What will be the startups of the future? The business magazine has prepared an overview of the 11 most important innovative startup trends for 2023-2026. From biotech, SaaS, Agritech innovation, and the sharing economy, to no code, these are the main trends in the start-up economy that will progress in the coming years.
The main trends of innovative startups of the future, forecast until 2026:
A new wave of biotech startups
The world’s biotech industry is already valued at a whopping $414 billion. And that figure could rise as DNA testing becomes more widespread and advanced. For example, in the last decade, pedigree tests have appeared that allow you to find out about your ancestors. But soon our DNA may inform us of our future actions.
This combined technology allows you to receive nutritional advice tailored specifically to your individual DNA.
And DNA testing can go far beyond telling you what to eat for breakfast. New products in this category may use artificial intelligence to determine optimal exercise.
Or skincare products tailored to your unique DNA imprint. And in the future, we will not just adapt to our DNA. Most likely, we will change our DNA to fit our current goals and lifestyle.
Robotic Process Automation (RPA)
Closely related to AI and ML, RPA automates business processes such as application interpretation, transaction processing, data processing, and even email responses. The main benefit of RPA is that it automates the repetitive tasks that employees used to do, freeing them up so they can focus on more creative and productive tasks.
Automating robotic processes reduces costs, increases profitability, reduces time spent on time-consuming tasks, and reduces error rates.
Digital innovation spreads to Africa
Startups and venture capital money are starting to come to Africa. Once considered too risky, the untapped potential of the African continent is too great for many startups to ignore today.
According to Partech analytics, earlier in 2020, the volume of venture investments in Africa amounted to $2 billion, but the flow of investments will grow several times in the coming years.
For example, Kenyan startup Twiga Foods is building a food distribution network and infrastructure, as well as technologies such as a mobile app for merchandising and inventory tracking.
This Goldman-backed startup currently connects 17,000 farmers in Kenya with 35,000 merchants. And the number of interested participants is growing rapidly. At the same time, Twiga reduced typical post-harvest losses from an average of 30% to 4%.
This is not the first African startup to receive high-profile funding and attention.
For example, AI-powered fintech startup Jumo is gaining momentum in South Africa. And pan-African e-commerce company Jumia is now even listed on the New York Stock Exchange.
The continuation of such victories on the African continent opens the door for new startups backed by venture capitalists.
Sustainable finance goes mainstream
Sustainable finance is the practice of investing with environmental and social returns in mind. This concept is becoming more and more popular (Bloomberg estimates that this area is valued at $30 billion). And along with this new start-up trend, both user searches and investments aimed at the sustainable development of green and eco-startups in the world are growing.
As investors expand their definition of return on investment (ROI), green startups will look to prove more than just their earnings trajectory. Sustainable startups are increasingly proving a net positive social and environmental impact.
Food startup Beyond Meat, for example, became popular for its plant-based burger that looks, cooks, and tastes like beef.
Proven business models enter new geographic markets
Startups like Uber Eats, GrubHub, and DoorDash have already established themselves as a lucrative food delivery app business model. It’s the same with the taxi-ordering apps Uber and Lyft, which have shaken up the traditional taxi industry a lot.
And now there is a race funded by venture capital to capture different regions in these business spaces. New players are settling in other parts of the world using the same proven business models.
A particularly interesting example is Glovo, a delivery startup. This $1.2 billion Spanish start-up initially looks like any other food delivery app. Glovo is a little bit unique in that it delivers not just food, but everything: smartphone accessories, pet food, flowers, etc. The startup operates throughout Europe, but they are also expanding into both South America and North Africa. .
The boom of startups without code (“no code” and “low-code”)
Startup companies like Zapier are using “no code” technology to make it easy for everyone to create digital products. Another no-code platform, Webflow, has raised $334.9 million in funding, according to Crunchbase. These platforms allow you to create “no-code” or “low-code” custom apps and websites.
“Low-code” technology refers to web and mobile development using a drag-and-drop interface rather than programming languages and raw code. “Low-code” requires much less or even zero coding knowledge. And even experienced web developers often use no-code solutions as a super-fast way to build applications. Or quickly prototype business ideas.
The no-code movement creates many tech start-ups. For example, the no-code startup Makerpad has achieved rapid success as a learning platform and community for no-code entrepreneurs.
You can expect some of the biggest tech startups of 2023-2025 to start as minimum viable products (MVPs) with no code.
Sharing Economy covers new sectors
Over the past 10 years, companies have realized that they can benefit from assets that are gathering dust somewhere. This has led to one of the biggest startup trends of the last decade: the sharing economy.
