Women entrepreneurs drive India’s D2C boom - yet funding still falls short

During the “Viksit Bihar: Envisioning a Developed Bihar through Women’s Participation” conference, Dr. Jitendra Singh stated that India hosts around 170,000 startups, of which approximately 76,000 are led by women, spanning both urban centers and rapidly emerging tier 2 and tier 3 towns.

And, ahead of International Women’s Day this year, Mastercard research revealed that 45 percent of Indian women had considered launching their own businesses—with millennials (46 percent) and Gen Z (45 percent) leading the trend, while Gen X and baby boomers trailed at 38 percent.

Their primary motivations included pursuing personal dreams (51 percent), improving work‑life balance (44 percent), and escaping traditional work structures (40 percent). Notably, 46 percent already run side hustles, with 61 percent of baby boomers doing so to boost their income.

Over the past decade, India witnessed a remarkable surge in startups and innovators embracing the Direct‑to‑Consumer (D2C) model, driven by expanding digital infrastructure, increased internet penetration, and evolving consumer preferences. As per Startup India report, the Indian D2C market is anticipated to grow to US$60 billion by FY27.

Prominent D2C unicorns such as Mamaearth, Good Glamm Group, and Licious exemplify this growth—two of them, Mamaearth and Good Glamm Group (operations ceased as of now), were co‑founded by women—and out of 108 Indian unicorns, only 18 are founded or led by women.

According to DPIIT data as of 15 May 2023, women‑led startups in the top three D2C sectors—personal and home care, food and beverages, and fashion—totaled 3,644, representing approximately 52 percent of all startups in these categories, a staggering increase from just 130 in 2017 (showing over 2,700 percent growth).

As per Ashish Sanganeria, senior partner, Transearch, women-led D2C brands in FMCG gained significant traction, particularly with the rise of quick‑commerce platforms like Zepto, Blinkit, and Swiggy Instamart.

He explained that these platforms' extensive dark-store networks and instant logistics enabled these brands to translate personal consumer insights directly into scalable, trusted products—bypassing traditional intermediaries. “This evolution not only showcases the power of agile, consumer-centric models but also underscores a deeper shift toward inclusive leadership and industry transformation,” he added.

Sanganeria highlighted that many of these ventures have emerged in the beauty and personal care space, followed by food startups with a focus on health, and lifestyle brands.

Jaideep Mehta, managing director at Rzolut (a risk and compliance company), echoed Sanganeria's observations. He cited examples of innovative startups such as Bhookha Hathi, co-founded by Abhimanyu Rishi and Kusum Bhandari in 2016, which began as a traditional food and tobacco products company, and White Cub, a vegan food company established in 2013 by Sonal and Sarla Singh.

Gauri Padmanabhan, a leadership advisor, highlighted that FMCG has historically been a sector led by eminent women leaders. She pointed to recent appointments such as Priya Nair becoming the managing director and chief executive officer of Hindustan Unilever (HUL), Prabha Narasimhan leading Colgate-Palmolive as the MD, and M R Jyothy heading Jyothy Laboratories as the MD.

Padmanabhan also emphasized that the COVID-19 lockdowns presented a pivotal moment for professional women seeking career alternatives that offered both flexibility and independence.

This shift not only spurred the rise of women-led startups but also attracted increased investment interest. Investors began to prioritize businesses that were sustainable, locally produced, and of high quality, aligning with evolving consumer preferences, she explained.

Notable examples of successful women-led startups include: Nykaa (Founded by Falguni Nayar), MamaEarth (Co-founded by Ghazal Alagh), Zivame (Established by Richa Kar), and Sugar Cosmetics (Founded by Vineeta Singh).

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Padmanabhan also highlighted Limeroad, an online fashion marketplace founded by Suchi Mukherjee. Limeroad distinguishes itself by allowing users to create virtual scrapbooks. Mukherjee's approach addresses consumer needs effectively, providing competitive pricing and fostering brand loyalty, she explained.

Padmanabhan also noted the disruption caused by women-led startups in the retail space and highlighted the entertainment industry—a traditionally male-dominated sector—where women have made significant strides.

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Some of the prominent examples are POPxo, a digital media platform founded by Priyanka Gill; Tiger Baby Films, a film production company co-founded by Zoya Akhtar and Reema Kagti; film production company Sikhya Entertainment, founded by Guneet Monga; and Mahila Manch, a stand-up comedy collective established by Shefali Pandey and Preeti Das.

According to media reports, states such as Maharashtra, Karnataka, Delhi, Uttar Pradesh, and Gujarat have the highest number of women-led startups in key D2C sectors. Notably, 47 percent of all women-led startups from these sectors hail from tier-2 and tier-3 cities.

Mehta concurred with the above explanation that 50 percent of women-led startups are in the tier 2 and tier 3 cities. “Traditional cities like Bengaluru and Delhi NCR are still in tier 1, and they are a cradle of innovation, which have created a new set of entrepreneurs who have come in,” he added.

Padmanabhan added that Maharashtra and Karnataka are progressive due to government support and initiatives that encourage women entrepreneurship. Some of the Maharasthra’s schemes are: Punyashlok Ahilyadevi Holkar Women Startup Scheme, Maharashtra Arthik Vikas Mahamandal, Nasscom Foundation Collaboration. And, Karnataka’s schemes supporting women entrepreneurs are: Udyogini Scheme, Stree Shakti Scheme, and Financial Freedom initiatives.

She emphasized that these regions understand brand funding, consumer needs, and market dynamics. She also acknowledged cities like Hyderabad and Pune for their strong ecosystems supporting startup growth.

Challenges faced

Padmanabhan highlighted that women-led startups often face specific challenges, particularly in securing timely funding and establishing robust internal processes during periods of growth.

However, Sanganeria offers a different perspective: fundraising for startups should not be determined by gender. He stated, “If your business model is sound, the product‑market fit is strong, and you possess clear insight, then there’s no reason to face challenges when raising capital.”

From a funding standpoint, Mehta noted that numerous government schemes and grants are available across various sectors—and their discovery has become easier through AI-driven platforms.

He also pointed out that women-focused VC funds—with leaders who themselves are women—tend to exhibit greater empathy toward women entrepreneurs. Notable examples include She Capital, founded by Anisha Singh; Kalaari Capital, led by Vani Kola; and Avaana Capital, founded by Anjali Bansal.

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Referencing data from Tracxn, Mehta highlighted that women-led startups in India received just nine percent of venture capital funding in 2024—a sharp drop from approximately 20 percent in 2023. All-women founding teams were especially impacted, securing just under two percent of the total deal value, highlighted a media report.

He explained, “While the number of women-led startups—across sectors such as FMCG—has been growing rapidly, there remains a perception gap within the investment community. That contributes to the insufficient funding of women-led ventures. I suspect this is a major reason why fewer women-led FMCG startups are scaling.”

Mehta added, “Crucially, founders must focus on unit economics. Many D2C and FMCG companies seeking early-stage funding find that their gross margins aren't strong enough, or that their return on advertising spend isn't adequate. That signals an unsustainable business.”

He explained that those are the businesses that stumble once venture capital dries up. Financial prudence, a clear long-term vision, disciplined (not reckless) growth, and strong unit economics—these are the four pillars he strongly advises women entrepreneurs to embrace.

Mehta further emphasized the importance of being financially prudent and scaling thoughtfully: “To survive, your expenditure must quickly fall below your earnings. The takeaway for any startup is to be judicious about scaling and to question: ‘How much marketing can you afford to burn?’