The Covid-19 pandemic has transformed the global economy, accelerating digital transformation trends and disrupting traditional industries. According to private markets investment platform Titanbay, these trends have helped provide an even more fertile backdrop for an already booming global entrepreneurial industry, with tech startups reshaping many aspects of our lives.
Part of that boom is down to the fact that entrepreneurship is considered less risky than in the past. As many as 70% of Americans believe it is a good career option, according to Global Entrepreneurship Monitor’s 2020/21 US report . The pandemic has done little to dampen those entrepreneurial spirits. The number of startups in the US rose 23% in 2020, according to a Peterson Institute study . Meanwhile, the number of new company incorporations in the UK increased by 22% in the 12 months to March 2021, according to Companies House data [3 & 4].
Young people are also contributing to this growth in entrepreneurship. The average age of founders that started companies which later turned into unicorns is 34. But that continues to trend lower. For example, two of the three co-founders of Berlin-based renewable energy unicorn Enapter were just 23 and 26 when the business was launched .
With economies rapidly digitising, opportunities for disrupting existing businesses abound. Much of that disruption is being underpinned by the growth in smartphone usage, with more than eight in every ten people around the world now having access to a smartphone, according to BankMyCell research . That opportunity is particularly apparent in low-income countries where half of new startups expect to increasingly use digital channels for sales over the next six months .
Those trends are shaking up global industries as diverse as health, education, commerce and financial services. For example, funding for healthcare artificial intelligence startups skyrocketed in 2021 according to CB Insights, with those startups using AI to transform areas such as surgery, radiology and clinical trials .
Entrepreneurs are also increasingly seeking to solve broader economic and social challenges, such as improving sustainability and boosting financial inclusion. These challenges are often cross-border in nature. Nigerian fintech startup Paystack, for instance, is helping to improve the ecommerce landscape in Africa by enabling merchants to start accepting online payments.
Despite the recent rise in pandemic-related remote working, the broader growth of support networks and communities that have developed around entrepreneurs are a vital part of any startup ecosystem, be it Silicon Valley in the US or East London’s Tech City in the UK. These ecosystems are capable of supporting large clusters of startups, often fuelling further entrepreneurial activity.
The growth in startup accelerators and incubators is also making it easier for entrepreneurs to access early-stage funding. US tech accelerator Y Combinator, for instance, provides selected startups with $500,000 of seed capital and has helped launch more than 3,000 companies, including familiar names such as Airbnb, Stripe and Coinbase.
Many governments around the world are also introducing incentives to try to attract startups. France, for example, offers tech visas and tax credits for innovation. Singapore’s government provides a number of grants and equity financing schemes for local startups as well as tax breaks for eligible companies.
Investors have been backing entrepreneurs at a record clip. Last year, startups attracted $675 billion of venture capital (VC) funding globally, double the previous record set in 2020, according to a Dealroom report . While the US attracted the most funding, Europe was the fastest-growing region, accounting for $115.4 billion of funding, more than double the $49.7 billion raised in 2020.
Buoyant markets also fuelled a record amount of VC-backed exit activity in 2021, with $774.1 billion of exit value generated through initial public offerings or acquisitions . That strong exit activity is likely to create a virtuous circle of new investments as successful entrepreneurs who have cashed out begin backing other startups as angel investors or venture capitalists.
Family offices were among the beneficiaries of this entrepreneurial boom, last year netting returns of 24% through VC investments, according to SVB Capital . A survey from EY India at the end of last year showed that family offices and ultra-high-net-worth individuals have been ramping up their allocations to private markets, with 18% of those assets invested in startups and VC funds . According to the survey, the top reason for investing in startups was the returns on offer (82% of respondents), followed by innovation and tech (53%).
With VCs sitting on a record $223 billion of dry powder  and ongoing digital transformation creating a hotbed for further disruption, it is unlikely the current entrepreneurship trend will fade anytime soon.
For more information, visit titanbay.com.
 The explosion of global entrepreneurship, General Atlantic Global Growth Institute
[5-7] The explosion of global entrepreneurship, General Atlantic Global Growth Institute