Startups and COVID-19: Keeping Up with the Trends
As the coronavirus pandemic continues disrupting lives and creating havoc all over the world, everyone would expect that the business sector would take a direct hit and everything would soon come to a screeching halt. While this prediction proved to be fairly accurate in the quarter immediately following the coronavirus outbreak, the country is now witnessing an unprecedented growth in the business sector as new startups start to emerge to fill in the gaps and opportunities that were exposed by the pandemic.
Here’s some evidence that proves the validity of this claim.
- Venture capital funding left an impressive record during the third quarter as US-based startups raised close to $36.5 billion in investments. This figure represents a seven-quarter high and is 22% higher compared to the investments raised by startups in the same quarter last year.
- Moreover, the number of quarterly mega-rounds also reached a new high as 88 US-based companies each raised investments worth $100 million or more during the quarter.
How Will This Trend Affect the Economy?
While the pandemic forced most businesses to temporarily limit or shut down their operations, it also opened numerous opportunities for those who are quick to recognize voids that need to be filled and are creative enough to find and innovate viable solutions to existing problems. As history taught us, opportunities arise during times of crisis. This happened several times before and it’s happening all over again.
According to the US Census Bureau, the number of business applications significantly increased this year, particularly during the third quarter. And since the majority of these businesses are high-propensity, meaning they tend to employ more people, business leaders, economists, and policymakers take this as welcome news.
Which Sectors Top the List?
Several sectors are expected to flourish during and after the pandemic. There is a need for innovations that will specifically and efficiently address the issues the world is facing right now and in the near future.
Aside from the industries that aim to find solutions to fight the pandemic (e.g. contact tracing technology solutions, tools that facilitate virtual visits for people in quarantine, etc.), which sectors are envisioned to flourish most in the post-COVID world? Here are some of them.
- E-Commerce. The industry was already booming even before the pandemic and the recent developments further accelerated its popularity by about five years.
- Health and wellness. The pandemic made us all realize the importance of self-care, resulting in the widespread acceptance and adoption of online health and wellness technologies (e.g. telehealth technology, remote diagnostics, symptom tracking innovations, online fitness, remote mental healthcare and stress-coping solutions, etc.).
- The increasing demand for contactless solutions drove the need for payment and spending management platforms and cashback apps, to name a few.
- While some educational institutions have their digital infrastructure in place, they are slow to adapt to the technology, until the pandemic comes along. Now, education technology solutions are continuously being developed and used in schools and universities not only to facilitate learning but to perform other functions as well (e.g. remote employee onboarding).
- The travel industry may have taken a major blow but some startups are already preparing solutions to ensure people’s safety while traveling in a post-COVID 19 world. People love to travel so there’s no doubt that such technologies will be greatly appreciated.
Data also indicates that the startup trend is continuing through the fourth quarter, as weekly business applications in states like Georgia, Louisiana, Maryland, Michigan, and Mississippi remain impressively high.