Running in the Family

How India's start-up women are fighting the system to create their own empires

"Have you discussed this with your husband?" "What if you start a family?" These questions are bad enough if you're a woman looking for a job - but funding for your tech start-up?

Rich venture capital firms looking to invest in India's start-up market have often put these questions to women entrepreneurs, according to industry insiders - regardless of whether they're an Ivy League graduate with experience working in some of the biggest global firms.

India's heavily-hyped and celebrated start-up sector is the fastest growing in the world but it has a poor record when it comes to gender diversity.

Of the nearly 4,400 start-ups, fewer than one in 10 were founded by women, according to industry body Nasscom. When it comes to attracting investment, the record is no better. In the first quarter of 2016, out of about 300 new companies that got investor funds, only 9 had solely women founders, according to YS Research.

Seize the opportunity

Nonetheless, there are women out there who see this disparity as an opportunity. Without any backing from the family business or an inheritance, and fighting against cultural biases, Indian women armed only with a big idea have gone ahead and got the funds to set up companies in such diverse fields as retail and pharma.

People look portrait of Inspiring women entrepreneurs of Delhi, on November 15. 2014.
Sonu Mehta | Hindustan Times | Getty Images

Others, seeing a market need to support these women, have set up companies to help female entrepreneurs access funding, tap government schemes and network.

"The start-up industry is male-dominated but, having said that, this is the best time to start a business in India," says Sucharita Eashwar who has set up Catalyst for Women Entrepreneurs - a one-stop shop for women to start and scale up their businesses.

While Eashwar aims to create 100 success stories of women-led businesses in the next five years, another woman, Ankita Vashistha, decided to break into a male bastion when she set up the 1 billion rupee ($15 million) Saha Fund that invests only in ventures run by women or which produce services and products for female consumers.

"Since there were so few women in the investment space, we were missing out on so many good deals," says Ankita Vashistha, CEO of Saha Fund. Her fund, which is less than one year old, has already made eight investments.

One such investment was in an online non-casual western wear brand for Indian women called Kaaryah, whose founder Nidhi Agarwal made 113 pitches before "Ankita came to our rescue," along with two other investors.

"She intuitively understood how real the need for well-fitting western wear was. We are lucky to have an investor who is also a woman," says Agarwal, who found it difficult to initially convince investors that her idea was tapping an unmet market. Today, almost two years later, Agarwal claims Kaaryah, which offers clothes in 18 sizes, is one of the few e-commerce sites in India that is profitable.

A struggle for funds

According to a survey conducted by VC fund Kalaari Capital, a lack of investor confidence topped the list of grievances among women entrepreneurs. "She [a woman entrepreneur] is not being taken seriously by investors….she has to constantly sell her competence," Vani Kola, who set up Kalaari that has $650 million in assets under management, told CNBC.

Scientist Shrilakshmi Desiraju has been running her own pharmaceutical company for the past five years, but when she sought investor help she was asked whether her husband was also part of the business. Luckily for her, her husband had joined her company recently and she hopes to close a deal with VCs soon.

The reluctance of investors to back women entrepreneurs is evident from the fact that out of the $9 billion invested by individual investors and venture capital funds in start-ups in 2015, only 5-6 percent went to women-led companies, says Saha Fund's Vashistha.

Neha Motwani, who started, an aggregator of fitness services, told CNBC, "I wouldn't say it [getting investors] is the biggest obstacle but certainly something very challenging and time consuming." Motwani met about 15 investors over a period of six to eight months before Saha invested in her fund.

The search for role models

An argument often used in the investment industry is that women can't create companies of scale. According to Eashwar 90 percent of all women led companies are in the small to medium enterprise space and only 5 percent among them have a turnover of over 20 million rupees ($300,000). Through her organisation Eashwar hopes to encourage women to think big and inspire them to take risks.

For this to happen, there needs to be tech industry role models other than the "Bansal brothers" - Sachin and Binny Bansal, the unrelated founders of India's largest online retailer Flipkart - for women to look up to, according to Catalyst for Women Entrepreneurs' Eashwar.

Efforts to inspire women entrepreneurs are on. A recent initiative called Start-Up Girls organised by Kaalari got together 150 women entrepreneurs and some women in leadership roles in tech companies to crowd learn from each other in the city of Bangalore.

"It was a baby step, but we need to start engaging the empowered women, and then work backwards from there," Kola said, who plans to hold this event twice a year.

Women like Motwani, Agarwal and Desiraju are all ambitious, thinking big and fighting stereotypes as they attempt to make companies of scale. "I don't think a man would have managed my business Fitternity any differently," says Motwani.

Agarwal of Karyaah wants to make her brand the largest western wear brand globally, while Desiraju who has already taken on pharma giants with her four prescription drugs wants "women entrepreneurship" to be meaningful and not just a "buzz word".

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