One thing that did come from the year that Covid-19 struck in 2020 was the manner in which many people tried their hands at new things. Some took up baking. Others tried working from home.
And, across the world, over 10,000 entrepreneurial teams launched startups.
In fact, global startup funding 2020 was at 42% as against 2019 figures, according to a new study. So what kind of companies benefited from this investor confidence? And where in the world are they based?
BusinessFinancing.co.uk analyzed Crunchbase data & visualized how startup funding had changed from 2019 to 2020 through a series of animated cartograms. Businessfinancing.co.uk is a business finance & lending research & information Website publisher. The data reveals the difference in spending by country & industry.
Key findings
• Startups received 42% more funding in 2020 than they did in 2019
• 10,468 startups received venture capital (VC) funding, which is only 83 more than 2019
• The average funding round in 2020 raised $28m, a 57% increase on the 2019 average
• The top 3 countries by % growth in startup funding were Estonia (+1346%), Chile (1058.4%) &
Colombia (941.9%)
• The bottom 3 countries that saw their startups get less funding were Argentina (-91.2%), Lithuania (-
87.4%) and Nigeria (-74.4%)
• The US had the biggest investment rise dollar-for-dollar, raising $35,594,999,900 ($35.6bn or 79.0%)
more in 2020
• The big 3 industries for startup growth in 2020 were Science & Engineering (+329.7%), Biotech
(+187%), & Manufacturing (+113%) – all areas with a stake in the fight against Covid.
Key Findings In More Detail
With 10,468 startup companies getting VC funding in 2020, it’s only 83 companies more than were funded in 2019. Meaning, the average amount of funding each company received in the respective years has gone up dramatically. While in 2019, the average amount raised by a startup in one funding round was $17.8 million, in 2020 that figure was $28.0 – almost 57% higher.
By country
This growth in VC funding wasn’t equally distributed across the world. Out of 97 countries, for which the data was available, 65 did see their startups raise more funding in 2020 than the year before. While technically it was Morocco & Ethiopia that saw the greatest spike in funding, they had very few companies that got funded in the 1st place to suggest a broader trend.
Of countries that had at least 10 companies securing VC funding in 2020, here are the top countries by % growth in startup funding. Topping the list was Estonia – a country famous for its “access to Internet is a human right” policy & advancement in digitization of civic & government services. It registered a +1346% growth in funding & saw 46 companies being funded in 2020 vs 25 in 2019.
Together with Finland (+387%) & Austria (362%) they were the only European entrants on the top 10, which was largely dominated by developing economies in South America, Africa, & South Asia.
Curiously, companies in the developed economies such as Spain, & South Korea all saw their funding go down, which might have something to do with the fact that both were significantly affected by the coronavirus pandemic.
Putting the year-on-year growth to one side, startups in which countries secured the most funding in 2020?
The top three, rather unsurprisingly, were the US, China & the UK. That said, it’s worth pointing out that India outperformed countries like Germany & France with an impressive US $4.4 billion startup funding secured in 2020. Another noteworthy entrant is Israel. Putting the rather small country in 7th place, Israeli startups raised $3.1 billion in 2020.
By industry
Among industries that saw the greatest increase in VC funding received by startups that operate in them, the top 3 were Science and Engineering (+329.7%), Biotech (+187%), & Manufacturing (+113%). Curiously enough, Agriculture – an industry few associate with startups & VC – came in fourth with +112% growth in funding raised.
Artificial Intelligence – buzzworthy as it is – is more than a buzzword, as not only the AI startups were able to raise 82% more in 2020 than they did in 2019, there were also almost 150 more AI companies that were funded last year than the year before.
Looking at the most VC-funded industries in 2020, it’s rather unsurprising to see Software at the very top, as most startups are – one way or another – in the software business. However, the fact that Health Care & Biotech were in 2nd & 3rd might suggest a stronger interest in these industries on the backdrop of the global pandemic. Following these 2 industries were Data & Analytics & AI – 2 areas that are seeing heavy investment, as people’s lives shift significantly more Online & companies aiming to make sense of all the data they’re registering in the process.
The research & its key findings was made available to Whats New On The Net by NeoMam Studios.
Image credit: BusinessFinancing
