In December 2019 the startup world had no idea what was about to hit it, VC’s were everywhere each in their own sector with their own interests. Providing the idea was sound and a market opportunity existed startups had a chance to raise funds for a wide cross-section of projects.

Since early 2020 and lockdowns occurring frequently and globally many sectors have been directly affected with business models that require a bricks and mortar presence, staff located in an office or retail outlet or are travel and entertainment related are becoming less attractive to investors. Only a few years ago the hot topic was the technology divide which would predictably see many occupations disappear and be replaced with AI, automation and other emerging skill sets. The pandemic has not only reinforced this movement but significantly reduced the timeframe over which some businesses would take to move to a digital format.

In an article written on June 23, 2020 by Itay Sagie co-founder of he stated that

“COVID-19 slashed the number of VC rounds in the U.S. by 44 percent”

Source: VCforU analysis based on Crunchbase data

Each sector has its own trend

Source: VCforU analysis based on Crunchbase data


The Impact on Startups

  • More than 70% of start-ups have had to terminate full-time employee contracts since the start of the COVID-19 pandemic;
  • Many entrepreneurial businesses have pivoted to meet new needs for goods or services borne out of the crisis;
  • The way entrepreneurial business models and approaches are affected by the pandemic will have an impact on how entrepreneurship is perceived as a job choice in the future.

Funding is critical for all startups and a recent survey indicated that 40% are under short term pressure when it comes to the availability of operating funds.

Changes in Workplace Culture

Startup culture used to be heavily reliant on person-to-person interaction where working in the same office space helped employees with collaborative thinking, as well as feeling like a part of a team. The pandemic changed that for many people employees were no longer allowed to be in direct contact, and it has significantly impacted team creativity. And brainstorming and whiteboard sessions are no longer spontaneous, and information can’t be shared through the grapevine as quickly as it could when everyone was in the office.

Now many employees work remotely, a trend that may be here to stay and for those who are used to working closely in teams team creativity became challenging with the physical distance between team members.

Ideas that may have originated from informal workplace chats are now not the norm and startups as well as established companies need to find ways to harness the collective intelligence of their workforce.

A New Horizon

Many companies have found ways to pivot their business model and take advantage of the situation. For a startup remaining lean and agile is important. Running a startup with low fixed costs and minimal overheads will assist in survival and growth.

With every black cloud there is a silver lining and for now that lies in the development of new technology in several fields:

  • Health related technology
  • Retail tech – moving online
  • Artificial Intelligence (AI) and Machine Learning
  • Robotic Process Automation (RPA)
  • Edge Computing
  • Quantum Computing
  • Virtual Reality and Augmented Reality
  • Blockchain
  • Internet of Things (IoT)
  • 5G technology
  • Cyber Security

The pandemic has created new opportunities for startups to develop products and services needed to survive in the post-pandemic world. The startup culture may have changed, but it has also forced many businesses to become even more creative to survive the volatile business world.


The COVID-19 pandemic has created a new landscape and startups can either view it as a threat or an opportunity.

The one truism that has survived time is that..

Innovation never sleeps and new ideas will evolve

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