Funding has always been a man’s game, and often it becomes quite challenging for women to secure funds from investors, feels Kanika Gupta Shori, Co-founder and COO, Square Yards.
Narrating her journey as an entrepreneur in the real estate industry, Shori said many investors still don’t find women-led startups in a male-dominated industry appealing or worthy of investment until they bring in a male co-founder.
“In my decade-old career journey at Square Yards where I have participated in various funding rounds, I have noticed that most investors often harbour certain preconceived notions about a woman, more so when the business is in a male-dominated industry. But I feel with time, things are improving and changing for good. The only way to navigate around these preconceived notions is to be the hardest working person in that room and let your work do the talking and speak for itself,” she said in an interview for DealStreetAsia’s latest report titled Female Founders in India 2023.
According to her, while the times are changing, investors must actively work to eliminate harmful biases in their screening processes, prioritising measurable metrics and performance indicators over subjective assessments. Furthermore, it is crucial to celebrate successful women entrepreneurs and elevate the visibility of female role models.
Edited Excerpts:-
What led you to become an entrepreneur? How would you describe your entrepreneurship journey so far?
Square Yards was born out of passion, combined with an untapped opportunity. Back in 2014, I was looking at restarting the second innings of my professional career after a maternity break and exploring ideas for the next big challenge in my career and found that untapped opportunity. Both Tanuj and I had worked in capital markets for a decade across various sectors. We used to invest a sizeable chunk of our personal wealth into real estate, and we realised that India’s real estate market is potentially the last trillion-dollar opportunity that is still fragmented and unorganised. We saw a lack of scalable platforms which are blending consumer experiences with tech innovations and saw a gap in the offerings. We soon identified that there was a burning need for an independent and unbiased real estate platform that would not only guide homebuyers through the search and discovery process but also handhold them through the entire homebuying journey conveniently.
Henceforth, I decided to pursue this idea and laid the foundation for Square Yards in terms of early execution, putting in whatever savings we had and giving up every asset we owned. Tanuj later quit his full-time job and joined Square Yards as well. Fast forward to today, we are a prolific team of 7,000+ employees with a presence in 100+ cities and 9 countries. Reflecting on my entrepreneurial journey, I would say it is not easy being an entrepreneur and a new mother at the same time. As a mompreneur, we are in constant conflict on how and what to prioritise.
Yes, it has been an exhilarating odyssey, but totally worth it. Throughout this venture, I encountered a myriad of challenges, faced setbacks head-on, celebrated victories, and, undoubtedly, gained invaluable lifelong lessons. Navigating the dynamic landscape of entrepreneurship along with handling the biological responsibilities of being a mother, I can take pride when I look back knowing that the lessons learned and growth experienced will continue to shape both my entrepreneurial endeavours and my responsibilities as a mother.
What are some of the biggest challenges you’ve faced as a female founder? What challenges did you encounter while fundraising? How did you overcome them?
Hiring the right talent was the biggest challenge when starting up, as young, qualified professionals do not opt for the real estate sector as a career due to uncertainty and lack of work culture. We reached out to friends and colleagues we knew from our past jobs and convinced them to jump ship along with us. Today, we can proudly say that we have the largest team of co-founders with almost zero attrition at the leadership level.
The next challenge was navigating the Indian real estate industry which is mostly male-dominated, fragmented, and unregulated at its core and trying to change it as a woman founder. With an information asymmetry, service vacuum, and lack of organised distribution in India’s real estate sector, the challenge was to build a credible platform and gain the trust around it with both external and internal stakeholders to complete the home-buying journey of a consumer.
With the help of my A-star team, we solved this by focusing on technology. Our integrated enterprise technology and broker aggregation made the real estate value chain more efficient by plugging loopholes and infirmities, making the process faster and providing higher velocity in developer projects. We differentiated ourselves by focusing on the challenging aspect of real estate transactions, overlooked by others. Successfully cracking this code, we developed a full-stack model covering the entire value chain from search to transactions, to home loans, property management, and home interiors. Our in-house technology, advanced machine learning, and AI brought transparency and efficiency to the property ecosystem. Today, we are India’s largest integrated proptech platform with $3.2 billion annual
GTV run-rate and a revenue run-rate (on a TTM basis) of $100 million, besides being divisionally profitable/EBITDA positive. Our fundraising journey has been more or less smooth but unconventional.
Has the funding bias towards female founders improved in recent years? Have you seen a mindset change?
Funding has always been a man’s game, and often it becomes quite challenging for women to secure funds from investors as men do. Many investors still don’t find women founders leading male-dominated industry startups as appealing or worthy of investment until they bring in a male co-founder.
However, things are changing for good with women starting businesses at a higher rate than men and achieving success with their innovations and unique perspectives. Women-led startups are gaining attention for their ability to address market needs that may have been overlooked earlier. What’s more heartening is that the entrepreneurial ecosystem is becoming more inclusive, providing women with greater access to mentorship, networking opportunities, and resources. Initiatives and organisations dedicated to supporting women entrepreneurs are on the rise. This support system has played a crucial role in empowering women to navigate the traditionally male-dominated funding landscape. Numerous success stories of women entrepreneurs who have shattered glass ceilings and achieved remarkable milestones are inspiring a new generation of female founders. These role models are not only changing perceptions but also encouraging more women to pursue entrepreneurship, fostering a virtuous cycle of empowerment and success.
Do you think having male co-founders made a difference in your fundraising journey?
