Startup Statistics and Trends During Covid-19

Startup Statistics and Trends During Covid-19

2020. The year began as any other year, full of promise and optimistic projections for startup founders. There were deals to be made, funds to be raised, and markets to be disrupted. Suddenly everything changed. The way we interact, work, and live changed in a matter of weeks. Many industries suffered but the startup ecosystem kept buzzing. Startup statistics and trends during Covid-19 were unprecedented.

Digital transformation, virtual interactions and service automation kept many sectors afloat. Pioneers, who were ahead of the curve in technology adoption, grew better than ever.

Ultimately, those who persevered, came out on top and continue to deliver true value to their customers even in the ‘new normal’.

Here is a look at how startups fared during 2020 across key sectors and what’s in store for them in 2021.

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1. How Startups Fared in 2020

  • The global investment deal value went down by 12% and the deal count also decreased by 30%, but the fundraising efforts remained strong with more than $348.5B raised by the end of Q3, 2020, on par with previous years. (McKinsey)
  • Despite a sharp contraction in B2B Tech deal count with only 3334 deals closed by the end of the third quarter of 2020, deal value managed to reach $52.5B. (NVCA Pitchbook)
  • B2C Tech performed in a similar fashion with 1863 deals achieving $32.1B in deal value by the end of Q3,2020. (NVCA Pitchbook)
  • FinTech sector fared well during the pandemic with a jump of 27% in digital transactions and millions of users adopting online banking solutions for the first time.
  • HealthTech and Pharma attracted a total funding of $44.1B with a 50% increase in telemedicine and telehealth services.
  • EdTech also fared positively, as more than 1.6 billion people were forced to access education online when education institutions globally shut down.
  • Ecommerce also saw increased activity, reaching 33% market penetration, with increased market preference for contactless transactions during the pandemic.
  • Micromobility sector shrank considerably in 2020 as major cities shut down for months, but with major acquisitions and mergers underway, the sector is expected to bounce back.
  • Real Estate was also affected negatively, as millions migrated to smaller cities during the lockdown. Although major players in the sector underwent cost-cutting, spending on necessary digital transformation increased.
  • With increased adoption of AI and Machine learning in product development and service operations optimization, startups in the sector raised $27.6B in 2020.

2. Key Insights For 2021

  • A new dawn of digitization – companies are 3x more likely to conduct 8 in 10 customer transactions digitally. (McKinsey)
  • Despite steep budget cuts across the board due to Covid-19 induced economic recession, tech spending increased by 6.9% as organizations were forced to expedite their digital transformation. (Gartner)
  • Green and sustainable growth opportunities are attracting increasing VC interest. $2 trillion worth of investments are pledged in the U.S. towards clean power, building, and transportation.
  • FinTech, EdTech, HealthTech and e-commerce sectors are expected to exceed pre-Covid growth projections, with billions of users moving towards virtual, contactless and digital transactions.
  • Private as well as shared micromobility are expected to grow at 9% and 12% respectively, with major players expected to turn profitable.
  • Expected to grow at a CAGR of 43%, AI and Machine Learning sector will have a far reaching impact on all other sectors undergoing digital transformation.

3. Industry-wide Statistics

FinTech Startup Statistics and Trends

  • The adoption of digital banking accelerated during the pandemic, with over 44% of 18-34-year-olds market segment adopting online banking solutions in 2020 for the first time.
  • 2020 also saw a 27% jump in digital and contactless payments over 2019.
  • Cryptocurrency also saw a resurgence in 2020, a trend that many industry experts predict will continue in 2021.
  • The application of AI in FinTech is expected to grow at a CAGR of 23.7% and reach up to $22.6B by 2025.

