As US Startups Wane, The Chinese Startups Are On A Rise: Says Report

Although it is difficult to analyse as to why certain startups succeed and turn into big brands, whereas some do not see the light of the day, eight-year-old Startup Genome has tried to reach some reasons that would help us understand the rise and fall of a startup.

Startup Genome is composed of a group of researchers and entrepreneurs who, every year, interview thousands of founders and investors around the world to get a better notion on what’s changing in the regions where they operate, and what remains the same.

The data and information that is being extracted by Startup Genomes will help more startups succeed.

This year, they surveyed 10,000 founders with the help of partners like Crunchbase and Dealroom. The data produced by them is sure to make the startups in the US, wary.

The report has come up with a number of interesting conclusions, let’s take a look at that.

China might overtake the U.S. in the tech startup sector

In 2014, just 14 percent of so-called unicorns were based in China. Between the start of last year through today, that percentage has shot up to 35 percent. In the U.S., the number of homegrown unicorns has fallen from 61 percent to 41 percent of the overall global number.

Hefty amounts of investment into Chinese startups can be one reason for that.

China now has four times as many AI-related applications and three times as many cryptos and blockchain-related patents registered in the country last year. With so much of the tech industry now focused on deep tech, it’s worth noting.

The reports claim that there has been a drop of roughly 35 percent drop in funding over the last five years in the ad tech sector. This is linked to the growing dominance of Facebook and Google, which accounted for 73 percent of all U.S. digital advertising last year, according to the equity research firm Pivotal.

While funding for adtech has dropped, virtual reality and augmented reality could well inject some new growth into the industry at some point. Maybe.

As per the report, Stockholm, a relatively small startup ecosystem, is able to produce sizable startups at a meaningful rate, versus Chicago, whose ecosystem is ostensibly three times bigger because Stockholm’s startup founders are better connected to the world’s top seven ecosystems.

The report also talks about women founders, who build more relationships with regional founders and are more locally connected than their male counterparts but not with investors. It has been pointed that local connectedness is associated with better startup performance.

Also Read: Here’s How Chinese Companies Are Helping Indian Startups Flourish