Generalized Start Up Trends

The startup space in Silicon Valley is an ever changing landscape, full of innovation and excitement. Entrepreneurial ventures take place in many different forms, with different ideas, strategies, and industries. Over the last few years, the startup incubator community has revealed a variety of trends, many of which are worth noting for potential investors, entrepreneurs, or general individuals hoping to explore the space. Here are a couple key insights below:

1. Renewable energy in the startup space is still proving to be a strong sector. Specifically, 2023 saw close to $40B in VC investments into clean energy. In fact, global venture capital funding in clean energy startups has increased sixfold from 2019-2022, making it incredibly distinct as funding across industries fell by roughly 53%. Overall, sustainability startups are attracting this funding due to the increase in market demand for sustainable solutions, ESG policies, long-term viability, and the ability to be at the forefront of innovation and efficiency. EV adoption and greenhouse gas emission technologies also continue to gain traction in the sustainability community. 
2. Following the pandemic, HealthTech has also experienced a rise in VC funding, as people are working to prioritize health and well-being. The industry is expected to grow through 2024, and the median HealthTech deal valuations have already increased by 67% from 2021 to 2022. Additionally, most HealthTech companies have CEOs with prior industry experience, feeding into the funding patterns from late-stage startups who tend to receive more VC funding. Overall, the HealthTech sector has a strong intersection with academia, with the highest percent of CEOs involved in wellness and disease prevention and disease interception. This means the market holds incredible opportunities going forward to disrupt the healthcare industry, with recent innovations from institutions and companies alike promising substantial growth for appealing to new demographics and emerging verticals.
3. Other industries to be on the lookout for include EdTech, Robotics, and most importantly, AI-analytics solutions. These industries have all seen accelerated growth in the past few years, with AI in particular dominating the scene. Though AI can be treated as its own sector, a critical intersection point that makes AI relevant across disciplines is its broad applicability to anything — businesses, investors, and entrepreneurs alike should be on the lookout for broader AI-technologies, and their potential impact on pre-defined sectors.

Another miscellaneous finding is that startups in fast-growing industries frequently aren’t obtaining the resources they need. Entrepreneurship moves at a much faster rate than stabilized corporations, creating a mismatch in the availability of resources for entrepreneurial endeavors. Stakeholders in the startup space can consider how they can fill out these gaps where needed. 

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To learn more, check out the following resources:

https://www.mckinsey.com/industries/life-sciences/our-insights/healthtech-in-the-fast-lane-what-is-fueling-investor-excitement

https://fprimecapital.com/blog/robotics-has-the-time-finally-arrived-for-venture-capital 

https://news.crunchbase.com/clean-tech-and-energy/busiest-sustainability-investors-lowercarbon/ 

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Photo by StartupStockPhotos from Pixabay.