The Startup Market and the Pandemic: What’s Changed and Where to Invest Now?

Three Big Changes That Are Influencing the Startup Market

The pandemic certainly brought about many changes. But I’ll focus on three I think are most important for investors and startups.

1. Consumer Needs Are Changing

Here are four ways in which our lives and needs have changed:

  • We’re more health-aware. We became more aware of the things threatening our health. With more awareness came more fear of the possible consequences of not taking care of our health.
  • We’re more home-oriented. Our homes had to take on new roles. They became substitutes for coffee shops, cinemas, restaurants, and more.
  • We’re more technology-oriented. We buy groceries on Amazon. We catch up with our aunts and uncles on Zoom. We even work from home thanks to our computers and the all-mighty Internet.

2. New Businesses Are Emerging More Rapidly than Ever

Studies showed that a lot of startups started growing rapidly during the pandemic. But that’s not all. More businesses are being launched now than at any point in the past 10 years:

“In Q3 2020, there were about 1.5 million new business applications. That’s a 77% increase from Q2 and more than double any quarterly report from 2004 to 2017.”

Jack Tai, CEO & Co-Founder of OneClass

There are two main reasons why.

3. E-Commerce Is Flourishing

More goods and services are bought online. One reason is that people want to stay at home more. Another reason is that there are simply more businesses online.

Where Should You Invest Now?

I’ll list here four niches that are great investments. While the niches are profitable, a startup doesn’t have to be. It’s up to you to identify the startups that are likely to succeed.

1. AI Startups

AI startups have been driving huge investments in the past few years. They’ll continue to grow and thrive during the pandemic, and probably later too.

Source: DnaNudge

Source: Exploding Topics

2. Food and Beverage Startups

Not all food and beverage startups will be successful. I think three types have the most potential:

  • startups facilitating supplies for retail outlets
  • startups producing synthetic food and/or using sustainable resources

Source: Crunchbase

3. Blockchain Startups

Everyone loves crypto. But, relatively recently, people started loving NFT too.

4. Health Startups

With consumers being more health-focused than ever, it makes sense that health startups are good investments. Besides that, a lot of health startups combine several trends, like blockchain and AI, making them almost bulletproof investments.

Source: PitchBook

Originally written by me on Medium. Main photo by Claudio Schwarz | @purzlbaum on Unsplash

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