WeTech loan program seeks to boost women-led startups

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This article was published 18/12/2024 (292 days ago), so information in it may no longer be current.

Manitoba lacks female technology startup founders — and a new loan program aims to grow the pool.

North Forge, a local not-for-profit tech startup incubator and accelerator, has partnered with WeMB (formerly the Manitoba Women’s Enterprise Centre) on a loan program launching next year.

It follows a deep dive by North Forge’s chief executive: upon comparing Manitoba numbers to other provinces, Joelle Foster found the keystone province had the lowest percentage of female tech founders in Canada.

North Forge and WeMB have formalized a partnership to tackle one of entrepreneurs’ biggest hurdles: financing.

“We both want to … increase the number of women in the tech sector here,” said Heather Stephens, WeMB loans manager. “Given (North Forge’s) expertise and our expertise, it’s just a win-win partnership.”

In 2025, the two organizations will disburse 10 loans of up to $25,000 each.

Businesses participating in North Forge’s founders program will be the recipients; eligible applicants must identify as women or gender diverse entrepreneurs.

Financing technology startups is risky, Stephens noted: “There is so much uncertainty and, obviously, a lack of collateral. It’s not as if you’re financing tangible equipment.”

Further, it’s hard to tell which new startups will be viable, Stephens said. Tech startups often aren’t profitable during their first years of operation and many shutter without seeing success.

That’s where North Forge comes in, Stephens explained. It is mentoring entrepreneurs to grow their businesses; it can highlight promising individuals.

Startups currently in the last two stages of North Forge’s founders program — those who are commercializing their products or growing their companies — are eligible, as are program graduates.

“Once they’re in the incubator … they are ready for funding,” said Foster, who’s also North Forge’s president.

Women and non-binary entrepreneurs face greater obstacles to funding, Foster stated. A 2024 Women Entrepreneurship Knowledge Hub report found just four per cent of venture capital money goes to female founders.

Women are often left with traditional institutions like banks that are “very difficult” to elicit funding from for tech startups, Foster said.

A majority of venture capitalists are men, she continued, adding unconscious bias likely contributes to the lack of funding for women.

Keira Fogg said she’s been asked if her husband works in tech while promoting her own startup, Ribit AI.

“It’s just like … would you ask that of a male founder?” said Fogg, 40.

It’s an example of the “subconscious biases” she’s noticed when pitching her business to various organizations. The need to prove yourself is greater as a female tech entrepreneur, Fogg said.

Ribit AI, an artificial intelligence-powered sales and marketing tool for the automotive industry, is currently being worked on in North Forge’s founders program. Fogg said she’ll consider applying to the WeTech loan program — the name given to WeMB and North Forge’s partnership (northforge.ca/wetechstartuploans).

“I think anything that we can do to support women in business is amazing,” Fogg said of the loan plan.

North Forge has seen an uptick in female and non-binary Manitobans using its services. Women-led startups consumed 29 per cent of businesses in the founders program this year; non-binary participants attended a recent women and gender diverse carpentry workshop, Foster said.

She pointed to North Forge’s Women in Innovation Lab, which provides resources and mentorship to women and gender diverse entrepreneurs, as a reason for the demographic shift.

Foster began Manitoba’s Women’s Equity Lab investment group in 2022 to draw women to angel investing. It’s another way to funnel money into women-led startups.

“Women are the primary buyers,” Foster said, emphasizing more female entrepreneurs will grow the economy.

She called the partnership between WeMB and North Forge “innovative.” It’s the first of its kind in the province.

WeMB will review loan applications on a continuous basis, checking key factors like business plans and cash flow. It plans to meet quarterly with North Forge to assess the program. Both organizations expressed a desire to continue WeTech past 2025 if it’s successful.

The three-year loans come with an interest rate of prime plus four per cent. Rates are fixed once the loans are disbursed.

gabrielle.piche@winnipegfreepress.com