Best Industries for Startups
If you dream of launching your own startup, but you aren’t sure what industry is right for you, the first step is to analyze each startup industry to see which is best suited to you and holds the most opportunity. We did just that by compiling this list of the best startup industries for entrepreneurs based on current value, growth rate, and the key factors that are driving their growth.
In 2020, retail ecommerce sales worldwide amounted to $4.28 trillion, and eretail revenues are projected to grow to $5.4 trillion in 2022, according to Statistica. The driving force behind this massive growth is arguably due to online shopping being the most popular online activity.
Some of the most successful ecommerce startups are Depop, a platform for reselling clothing items, and Unbranded, a company providing a variety of low-cost items that are “unbranded.” As you can see, an ecommerce startup can take on many different forms. Whether your startup operates as an online marketplace, auction, or distributor — this industry offers a wide range of opportunities for entrepreneurs of varying types.
Get inspired with our list of the top ecommerce startups to watch!
The food delivery services industry has seen a huge increase in demand since 2020. With more people than ever staying home, the meal kit delivery service industry in particular has seen tremendous growth. This startup industry, valued at $10.26 billion in 2020, has an expected compound annual growth rate (CAGR) of 13.0% until 2028.
However, while meal kit delivery services such as HelloFresh and Blue Apron are fantastic examples of strong food delivery service startups, there are many other avenues you can go down in this industry. Grocery delivery, restaurant delivery, cannabis delivery, and more are all potential delivery startup ideas that have immense potential.
Get inspired with our list of the top last-mile delivery startups to watch!
The global healthcare IT market size was valued at $74.2 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 10.7% over the forecast period (2028), according to Grand View Research. This could result in a value of $166.0 billion by 2028.
Two of the most successful and impactful healthtech startups are Apervita and ChronicCareIQ. Apervita is a cloud-based service that allows medical professionals to share patient data, analytics, and other vital information securely. ChronicCareIQ is another cloud-based service that alerts healthcare providers when patients with chronic conditions need assistance and provides a secure method of sharing vital patient information.
Artificial Intelligence (AI)
Next on our list of booming industries for entrepreneurs is artificial intelligence (AI). 60% of entrepreneurs agree that AI is the most promising tech industry for substantial growth. The AI industry is divided into three sub-sectors: hardware, software, and services. Despite being the largest of the three AI industries at 88%, AI software is the slowest growing industry of the three. The AI industry was valued at $39.9 billion in 2019. And impressively, the industry is expected to grow at a compound annual growth rate (CAGR) of 42.2% from 2020 to 2027.
However, one of the biggest benefits of starting an AI startup is the ability to utilize the technology across a variety of industries. Companies such as Pymetrics utilize AI to match talent with employment opportunities. Socure uses AI technology to fight identity theft. Both of these are examples of AI companies that span multiple industries.
Virtual Reality (VR)
The virtual reality industry was valued at 15.81 billion in 2020, and with more people staying in their homes, the need for personal entertainment has risen. The virtual reality market is more than just video games, with movies and fully subversive travel experiences all part of this growing startup industry. Jobs in the virtual reality market are expected to reach 23 million by the year 2030.
You’ve probably already heard of Oculus, which is owned by the Meta group, but other well-known companies are also gaining momentum like iTechArt and Unity. Other big-name companies are also fighting for market shares, including Microsoft and Samsung. Startups with a creative edge will do well in virtual reality as many companies are defining what the space looks like as they develop new products.
Check out our list of the top VR startups!
Educational Technology (Edtech)
Edtech can include a variety of technologies such as the Internet of Things (IoT), artificial intelligence (AI), augmented reality (AR), and virtual reality (VR). A few of the most popular edtech companies include Blackboard, an online teaching resource, and Teachers Pay Teachers, a platform that allows teachers to buy and sell materials with other teachers.
The edtech industry was valued at $89.49 billion in 2020, with an expected compound annual growth rate (CAGR) of 19.9% until 2028, according to Grand View Research. With a growing demand for virtual education tools and resources, this industry is ripe for innovation and growth.
Get inspired with our list of the top edtech startups to watch!
Financial Technology (Fintech)
Fintech is next up on our list of fast-growing startup industries. Fintech is an industry that is expected to see continued growth — making it an ideal industry for tech-savvy entrepreneurs. To be exact, the fintech market was valued at $127.66 billion in 2018, and experts predict by 2022, the industry will be worth $309.98 billion. Fintech makes up 7.1% of the tech industry, making it the largest concentration of companies operating within a single subsection of the tech industry.
Additionally, the leading unicorn startup in the world, Ant Financial, a company under the umbrella of ecommerce giant Alibaba AliPay, is a fintech company. However, there are a plethora of other successful fintech companies such as Venmo, Robinhood, and Klarna that offer different financial services to their customers from the convenience of an app.
As our world continues to move into a digital age, the need for more bandwidth and companies that are able to process large amounts of data from all the devices becomes more critical. In 2020, every person generated 1.7 MB of data in a single second. With the amount of data coming in, businesses are having a hard time keeping up.
The most well-known big data companies include Crunchbase and Oracle, with a number of other businesses making their name known in smaller niches within the big data space. With 95% of businesses claiming unstructured data as a major problem in their business, there is an expectation of more startups entering the space.
Supply Chain Management and Logistics
The pandemic disrupted the logistics industry across the world, but it also dramatically raised the need for the industry. More people than ever before have turned to online shopping to avoid large crowds and potentially risky public situations. Now, the entire global supply chain market is expected to have a compound annual growth rate of 11.2% from 2020 to 2027.
Although established companies like Cisco and Alibaba lead the world in supply chain management and logistics, there is room for startups to undertake smaller accounts. Entrepreneurs can concentrate on multiple niches within the industry to make an impact on the global supply chain.
Leisure and Entertainment
While people were forced indoors during the pandemic, many turned to streaming platforms and online games for entertainment. This shift has sparked growth in the leisure and entertainment industry as more consumers flock to digital platforms. In fact, in 2020 alone, the global digital gaming market saw an increase from 2019, bringing it to $114 billion.
Home entertainment companies Microsoft and Improbable have established themselves as leaders, but continued growth in the category will continue to open new avenues for startups. The inclusion of home entertainment and leisure has added opportunities to what’s possible in the industry.
The real estate industry changed during the COVID-19 pandemic as more people were forced to view homes digitally, and competition has caused prices to rise. The median home price in 2022 is $357,300, and houses are only on the market for an average of 38 days. The change in the industry has opened the door for startups to create solutions for modern problems.
While Keller Wiliams and RE/MAX continue to hold the biggest shares of the market, opportunities for startup companies are strong as the industry continues to make an adjustment into the virtual world of home buying.
Visit our list of the top real estate startups to follow!
Startups looking to scale should consider business-to-business (B2B) software as an industry to take advantage of. According to UserGuiding, 56% of B2B companies are incorporating digital marketing into their strategies which would include some form of digital software.
Look to companies such as Salesforce or Hubspot to understand how large a B2B software company can grow. You'll find several subsectors to get started with, including email, websites, customer tracking, and data analysis.
Last but not least on our list of the best startup industries is shared mobility. The shared mobility industry compasses several different subsectors, including ride-sharing, bike-sharing, ride-hailing, and car-sharing. Companies like Lime and Populus.ai are great examples of successful shared mobility startups.
Not only was this industry valued at $99.08 billion in 2019, but it is also expected to reach $238.03 billion by 2026, according to FNF Research. Therefore, you can expect a plethora of new and exciting startup opportunities within this industry.
Recommended: Need some more inspiration to help you launch your own company? Check out our list of the top startups to watch!