Take a dive into the startup report for 2020 which has, without question, been an eventful year for everyone – individuals, startups, corporates, institutions, and society at large. Especially in this year, startups and technologies have had a central role. Not least in the health sector, due to companies such as BioNtech, or in the sectors artificial intelligence and robotics.
So, how have founders, companies, and tech ecosystems tackled this year’s global challenges? How has the corona pandemic affected startups and what are the resulting perspectives for 2021? Where can we find hotspots and which technologies are affecting which sectors? What kind of role has the topic of “responsibility“? What has happened in startup financing?
In a two-part series we adress each of these questions, separately for Northrine-Westfalia, Germany, Europe and the World.
Let’s continue by looking at international developments:
STARTUP ECOSYSTEM EUROPE
The advantages of a close cooperation between tech ecosystems and political decision-makers are quite obvious. The Covid pandemic has only increased that focus. Technology played a key role in individuals and organizations being able to continue living and working in virtual spaces (Atomico 2020).
HOTSPOTS, SECTORS & TECHNOLOGIES
If you look at the most trend-heavy sectors, apart from health and business software, the European fintech sector is one of this year’s clear winners. In 2020, more capital has been raised in fintech than in any other vertical sector.
“The pandemic has given us a huge opportunity. Thanks to the strong focus on a remote work culture, we can be more inclusive than ever before. All of us were able to see the potential of multi-cultural teams working together around the globe and use that potential to shape our future” says Cordula Pfluege, the Europe Director of Future Females.
Looking at financing and investments, there are still discrepancies between men and women. The percentage of women was signifcantly lower. The same applied to the relative percentage (16%) of those who raised external capital:
In 2020, a total of 6 billion dollars were invested into purpose-driven European tech companies. The share of investments into climate-related startups has increased signifcantly to 11 billion dollars in the last five years (Atomico 2020).
Many European companies have continued to develop at an incredible pace. In November, Hopin set a record as the fastest growing European company of all time. It was valuated at one billion dollar, barely 17 months after its launch. Meanwhile, there are 115 companies with a valuation of over one billion dollars financed by VCs. Spotify and Adyen both reached a worth of more than 50 billion dollars.
In parallel to risk capital funding, state-sponsored programs offered financing to companies all over Europe, due to the challenges posed by the COVID-19 pandemic.
SaaS – SaaS Hooray – All in all, the European SaaS scene is still on the rise and was able to secure a record-worthy sum of investments in 2020. If you add the 12 billion dollars capital that were invested in 2020, the cumulated total sum of investments into European SaaS companies since 2016 amounts to 40 billion dollars.
STARTUP ECOSYSTEM GLOBALLY
Local and global challenges have rarely been as tightly interwoven a last year. The whole world is working on a COVID-19 vaccine at high pressure. The new conditions that have emerged in the midst of the pandemic put future-oriented technology and companies front and center. Collaboration and cooperation instead of solo operations and protectionism are the new normal that is necessary to tackle climate and health challenges.
Map of Corona Virus Innovations
HOTSPOTS, SECTORS & TECHNOLOGIES
There are the top startup hotspots worldwide (Startup Blink 2020)
TOP 5 COUNTRIES
TOP 10 CITIES
- San Francisco Bay (USA)
- New York (USA)
- London (United Kingdom)
- Boston Area (USA)
- Los Angeles Area (USA)
- Beijing (China)
- Tel Aviv Area (Israel)
- Berlin (Germany)
- Moscow (Russia)
- Shanghai (China)
The rise of deep tech has been going on now for several years. These subcategories exhibit the strongest growth: artificial intelligence & big data, advanced manufacturing & robotics, agtech & new foods and blockchain. Compared to the periods 2010 to 2011 and 2017 to 2018, the concentration of deep tech startups has doubled up to 2018. This developments indicated that especially RnD-oriented ecosystems have the unique opportunity to use the strength of their IPs for the growth of the whole startup ecosystem (GSER 2020).
The travel and tourism sector suffered the largest loss of revenue with a decrease of 70% since the beginning of the pandemic. The loss of interest in new cars has hit the automative industry hard and resulted in a decrease of revenue of 43%. The tech industry was better able to weather the storm. It has suffered financial setbacks but these were a far cry from the tourism and automotive experience. Social media & messaging startups suffered a decrease of revenue of 22%, gaming startups 19% and blockchain & crypto 14% (GSER 2020).
How Covid influenced the global startup scene
While startup Europe can look back at a resilient year, the US has returned to the path of growth and was able to reach record levels of investments. The total sum of invested capital in the US is with 141 billion dollars in 2020 almost five times more than investments in Europe. In Asia, investments decreased for the second year in a row, far below the 117 billions that were raised in 2018. The reason is the steady decrease of investments in privately-owned Chinese tech companies. In sum, the technology sector has gathered a remarkable momentum which is also apparent in the fact that investments in Latin America and Africa also reach record-worthy levels.
Our retrospective shows that 2020 has been an eventful year, in all strata of society. Solutions proposed by startup founders and companies played a key role in tackling global challenges. Despite crumbling revenues in core business activities, entrepreneurs showed strong adaptability and the resilience to find new ways to tackle the problems. So, it’s not surprising that incredible record-worthy rounds of financing heralded both the start of the new year and the start of the future.
Technology and artificial intelligence have increasingly shown themselves to be crisis-resistant and future-oriented.
- Atomico (2020): State of European Tech.
- McKinsey (2020): Diversity Wins: How Inclusion Matters.
- Startup Blink (2020): Startup Blink Ecosystem Report 2020.
- Startup Blink (2020): Coronavirus Innovation Map.
- Statista (2020): How Covid-19 Has Impacted The Global Startup Scene.
Startup Genome (2020): Global Startup Ecosystem Report.
B2B Startup Ecosystem
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