For example, Airbnb has allowed homeowners to rent out their homes while they are away to generate significant additional income. This uprooted the traditional hotel industry as Airbnb could be a cheaper and more comfortable option for many travelers.
In the next decade, the concept of the sharing economy will be fully realized as start-ups try to spread their influence to other sectors.
A new startup called Cloud Kitchens, founded by former Uber CEO Travis Kalanick is now pioneering the concept of shared kitchen spaces designed for delivery-only restaurants.
These flexible kitchens allow up-and-coming food service businesses in prime locations to capitalize on the new food delivery megatrend, but at a much lower investment.
As a result of this start-up trend, delivery-only restaurants are springing up in many major cities.
Agile development gets easier and smarter
Agile development is a software development methodology that encourages adaptive and agile planning. It has become widespread and has become a common practice in many technology startups. However, not without drawbacks.
HBR analytics reports that a significant proportion of agile developers find this approach to be stressful and stressful. That’s why startups are looking to make this process easier with methods and tools that eliminate friction and help apply best practices.
This is where the Scaled Agile Framework comes into play. Adapted from traditional agile principles, the model is designed with company size in mind. In practice, this means a lot more guidance on how to work effectively in an environment that includes more than one command.
Some startups aren’t big enough to bother with agile at scale.
But the process of ordering is still going on. Agile coaches are project managers who can work with large companies or individual teams.
In any case, their role is to improve agile practices where possible. Startups may choose an agile coach at an early stage to ensure that effective agile practices are properly embedded in the work culture. In the future, we may also see more startups turning to agile automation.
Better service and convenience will flourish in consumer markets
As the world’s leading marketplaces set the standard for delivery efficiency and customer service, consumers now expect the best from all other startup companies. Convenience and speed are becoming increasingly important for customers today. Startups that build on this trend and prioritize customer convenience will thrive.
A great example of this is the startup company Lensabl. This digital-focused startup provides online prescription lens replacement services. Owler estimates their annual income is $12.5 million.
You get your vision tested from the comfort of your home with their online eye exam. Their service model also allows you to send in and fit any frames you have. This allows customers to keep their current favorite frames. Or choose any other brand without a prescription.
Startups disrupting traditional markets in this way, with convenience as their main value proposition, are on the rise. Especially since this kind of service has the potential to attract enthusiastic fans who spread the product by word of mouth (mostly on social media).
AgTech innovations will progress and develop
Agricultural technologies and Agrotechnological innovations are needed as societies move beyond sustainable farming. Sustainable agriculture aims to maintain the status quo of topsoil and ecological systems (which are often already degraded).
However, regenerative agriculture is on the agenda.
This means improving the soil and reversing human impact on the environment through a self-sustaining process. AgTech Innovations – Agrotech innovations can drive these changes, such as IoT soil sensors that measure aeration and respiration.
Or software that helps farms manage their supply chain. For example, Antelliq, a digital livestock startup, received $2.4 billion. Their smart tag product category makes it easier for farmers to track and control cows.
Thus, large investments are possible for those startups that will take advantage of this trend and create Agtech solutions.
Startups focus on personalization
According to Deloitte analytics, offering personalized products or services can increase a company’s sales by 10% or more. Even if the price of a personalized product is higher than the standard options.
For example, Nike’s “Nike By You” (formerly Nike ID) product personalization service costs 30-50% more than the regular choice. But this led to an increase in repeat purchases for the shoe manufacturer.
The Nike Makers’ Experience provides the same personalization but in person. It uses artificial intelligence, augmented reality, and image projection to show shoppers what their new shoes will look like in real-time. The shoes are then made on-site in about 90 minutes.
Of course, personalized products are not new. In the 1980s and 1990s, Dell pioneered the direct selling of personal computers. But the explosive development of the DTC business model has made product personalization much more commonplace. Since it is difficult for customers to purchase custom-made products without ordering them directly from the manufacturer.
Rapid manufacturing technologies such as 3D printing are another key aspect of product personalization. Once upon a time, 3D printing was a powerful but costly research tool. But over the past 15 years, it has become both an accessible hobby for garage tinkerers and an increasingly transformative force for the $12 trillion manufacturing industry.
Combining the OTC model with 3D printing allows companies to offer an almost infinite number of product personalization options. Some interesting examples of startups focusing on personalization:
- FitMyFoot startup company that sells 3D-printed custom insoles and sandals. FitMyFoot customers use the app and pen and paper to trace their feet and place an order. Within a few weeks, they will receive a unique pair of insoles or sandals. Since its founding (under the name Wiivv) in 2014, the sales of this once-niche company have doubled every year. Now they receive about 100,000 annual orders.
