The Global Startup Ecosystem Report 2021

Note From a Founder


Rarely has it felt so good to be wrong. Like other business leaders around the world, in spring 2020 I feared Covid-19 would cripple startup ecosystems and the crucial innovations brewing everywhere. But governments swept in with new policies and financial support faster and more effectively than we could have imagined. The same was true with funding. Where at first venture capital started to stutter, soon it grew—even surged—in sectors where the pandemic underscored new opportunities or tremendous need. As startups helped doctors treat homebound patients, teachers reach students, and small businesses continue to operate, it became glaringly obvious that founders would be critical to global resilience and recovery.

While the pandemic couldn’t diminish startup energy, it did loosen Silicon Valley’s grip on it. That’s something we’ve all been working toward and need to celebrate! For decades, as the Bay Area soaked up tech talent, it dramatically drove up cost of living and salaries and made space the scarcest resource. Once the physical constraints of living near the office were removed, experienced talent from the Valley dispersed around the globe, reducing the strain on real estate. Cheaper and more available space is great for founders who continue to launch in the Bay Area. And the region’s net out-migration is populating other startup ecosystems with the expertise and global relationships they need to grow even faster.

Those resources are turning up in cities and countries on six continents, where they are joined by record infusions of venture capital and a tech industry that is growing at its fastest rate since 1999—but with much stronger fundamentals. Big rounds this year and last are boosting Latin America’s expanding herd of young unicorns. Africa welcomed its fourth unicorn in March, and opportunities for growth swell along with that continent’s population, which is expected to reach nearly 2.5 billion by 2050.

The democratization of startups began before Covid. Now, with digitalization greatly accelerated by the pandemic, geographic constraints are largely gone. Among my most exciting, gratifying experiences has been watching the world map fill up with startup hotspots and welcoming new ecosystems onto our rankings and into our programs. This year we are creating continental sections to further shine the spotlight on these emerging regions.

As our global community of founders becomes larger and more diverse, the challenges we face also are growing. Our greatest responsibility is to take on climate change, which threatens the survival of our planet. In his book How to Avoid a Climate Disaster: The Solutions We Have and the Breakthroughs We Need, Bill Gates talks about an innovation gap in developing solutions to climate change. But if we were to scale most existing green technologies we could reach, or almost reach, our net-zero goal. Therein lies the bigger problem: the Cleantech Scaleup Gap. That is the failure, so far, to scale all but a few Cleantech startups.

In response, Startup Genome has partnered with others to launch Entrepreneurship For Climate (E4C), a movement uniting entrepreneurs, startup ecosystems, funders, and policymakers to solve the four biggest challenges to scaling Cleantech startups so they achieve massive impact all around the world. The emphasis is on developing nations, which are disproportionately hurt by climate change.

I invite you to join us as we unite around this challenge. We are, for example, working with our member governments to enact demand-side policies—aligned across many cities and countries—that create a global commercialization path for the most effective ready-to-scale technologies. That, in turn, will create global leaders rather than simply increase the number of parallel small experiments, as supply-side policies tend to do.

Part of our mandate, as entrepreneurs and supporters of startups, is to be more inclusive, to spread the wealth, and to assume responsibility for addressing climate change, lack of diversity, and other urgent global challenges. The pandemic spared—and then spurred—the startup economy. Now it is time for the startup economy to apply its strength and ingenuity to the world’s most pressing problems.