Are women really founding 55% of China’s internet startups?

Copyright: elwynn / 123RF Stock Photo

On Monday, Bloomberg ran a fascinating piece on the growing role of women in China’s venture capital industry. While the focus of the article is (understandably) VCs, there’s also this interesting tidbit about internet startups:

The Chinese government estimates females found 55 percent of new Internet companies and more than a quarter of all entrepreneurs are women.

Needless to say, the assertion that 55 percent of China’s internet startups are founded by women caught some eyes in male-dominated tech sectors across the globe. Other outlets like Silicon Republic have already started to run with the story, putting the high percentage right in the headline.

If it’s accurate, it would be an impressive accomplishment for China. But where does this “55 percent” number come from, and what does it mean? Are 55 percent of China’s internet startup founders really women?

Do China’s internet startups look like this, or are more women than men really involved? Copyright: sjenner13 / 123RF Stock Photo

Whence 55%?

Although several articles seem to cite this book as the source of the 55 percent figure, it actually comes from a white paper called “Gender Equality and Women’s Development in China” published by the Information Office of China’s State Council one year ago.

Does ‘new internet businesses’ mean real internet startups, or any small business that uses the web?

The white paper asserts: “About 55 percent of new Internet businesses are being founded by women.” It doesn’t provide any additional details or elucidate how its authors came to that number.

This phrasing raises a number of questions. Does “new internet businesses” mean real startups (the kind that build their own websites and try to raise VC funding) or does it include any new business relying on the internet (like Taobao-based C2C clothing shops)? Are startups with founder teams that have more men than women still counted towards that 55 percent number as long as there’s at least one woman on the team? The white paper offers no answers.

It’s probably worth noting that the government has reason to be generous in its definitions. Just before citing the 55 percent figure, the white paper notes that “The government has initiated an action plan to promote entrepreneurship and innovation among women, encouraging women to seek employment in emerging industries.” Being able to say that a high percentage of internet startups are founded by women certainly makes it look like the government’s action plan has been effective.

Ling Zihan (via LinkedIn)

Is it actually true?

In a word: no.

The government may be happily celebrating its 55 percent figure, but on the ground things look quite different. Earlier this year, Ling Zihan – the founder of TechBase, China’s first tech accelerator for women-led start-ups – estimated that women founded just ten percent of new tech ventures. When asked about the 55 percent figure cited in the Bloomberg piece, she told Tech in Asia that it depends what you consider an “internet startup.” If you don’t count Taobao shops, she estimated that about one-third of China’s internet startups have at least one female founder. About ten percent have female CEOs, she said.

Tech in Asia contacted several other investors familiar with China’s startup scene, and all of them agreed that when talking about conventional internet startups (not Taobao shops and their ilk) the 55 percent figure probably wasn’t accurate. Jenny Lee, a Shanghai-based managing partner at GGV Capital, told Tech in Asia that while she has seen a growing number of female founders in internet startups that have multiple-member founder teams, she estimates the number is around 20 or 30 percent, not the 55 percent estimated in the government white paper.

Still, there’s no denying that the number of women founding tech startups and getting involved in entrepreneurship is on the rise. That’s thanks in part to government programs, but also thanks in part to private ventures like Ling Zihan’s TechBase, which provide important resources for female founders. China’s internet sector still has a ways to go before women are really founding half of the country’s new internet companies, but with both private and public figures pushing for more women to get involved, it may reach 55 percent faster than you expect.

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from Tech in Asia https://www.techinasia.com/women-55-chinas-internet-startups
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