Real Estate Startup Statistics and Trends

  • The sector has 2200+ startups and a total of $25B in funding, nearly $8.9B of which was raised in 2019. (Tracxn)
  • Although there was investment pullback in real estate tech during the pandemic, quarterly trends look optimistic and the sector is expected to return to its growth trajectory. (CB insights)
  • The demand for cloud-based collaboration and productivity tools increased among commercial real estate companies, as the majority of their work-force went remote. (Deloitte)
  • Virtual leasing, virtual touring, and virtual resident engagement gained popularity and will continue to grow as the sector is forced to undergo digital transformation and revisit old policies. (Forbes)
  • Y Combinator, Frontier Digital Ventures, 500 Startups, FJ Labs, and Kima ventures continue to remain the most active investors in the real estate sector. (Tracxn)

HealthTech Startup Statistics and Trends

  • AI will see an increased application in drug discovery and development. (Forbes)
  • The pandemic saw a 50% jump in telehealth and telemedicine visits, with over a billion virtual care visits expected in the U.S. in early 2021. (
  • As of Q3 of 2020, Life Science startups managed to raise $24.6B, more than 31% of which was angel and seed capital. Although the deal count dipped from 2019, the total deal value increased showing sustained VC interest in the sector. (NVCA Pitchbook)
  • Pharma and Biotech startups attracted $19.5B of funding by the end of Q3, 2020. Given the demand for Covid-19 vaccine and rising health concerns globally, this is a trend that is expected to continue. (NVCA Pitchbook)
  • Startups in residential re-selling solutions (Opendoor), online brokering (FlyHomes, EasyKnock, Reali, Homie), mobile-based home management (Centriq), and coliving spaces (Bungalow, Starcity) attracted investors’ interest and funding. (Tracxn)
  • 65 major exits happened in the Pharma and Biotech startup spaces by the end of Q3, 2020. (NVCA Pitchbook)

EdTech Startup Statistics and Trends

  • Nearly 1.6 billion people were affected globally by the closure of educational institutions during the pandemic. This led to unprecedented growth in the market for online learning platforms, which is expected to continue in 2021. (
  • US EdTech startups attracted $803M in funding in the first half of 2020 and prospects remain optimistic with the global EdTech market expected to reach $181.3B by 2025. (Leadsquared)
  • Education CRM, Learning Management System, Student Information System, Augmented Reality, and Virtual Reality are expected to grow at the fastest rate. The total market size for these technologies is projected to grow beyond $122B by 2025.
  • Freemium business model continues to remain the most prominent in EdTech, where users get access to a limited free trial period before paying for the services.

Micromobility Startup Statistics and Trends

  • The industry experienced the exit of smaller, unprofitable players due to the pandemic and may shrink further, but major acquisitions and mergers along with a continued market preference for alternatives to crowded public transport can mean future growth for the micromobility industry. (CB insights)
  • About 60% of all trips in the U.S. are between 0-5 miles, falling in the micromobility category and providing an excellent opportunity for bike or scooter usage. (CB insights)
  • The US micromobility market is expected to achieve a valuation between $200B- $300B by 2030. (CB insights)
  • Since 2015, micromobility startups, all over the world, have attracted an investment of $5.7B. (CB insights)
  • A 9% growth is expected in the private micromobility market, with an increasing preference for e-bikes and e-scooters. (
  • Shared micromobility is also expected to see a growth of 12%, with startups like Voi, Skip, Lime, Dott, and Tier leading the way.
  • Lime received a $170M investment from Uber in May 2020, along with a merger of Uber’s micro-mobility arm, Jump, with Lime. Uber is also projected to buy Lime between 2022-2024, along with planned expansion into alternate modalities such as e-scooters. (CB insights)
  • Ride-hailing giant, Lyft, has emerged as the largest bike-sharing service in North America, owning majority stakes in Citi Bike, Divvy, Ford GoBike, and Bluebikes. (CB insights)

Ecommerce Startup Statistics and Trends

  • Ecommerce penetration reached a whopping 33% by the mid of 2020, against a forecast of 24% by 2024! (McKinsey)
  • Ecommerce site traffic in June 2020 surpassed the festive peaks of the previous year. 22 billion visitors shopped online, across various product categories. (Statista)
  • Funding in the sector skyrocketed during the pandemic, as more and more consumers moved online for a safe shopping experience. More than $2.5B in VC funding was raised during the third quarter of 2020. (Statista)
  • Techstars and VentureOut are among the most active investors in Ecommerce sector, with Y Combinator and 500 Startups also remaining aggressive in deal activity. (Tracxn)
  • Major business models that attracted funding in Ecommerce during 2020 and continue to drive investors’ interest include automation solutions, campaign management service providers, end-to-end logistics, cart management and multi-channel integration services.

