2022 was an exciting year for the VC and startup world, from twitter-gate to record layoffs to projections of venture funding coming to a massive halt: It. Was. A. Year. But we made it! Now time for a bit of reflection.
When you read the phrase “top startups to watch in 2023,” what metric comes to mind? Is it the most highly funded, despite 90% of startups failing, 21% in the first year and 75% of VC-backed startups never returning money to their investors? Even late-stage VC firms that deal exclusively in investments to help companies scale up lose 30-40% of their investments on average. Those startups are considered more “established” with a rapidly-growing customer base and followers.
Is your idea of a top startup a popular one establishing its brand and perhaps even becoming a part of the popular lexicon, with its name being tossed around often through word of mouth, social media, and online searches? Surely every startup can succeed without being well-known. Still, unfortunately, popularity and success do not always go hand in hand.
To adequately cover the top startups to watch in 2023, we combined the abovementioned factors for our review. A mixture of Google searches performed for the company name, social sentiment analysis for social media mentions, and of course, total funding accumulated so far have all gone into our decision for which companies we will list below as the top startups in 2023.
The Hottest Industries for Startup Funding in 2023
Unsteady economic conditions often lead the entrepreneurially-minded among us to find new and innovative ways to make things more efficient, cost-effective, and cheaper or to generally solve new problems that hadn’t been properly tackled or handled previously. As a result, over 50 tech unicorn startups (privately held tech startups that reach more than $1 billion in valuation) launched during recessions, with the tech unicorns founded during the 2008 recession currently valued at almost $150 billion.
The lockdowns of 2020, high inflation of 2021 and 2022, housing slump, supply chain, and oncoming commodity crises set the stage for a new round of tech unicorn startups to find their customer bases in a time of economic crisis, and the top growing startup industries are a direct result.
A record number of startups reached the fabled unicorn status in 2021 at 540, up from 150 in 2020, according to Startup Genome’s Global Startup Ecosystem Report 2022.
According to Startup Genome’s 2021 Global Startup Subsector Analysis Report, the fastest-growing sectors for startups were:
- AgTech & New Food (+128%)
- Blockchain (+121%)
- Advanced Manufacturing & Robotics (+109%)
- AI & Big Data (+98%)
The lockdowns and pandemic also reversed course for some industries heading into declining numbers pre-2019, such as Educational Technology (EdTech) and Gaming. While current EdTech proved wholly unsatisfactory when needed most (during the lockdowns of students), the trailblazers have loudly called for a complete reinvention of education and its related technology.
Check out our deep dive on the top trending industries for tech startups in 2023 for more on AgTech, blockchain, manufacturing, and AI.
The Top Startups to Watch in 2023
Ranked across social sentiment, engagement, and funding, among others, are the top six startups to watch in 2023:
In a startup environment that is often primarily led by technology companies of one form or another, one common theme needs an innovative new approach for the most vital part of their product or service: writing code. StackBlitz puts many critical tools developers need into one easy-to-use platform reminiscent of a Google suite. As a result, the startup has become so popular that dev teams are using it at Google, Meta, Shopify, Salesforce, Intel, and all of the tech titans. Founded in 2018, the startup began seeing a massive rise in popularity in mid-2021 and has $7.9 million in seed funding so far.
Linktree was founded in 2016, but when the lockdowns changed our culture and made influencers more prevalent than many Hollywood celebrities, the company began seeing an instant and massive upward shift in popularity. The idea is simple: use Linktree to put all of the links to your various social platforms, donation links, or subscriptions together on one simple page. When influencers took hold of the platform and began using it to help fuel their success, the company took off. They are now experimenting with new features in search of revenue growth and raised $165.7 million in Series C funding.
FinTech would be boring if all of the startups focused on payments, so many of the top FinTech startups in 2022 have additional features or benefits to help set them apart from the crowd. Melio has taken the bane of many an entrepreneur’s existence – bookkeeping and invoices – and made it simpler. Along with keeping track of your financial records, Melio allows small businesses flexibility in paying their vendors. If your startup is strapped for cash this month but needs to pay vendors to keep going, Melio will accept credit card payments and send your vendors who don’t take that form an ACH or paper check.
Whether you believe the stories or not, we’ve likely all heard that pesticides have been making their way into the food supply for quite some time. There is vehement disagreement about whether they are harmful to the human body or not, and some who say that they are claim links to serious diseases that have surged in our society. Vestaron Corporation is an AgTech company founded in 2005 and located in North Carolina that offers a chemical-free alternative by using biological peptides for crop protection instead of chemical-laden pesticides. Although the company has been around for a while, it made the 2020 Global CleanTech 100 list and has $254.9 million in funding through its Series C round.
Located in Hong Kong, LaLaMove can be thought of as a logistics platform that is Uber for last-mile delivery and fulfillment. The platform boasts over 700,000 drivers and more than 7 million users, with metrics showing that users and drivers can be matched in as few as 12 seconds, with the subsequent deliveries completed in less than an hour. Sequoia China led the startups’ Series F funding round, bringing their funding to $2.5 billion.
Another online platform that saw a massive rise in popularity in 2022 due to the sudden surge of influencers, Gumroad was founded in 2012 but finally hit its mark a decade later. Gumroad is a self-publishing digital marketplace platform to sell digital services such as books, memberships, courses, and other digital services. Over 120,000 creators have sold around $708,000,000 worth of products using this platform, and its “hockey stick” rise in popularity in 2022 may signal that they’ve reached their “tipping point,” and that number will soon skyrocket.
It’s a startup founder’s job to be a salesman for their company, so of course, they will all likely tell you that theirs is the “best” or “top” startup company in their industry. However, others may take a myopic focus on deciding which is a top startup by simple metrics such as funding rounds, online mentions, customer base, or growth trajectory.
If you want to know the top startups to watch in 2023, you should look at multiple factors rather than just one. For example, funding rounds can be misleading, as there is still a (pretty significant) chance that a startup will fail, no matter how much funding they receive. Likewise, social media mentions or Google searches may be an excellent indicator for a free or cheap product in its beta phase but suddenly becomes wildly unpopular when the founders are forced to begin charging or raise their prices to stay afloat.
Additionally, a substantial number of “sleeper” startups are doing great work but remaining under the radar as they perfect their product or service. Finally, some founders are trying to change the world rather than become rich and famous; without people like that, our planet and society may remain stagnant.
Important lessons can be gleaned from the post and companies mentioned above for startup founders trying to determine how to make their company one of the top startups for 2023 or beyond.
Namely, some of the most significant innovation opportunities come from economic or societal upheaval. Suppose times are tough or people are worried. In that case, they are more willing to try something that offers them help, whether it was influencers finding a surge in popularity when they tried to build their side hustles during the pandemic, AgTech companies trying to prevent future food shortages, or FinTech companies working to help small business owners and entrepreneurs stretch their startup dollars.
When everyone else is worried or scared, entrepreneurs should be putting on their thinking caps and brainstorm new ways that we can offer help. A good solution might turn you into the founder of the next top startup!