- Startup ActivArmor produces fully custom 3D-printed molds and splints.
The company was founded in 2016 and raised $1.5 million in investments. - Companies UNYQ and Arthesis offer “fashionable” 3D-printed fairings (covers) for prostheses. UNYQ raised $1.6 million on Fundable in 2014.
- And other existing e-commerce applications can offer product personalization through the Shapeways 3D printing service. The company has a “CustomMaker” product personalization mechanism that allows end customers to see and customize any product before ordering.
But 3D printing is not the only way to personalize products. L’Oreal launches Color&Co personalized hair color brand. Clients can take a “color test” or get a free 10-minute video consultation to find the right shade for their hair. The dye kit will then be delivered to their home.
Taking a cue from automotive companies, bike makers Trek and Mission offer custom-built (and custom-painted) bikes. And Blue Nile (the world’s largest online jewelry store) offers a “Build Your Own Jewelry” option that allows customers to endlessly customize rings, necklaces, earrings, and more before ordering.
Signature dog toy brand BarkBox says the personalization process is key to its success. The company uses a quiz-based customer registration process to personalize each customer’s box. BarkBox reportedly ships around 120,000 different box variations every month. Out of one million boxes, this means that each box variant is only sent to 8 dogs.
Personalization in the fashion industry has also skyrocketed in personalization. Son of a Tailor sells custom-made shirts. This Danish startup was launched in 2014 with $300,000 in seed funding.
B2B products are also made to order. Elevator manufacturer Aritco provides an on-site configurator allowing customers to select the design, size, color, and many other details.
Sticker Mule company prints stickers, labels, magnets, and pins with company logos. And startup Teespring allows creators to design and produce phone cases, canvas prints, and more for sale on the site. And all this on demand.
This trend also extends beyond products. 80% of consumers are more likely to buy from brands that provide them with a personalized experience. This has given rise to website personalization platforms. These tools personalize sites based on visitor activity, geography, or past behavior.
Growth of high-tech startups in the welfare technology market
Assets under management in the WealthTech market reached $1.5 trillion in 2019 and are expected to grow to more than $6 trillion in 2023. And in 2020, stock trading startup Robinhood reached a valuation of $11.2 billion after doubling revenue from the first to the second quarter. Robinhood is not the only automated investment platform.
Similar brokerage companies of a new type include. Webull, which was founded in 2016 and is actively recruiting users through a giveaway during registration. Israeli company eToro was last valued at $8.8 billion in 2022. SoFi Invest, a division of the $4.8 billion fintech company SoFi.
Square’s Cash App also allows you to invest in the stock market (as well as buy cryptocurrency). The Cash App helped Square achieve a $37 billion market cap.
While the older company Interactive Brokers (publicly traded, market cap over $35 billion) is moving ahead with similar features for both retail investors and RIAs (registered investment advisers). However, these fast-growing services are attracting negative attention as well. Robinhood, in particular, has come under fire from lawmakers and users.
It was also reported that the company is under investigation by the U.S. Securities and Exchange Commission for not disclosing information about its “pay-per-order flow” practices. And in early 2021, Robinhood was involved in a dispute that led to lawsuits. But one thing is for sure: Robinhood (and other companies) are doing their part to keep the industry going.
As a competition, they have already prompted brokerage firms such as E*Trade, Schwab, and Ameritrade to cancel their trading fees. But frictionless trading is not the only approach in this area. Other fintech money management startups are taking a different angle, focusing less on amateur traders than on passive investors.
Key features of robo-advisers like Wealthfront and Betterment include automatic tax loss cleanup and rebalancing. However, robo-advisers are not growing in WealthTech at the same breakneck pace as Robinhood and their ilk.
Apart from these, another part of the wealthtech meta-trend is services that make it easy to invest in alternative asset classes. Masterworks allow people to invest in “shares” of paintings by artists such as Claude Monet and Andy Warhol. According to the company, this asset class has outperformed the S&P 500 over the past 20 years.
The Pipe allows SaaS business owners to advance future recurring earnings by getting funding from investors without diluting their equity. And LendingClub and Funding Circle provide peer-to-peer personal and business loans.
Outcome
If you’re an entrepreneur, these trends should help you choose the industry you want to dive into. And if you’re a venture capitalist, following these trends will help increase your chances of finding the next unicorn startup.
In any case, new technologies continue to cause massive changes in the startup world.