AI and Machine Learning Startup Statistics and Trends

  • AI is increasingly getting considered as a value generation tool, with AI leaders attributing more than 20% of their organization’s earnings to AI-enabled processes. (McKinsey)
  • High-tech and telecom sectors led the way for AI adoption, with 50% of organizations having embedded AI in at least one function and 30% having even adopted deep-learning. (McKinsey)
  • Functions that saw the highest AI adoption were product development for new AI-based enhancements and service-operations optimizations. Nearly 24% of the organizations embedded AI solutions in these functions, and expect to double this investment in 2021. (McKinsey)
  • Funding of $27.6 billion was received by AI and Machine Learning based startups in 2020, of which 62% were seed rounds. (Crunchbase)
  • The average funding received by AI and Machine Learning startups was around $29.8 million.
  • Growing at a CAGR of 43%, the global AI and Machine Learning market is expected to grow from $7.3B in 2020 to $30.6B in 2024. 
  • $82B was invested in all AI categories. $28.5B of which went to Machine Learning applications. (Statista)
  • The market for AI-related semiconductors is expected to grow to more than $30B in revenue by 2022. (PWC)

Supply chain & Logistics Startup Statistics and Trends

  • The Supply chain and logistics sectors have more than 9000 startups, around 2000 of which have received a funding of $60B so far. (Tracxn)
  • Preference for contactless delivery and operations saw an increase of 20% during Covid-19, a trend that is expected to grow in the new normal. (
  • Digital freight forwarding solutions offering automated booking and increased inventory visibility started gaining increased investor interest in 2020. (CB insights)
  • Autonomous last-mile delivery also gained traction during the pandemic with accelerated development of drone delivery, on-road, and sidewalk robot delivery solutions. (CB insights)
  • Sequoia Capital, Techstars, Y Combinator, Plug and Play Tech Center, and 500 Startups are the biggest investors in the supply chain and logistics space. (Tracxn)
  • Unicorns in the sector that are aggressively expanding include on-demand food delivery startup, Doordash, online freight forwarder, Flexport, and, which is a provider of self-driving delivery vehicles for local commerce. (Tracxn)
  • Despite the disruption caused by the pandemic, the supply chain market is projected to reach $19B in revenue by 2021.
  • Blockchain tech is finding extensive adoption in the sector for applications such as fraud/theft detection, smart contract execution, fleet tracking, security, visibility, purchase process automation, and cost management.



The year that is carrying expectations of billions around the world.

And if economic performance data is any indicator, 2021 is expected to deliver.

Market sentiment is positive and investors, as well as consumers, are warming up to the possibilities of the ‘new normal’.

Once again, the startup ecosystem is vibrant. There are deals to be made, funds to be raised, markets to be disrupted and a virus to be defeated.

The most successful startup founders today will think about the long-term impact of their solutions but focus on capturing today’s quickly rising startup opportunities. Most of the companies that experienced overnight exponential growth in 2020 had been slowly improving their solutions for years. When the pandemic hit, they were ready to grow and adjust rapidly. Tomorrow’s success stories will include today’s flexible, rapidly adjusting companies with a long-term vision for the future of their business years from now.

In sum, build and release fast but remember, your overnight success can take a few years. Be patient, most of your competitors will give up.

Picture of Abdo Riani

Abdo Riani

Founder & CEO of VisionX Partners

VisionX Partners is a startup development company that works with entrepreneurs to start, build, market and run their startup from the ground up through product development and design, marketing, and a dedicated operation and growth team.

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