2021 Startup Predictions: Trends, Sectors, And Tech That Will Emerge

  • 20th Feb'21
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2020 was a year full of negatives, but few strong positives shined brighter than the sun. One such positive point of 2020 is the remarkable progress made in digital transformation all around the world.

People were stranded in their houses, making it inevitable for businesses to come up with digital technologies that ensure the smooth functioning of operations. Some businesses were already on their digital journey, while other businesses had to prepone their digital agenda and cave-in to the pressure.

Before the pandemic hit us all by surprise, there was some resistance from businesses and customers. But with science and technology’s great innovations and inventions, and entrepreneurship taking its position back in the economy, digitisation and automation are welcomed with open arms. 

 

Keeping that in mind, here are some of the biggest startup and Venture Capital trends that are expected to come forth in 2021.

 

1. Sustainable Investments

2020 was the year of enlightenment other than coronavirus. People had enough time to introspect and spread awareness about the critical issues bothering the world, one of which is climate change. 

One of the top trends of 2020 was ESG investing or Impact investing or Sustainable investing. 

According to a Morningstar article, “Investors continued to pour money into sustainable funds in the first three months of 2020, even as the coronavirus pandemic unfolded. Investors across the globe put $45.6 billion into funds focused on environmental, social, and governance (ESG) in the first quarter of the year. This compares with global outflows of $384.7 billion for the overall fund universe.”

 

 

A similar experience has been faced by startups. Venture capitalists have started to prefer companies that are socially responsible. The ones that are finding ways to come up with processes or products that are environmentally friendly, helping to solve a major issue at a macro level.

Investors will continue to invest in the green industry as the support from conscious customers and responsible investors will continue to grow.

 

2. Collaboration for Productivity

According to Interbrand and Statista, the most valuable brands worldwide as of 2021 are Apple, Amazon, Microsoft, and Google. These are arguably the businesses that will set the tech agenda for a long time if you add Salesforce.

Nowadays, it is not enough to just make a great product and sell. Businesses need to be creative enough to come up with a platform that builds a community where people interact, transact and learn from each other. And with a corona in the picture, remote or hybrid working has been the need of the hour, resulting in increasing demand for remote workplace software, affiliation, and productivity tools. 

Recently, Salesforce acquired Slack to which Salesforce Chairman and CEO Marc Benioff said on Tuesday, “This is a match made in heaven. Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world.”

Such investments will keep on showing up in 2021 to create a battlefield for leaders to work well.

 

3. Supply Chains Startups

2020 has put a lot of strain on several areas, one of which is supply chains. 

The companies were forced to prepone their plans so early as to adapt them on a day-by-day basis. This led to the company’s transformation journey in motion that wanted to reduce the disruption risks(influenced or created by geopolitical or economic instability), aiming to benefit from wage and cost convergence. This is an opportunity for startups and Venture Capitalists.

 

 

The latest developing technologies like Artificial Intelligence and Data Analytics cannot be maximised by the existing supply chain tools as they are comparatively slower.

Several supply chain startups with solutions that reduce waste, safeguard relationships between parties are expected to mark their presence in 2021.

 

4. Cross-border Payment Solutions for B2B

Our current global financial system is extremely poor, with banks not launching products in decades to central banks, making it awfully difficult for other tech giants to enter and sustain. Additionally, currency controls, compliance requirements, and poor security infrastructure add to the complication.

However, digital currencies like cryptocurrency and Bitcoin are becoming the new financial system without the traditional limitations. 

It is secure, prompt, and global. This facilitates them to be a medium for cross-border transactions. 

And with cryptocurrency getting support from leaders like Elon Musk, PayPal and Square, cryptocurrency can be the next candidate for enabling cross-country payments.

 

5. Bundling and Unbundling

Whenever there are innovations and the introduction of new technologies, businesses have been coming up with bundling and unbundling of related products and services for years. For instance, the Broadcasting industry unbundled in the 2000s when platforms like YouTube and MP3 formats came into the picture which is user-generated but has now bundled by vesting power into colossus like Netflix. 

Similarly, these cycles of bundling and unbundling are expected to continue and surprise us with their dynamic changes in 2021 in all areas from the financial industry to the entertainment industry.

 

6. The need for 5G

With everyone turning to digitisation and completely relying on it from offices to banks to entertainment, there is an urgent need to better speed. 

5G has been in talks for quite some time now. The demand and need for 5G networks have increased tremendously.

 

 

According to a Forbes article, “5G has been on the drawing board for some time, but it is now becoming a reality, with the roll-out of 5G networks underway around the world. A report from Ericsson predicted it will cover about 60% of the global population by 2026. The technology doesn’t just offer faster connection speeds and more capacity, but also ultra-low latency, which is transformative for IoT and edge computing, as well as anything which requires a real-time, instant connection, such as autonomous cars, robotic surgeons, as well as machine-to-machine communications, for example in drone fleets. It will also have a huge impact on AR and VR experiences in gaming, media, and entertainment and contribute towards ever more seamless remote working. Watch this space for numerous use-cases coming to light next year.”

 

7. Covid Sensations

Due to covid, several industries experienced a boom and were categorised as the “New Normal”. But once the lockdown restrictions are lifted, these sectors will go down as fast as they surged. For some industries, virtual experiences are not even close to equivalent to real experience. To give you a few names of such industries:

  • Virtual Events

  • Online Classes

  • Fitness

Huge investments were made into these sectors during the pandemic which might not pay off once the pandemic ends.

 

These are some of the trends that we expect for startups in 2021. This is a perfect time to start a company as we have the technology, and people are open to change. If you have a solution to a problem, this is your time to shine. Pen it down and Make it work. 

Venture capitalists are looking for opportunities to contribute towards real problems and bring change to the world by investing in brilliant ideas that will make a great business. 

 

Let us know your views in the comment section below.

 

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We, at OpenGrowth, are continually looking for trending startups in the ecosystem. If you want to know any further information about the startup ecosystem or have any mind-boggling ideas, do refer to the other blogs at OpenGrowth. If you have any suggestions, do let us know in the comment section below.

 

Sources/References:

*Note: The content published above was made in collaboration with our members.

About the author:

Ayushi Vanzara, OpenGrowth Content Team

Ayushi is currently pursuing Chartered Accountancy. No secrets there that she loves to read!  She believes words have the power of healing and is a medium that can convey like no other. She hopes to connect with people through her empathy, thoughtfulness, and by adding value to their lives.


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