio-stories/2024/bridging-the-gender-gap-in-financial-services
https://www.ellevest.com/magazine/disrupt-money/stats-about-women-money
