What Are the Startup Trends for 2020? A Market Analysis

The COVID-19 global pandemic has created a shift in how we work, while also giving rise to new opportunities for existing brands and new startups. Here’s what the market looks like in 2020 and where it’s heading.

Yisela Alvarez Trentini
5 min readOct 9, 2020


Image courtesy of Headway.

The startup economy was estimated at $3 trillion for 2019, and the consequences of the ongoing pandemic have been compared to that of a mass extinction event. According to a report from Startup Genome, 72% of the world’s startups saw their revenue fall since the beginning of the crisis, averaging a decline of 32%.

One of the trends that has suffered the most through the crisis has been the sharing economy, previously fueled by companies like Uber, Airbnb, and WeWork. The enthusiasm these giants had previously generated has faltered, as major slumps in consumer demand and venture capital have created unavoidable layoffs.

The travel and tourism sector has also seen a 70% fall in revenue, followed by the beauty and fashion sector with 59% and the automotive with a 43% decline. Even the tech sector suffered a financial impact, with social media startups decreasing by 22% and blockchain and crypto by 14%.

However, this hasn’t been the case for all startups. About 12% of them recorded significant growth. This includes the likes of Zoom and remote conferencing, which have experienced a boom during the COVID-19 crisis that is expected to continue long afterward.

What It Means to Work Remotely

Estimates suggest that during the pandemic, 62% of employed Americans worked from home. Many were surprised by how quickly and effectively they had adopted video conferencing technologies and other forms of digital collaboration.

While apps like Slack and Zoom soar, companies have seen that they can function not only the same, but more efficiently when their employees stay at home. For many people, this change has allowed them to skip the commute, have more family time, and be more productive.

According to new research, 34% of companies stated that working from home continues to positively impact employee productivity. Processes like lengthy meetings and regular status updates are proving to be less essential than once imagined. Customers have also reported that they are more satisfied with the help they’ve received during the last months.

In consequence, companies like Google, Facebook, and Twitter have decided to allow workers to continue working from home for many months — or even forever. The news was well-received: A whopping 98% of people said they would like to work remotely for the rest of their careers.

A model that can combine remote and on-site work has many benefits not just for employees, but also for companies. For example, businesses can now access new talent pools with fewer locational constraints and significantly reduce real estate costs.

However, a permanent change in this direction will require more tools than just Slack and Zoom. Many entrepreneurs will likely create startups to provide next-generation meeting and remote working services.

The Social Impact of COVID-19

COVID-19 has not only changed the way we work, but has also brought unprecedented human challenges. The pandemic has affected different groups unevenly. Low-income communities have suffered more from job loss, while the crisis has highlighted social and racial inequalities.

However, in times of crisis, people have come together and found new ways to help each other and their local communities.

When the pandemic began, and protective equipment was scarce, many people quickly jumped on crowdfunding campaigns. As early as March 2020, 1-mask-at-a-time, a GoFundMe founded by two stay-at-home moms, had raised thousands of dollars to provide gloves and masks to New York and New Jersey hospitals. In cities worldwide, we’ve seen people help their elderly neighbors get groceries and facilitate access to services and products.

The social impact of COVID-19 has provided people with opportunities to connect with and help each other. This has also created a fruitful space in which new apps and services focused on collaboration can be funded and developed.

During the first months of the pandemic, the app Nextdoor (a private network for neighbors) witnessed a 262% increase in conversations around ‘help’ on the platform. They decided to add a ‘Help Map’ feature, allowing users to mark their location and list what errands they can run or support they can give. By strengthening communities, Nextdoor managed to raise $170 million in its last funding round.

Revolutionary Initiatives

The year 2020 proves that companies can be successful even amidst a crisis of such a global scale, and several new trends have arisen from it.

Companies like DoorDash, GrubHub, and UberEats have gained customers during the pandemic. Fitness studios are now sending machinery and providing on-demand virtual classes, entertainment companies are accelerating virtual reality (VR) programming, and services like computer and smartphone repair are becoming remote.

Healthcare has also seen significant changes lately. Diagnostics testing can now occur in locations that were impossible to imagine, such as parking lots, open fields, and drive-throughs, while medical appointments can happen through the internet. With the help of artificial intelligence (AI) capabilities, companies can also search through existing drugs that could potentially be used to treat coronavirus. One candidate, for example, led to a clinical trial with US pharmaceutical giant Eli Lilly.

A particular challenge can prove especially interesting for innovative solutions. It’s been feared that working so hard in isolation could lead to burnout and loneliness in the long term. This creates the opportunity for a new trend to emerge, filling in the gaps left by the lack of in-person interaction. The trend could include, for example, remote conferences, gatherings, and workspaces using augmented and virtual reality, and apps that bring people closer with the aid of cloud computing, higher internet speeds, and AI.

The Startup Market After COVID

Crisis brings opportunities. Although the current period can be tough for entrepreneurs, investors are keeping a lookout for initiatives that take advantage of the new global scenario. The pandemic could be the birth of new, revolutionary industries and trends.

Leading organizations can guide the way, reimagining how work can be done and breaking from the inertia of the past by letting go of suboptimal old habits and systems. Not only can they reduce costs, but also provide a better collaborative experience where people can enjoy their work.

With a renewed interest in connection and a vaccine potentially around the corner, it’s hard not to be optimistic about the post-COVID future.

This article was originally published in Startup Savant (with a different featured image) on September 16, 2020. Link: https://startupsavant.com/news/startup-trends



Yisela Alvarez Trentini

Anthropologist & User Experience Designer. I write about science and technology. Robot whisperer. VR enthusiast. Gamer. @yisela_at www.yisela.com