Startups led by women receive just Rs 4 out of every Rs 100 raised by founders, per the study, entitled ‘The ₹4 Problem: Women Founders and the Market Gap Hiding in Plain Sight’.
The funding gap is more of a structural market inefficiency rather than merely a diversity issue, the report said. It notes that boosting women’s economic participation could add hundreds of billions of dollars to India’s GDP.
According to the report, women-led MSMEs face a credit shortfall of over $158 billion, highlighting the significant amount of untapped economic potential.
Citing findings from Boston Consulting Group, the report said women founders continue to receive less funding even though their companies generate 10% higher cumulative revenue over five years and build teams that are three times more gender-inclusive.
Debunking the narrative that the pipeline of women founders is weak, it showed that India has recorded a 1.7-fold rise in girls enrolling in high school STEM streams between 2013 and 2024, alongside a twofold jump in the number of women registering for the JEE between 2015 and 2025.
“When capital concentrates around pattern-matched familiarity, the same schools, the same companies, the same networks, blind spots emerge. Blind spots create inefficiency. And inefficiency, for those willing to see it, creates opportunity,” said Vani Kola, managing director and founder, Kalaari Capital.
“The funding gap isn’t just a question of equality. It’s a failure of price discovery. When an entire category of founders is systematically underestimated, it requires deliberate catalysts to bridge that gap. Until then, the market remains unequal,” Kola added.
The report also pointed out that although women make up 38% of VC analysts across firms, their representation drops sharply to 16% at the partner level, where key capital allocation decisions are taken.