Well, I have a different rationale for this. Just because my co-founder Tanuj Shori happens to be my husband, I don’t feel like I’m playing second fiddle to him during funding discussions and pitches. We both have clearly defined and differentiated roles in Square Yards. As a COO, I am more involved in day-to-day operations and running the company, while he is the CEO. So along with our CFO, he takes the lead in funding discussions and investor relations. Additionally, the diverse perspectives, skills, and experiences brought by me and my male co-founder are often valued by investors, as they recognise that this diversity contributes to better decision-making and increased chances of business success. We balance each other’s weaknesses and strengths, and that is what is needed to run a successful business.
Do you think that investors tend to have different expectations or standards for female founders versus male founders? Can you share any specific questions that are typically asked of female founders?
In my decade-old career journey at Square Yards where I have participated in various funding rounds, I have noticed that most investors often harbour certain preconceived notions about a woman, more so when the business is in a male-dominated industry. But I feel with time, things are improving and changing for good. The only way to navigate around these preconceived notions is to be the hardest-working person in that room and let your work do the talking and speak for itself. As a women founder, I am making a conscious effort to hire more women in my organisation and change that perspective about the real estate industry.
What are some of the potential reasons for the gender gap in venture funding, and how do you think these can be addressed?
In India, a pervasive bias still exists that women are unsuitable for leadership roles and should stick to gender-specific roles. This bias is mostly perpetuated by the underrepresentation of women in senior leadership positions across industries. For instance, out of 30,000 active digital startups in the country, only 18% are founded by women — a concerning statistic. Investors often overlook the unique challenges faced by women entrepreneurs, creating a confidence gap that undermines the perceived viability of their business ideas in a male-dominated entrepreneurial landscape. A significant cultural shift is imperative, from organisations and executive boards down to individuals, to challenge stereotypes and champion diversity. Creating proper networking opportunities that connect women entrepreneurs with potential investors is vital for securing funding. Investors must actively work to eliminate harmful biases in their screening processes, prioritising measurable metrics and performance indicators over subjective assessments. Furthermore, it is crucial to celebrate successful women entrepreneurs and elevate the visibility of female role models. This not only inspires the next generation but also works to reshape perceptions about the capabilities of women in the business realm.
In the current environment, when funding will be more difficult to secure for most startups, could female founders find it tougher to raise capital?
I don’t think so. Women entrepreneurs today are bringing in fresh, innovative ideas and solutions and growing their businesses at a rapid clip. This has created a fantastic opportunity for investors to pivot into unique businesses in untapped sectors and markets rather than engaging in an existing market segment that may be highly saturated. Besides, women-owned businesses are proving to be successful and profitable enterprises, having a lower failure rate which has piqued the attention of investors. The increasing demand for products and services from women-owned businesses has made it an ideal time for investors to get involved in women-led startups. Investors should seize this compelling moment the entrepreneurial landscape is providing by investing in women-led startups and actively contributing to the advancement of diverse, innovative businesses that contribute positively to economic growth.
How deeply has the funding winter affected your company’s fundraising and expansion plans?
From the very outset, we have recognised the importance of building a sustainable and economically viable business model. Our approach has been centred on solid unit economics, rather than being dependent on external funding cycles. Even though we have diversified our business, launched new categories and expanded our operations over the years, we have fostered financial stability, focused on the efficiency of our operations, and cultivated resilience in the face of market fluctuations, which has helped us weather the effects of funding winter.
What’s the fundraising outlook for 2024?
Companies with sustainable practices, sound unit economics, and scalable, profitable business models will be on the radar of potential investors. Unlike the FOMO-driven decisions observed during 2020-2022, investors can take a more discerning approach by undergoing deep diligence while focusing on profitability and sound financial metrics. Investments in proptech are expected to increase in 2024 as the sector displayed great resilience amid global headwinds and has displayed tremendous growth and transformative potential over the years. Proptech players specialising in digital twin technology and construction tech are likely to secure a majority share of investments, with realtors growing emphasis on enhancing the buying experience and reducing construction times while maintaining high-quality standards. Enterprise/SaaS tech and fintech are also expected to garner good investments as India slowly transforms into a consumer market and manufacturing hub.
What advice would you give other female entrepreneurs?
Don’t let concerns about your gender weigh you down. Believe in yourself because truthfully, no one will believe in you as profoundly as you do. Be your own biggest cheerleader and resist the pressure to conform to societal norms. Instead, celebrate your uniqueness; who knows, you might just defy the status quo and shine brightly in whatever you do. Also, try not to let your emotions cloud every decision, and take all advice with a pinch of salt. Remember, we are biologically wired to be exceptional multitaskers, capable of balancing our homes and work with finesse. It’s a strength, not a weakness. And let’s not forget the importance of investing in self-care. Consider it the fuel that propels you to chase and achieve your dreams. So, keep slaying, women, because you should!
In your opinion, what are some of the most important factors that investors should consider when evaluating a startup, regardless of the founder’s gender?
Investors should study the viability and sustainability of the startup’s business model; how it generates revenue, the scalability potential and whether the idea has a genuine market. To enhance the rigour of their evaluation, investors should conduct a thorough analysis of the market dynamics, competition, and the company’s positioning within the industry it is serving. This will provide a fair idea about the company’s ability to seize opportunities and navigate challenges effectively.
Secondly and more importantly, evaluating the founding team’s potential based on their past performance, integrity, ownership and resilience as the success or failure of a business largely depends on competent vs incompetent founders. In all, investors should anchor their decisions on objective criteria tied to business fundamentals, irrespective of the founder’s gender.
