January 13, 2022

7 Startup Trends to Watch in 2022 & Beyond

Written by German Accelerator

If there’s anything the world has learned over the past two years, it’s that anything can happen, and the startup ecosystem is no exception. Whether you’re a founder or an investor, 2022 is wide open with possibilities as the global community anticipates a post-pandemic future.

But not all opportunities are equally valuable – some trends promise explosive growth and greater returns. At German Accelerator, we’re familiar with the challenges and roadblocks that many startup teams face, and we’re constantly keeping our ear to the ground on what’s next in the world of technology, innovation, and VC investment.

Here are the top seven startup trends that we believe will define – and disrupt – the business world in 2022 and beyond.

Trend #1: Artificial Intelligence

This first startup trend is no surprise: artificial intelligence (AI) has become a critical asset to a wide variety of industries, which is why it’s such a hot technology for both startups and investors in 2022. For a long time, AI was just a concept, but it has made real progress in recent years, from automated chatbots to self-driving cars. And the potential for 2022 is just as ripe, from improving healthcare with better monitoring and diagnostics to aiding the justice system with faster facial recognition software. At the same time, AI comes with drawbacks, such as still undefined ethics, lax security, and data privacy concerns. However, these AI weaknesses present a host of opportunities for entrepreneurs in 2022, such as the development of ethical AI that enforces both security and privacy standards.

With the global AI market currently valued at 62.4 billion USD and with a compound annual growth rate (CAGR) of 40.2% over the next seven years, it’s no surprise that the German government has promised to increase its investment in artificial intelligence from €3 billion to €5 billion by 2025 as a part of its COVID-19 stimulus package. The German Accelerator team is already involved in a number of AI projects with both startups and other industry partners in order to empower growth in this industry, and you will see us offering more AI-specific programs in the coming months.

Trend #2: Climate Tech & GreenTech

As climate change accelerates and is an imminent threat, opportunities abound for startups working in climate tech and GreenTech in 2022 and beyond. Global energy emissions actually fell early in the pandemic, and 45% more renewable energy was generated in 2020 – both strong indicators that this sector is set for future growth. Microtrends to watch within the larger climate tech trend include biofuels and liquid hydrogen.

With the costs of renewable energy continuing to fall – while demand continues to rise – investors are keen to bankroll GreenTech startups and SMEs. Furthermore, as national governments make bolder climate pledges, they are eagerly looking for the innovations and technology that will help them realize these commitments. The new German government has identified climate as a key priority and investment, and German Accelerator is already working with a number of climate tech startups and partners.

Trend #3: BioTech & Life Sciences

COVID-19 has shown humanity that it has a long way to go in terms of harnessing biotech, medicine, and the life sciences. The year 2022 will be no exception to this trend. As entrepreneurs and investors advance the industry in 2022, key trends and technologies to watch include pharmaceuticals – especially in relation to the SARS-CoV-2 virus – synthetic biology, genomics, nanobiotech, tissue engineering/regeneration, and the use of AI in medicine.

Valued at almost 300 billion USD, the biotech industry is expected to grow at a CAGR of 15.83% between 2021 and 2028. Startup founders that seize these opportunities have not only a chance to grow immensely as a business but also to impact the future of human health and biology. German Accelerator offers a Life Sciences Program to meet the specific needs and challenges of entrepreneurs in this sector to help them grow and scale globally.

Trend #4: Blockchain Technology

Just like artificial intelligence, blockchain technology has been on the rise for more than a decade, but 2022 could be its breakout year. 2021 witnessed the upsurge of decentralized finance (DeFi) and non-fungible tokens (NFTs) – both of which use their own blockchains. In addition, the vision of the blockchain-powered Web3 promises to add another layer of secure authentication and financial transactionality to the web that bypasses existing banks and governments.

As more enterprises, governments, and individuals harness blockchain technology in 2022, startups that offer unique blockchain-driven solutions will be in the right place and the right time to grow quickly. In the German Accelerator ecosystem, we have a number of experts, mentors, and partners with experience in blockchain-oriented companies and technologies. If your team needs guidance on how to seize this opportunity, don’t be afraid to reach out.

Trend #5: Cybersecurity

Across all industries, everyone from startups to enterprises needs to protect their data as cybercriminals keep getting smarter, so expect cybersecurity to dominate market trends this year. In 2022, cyber scoring – like a credit score for cybersecurity – will become a mainstream business practice. And with more employees working at home around the globe, traditional cybersecurity perimeters are no longer relevant. Instead, IT leaders will adopt a cybersecurity “mesh architecture” (CSMA) to integrate security tools across devices and locations. According to Gartner, CSMAs have the potential to decrease individual security incidents by 90% by 2024.

In 2020 and 2021, German companies spent around 11 percent of their entire IT budget on cybersecurity. With the increase of cyber attacks against German companies rising from 75% in 2019 to 88% in 2021 and the average cost of ransomware attacks costing over 470,000 USD, it’s no wonder that 77% of German companies possess cybersecurity insurance. As such, cybersecurity has naturally become a hot industry that is ripe for investment – and returns – in 2022 and beyond.

Trend #6: AR & VR

With the potential to enhance global GDP to 1.5 trillion USD by 2030, augmented reality (AR) and virtual reality (VR) are estimated to expand at an annual rate of 35% in the next few years. Headset sales alone are predicted to hit 9.7 billion USD in 2022. AR is currently building traction with retail startups because it can provide reviews and recommendations to shoppers as they browse through brick-and-mortar shops.

AR and VR will transform a lot of sectors in 2022, but the most prominent sector will certainly be healthcare. For instance, a German project funded by the European Regional Development Fund utilizes AR for recording surgical operations for educating future healthcare workers. Another project featured a VR training simulation for ventilators. The COVID-19 pandemic has made such utilization of AR and VR all the more valuable.

Trend #7: Distributed Enterprises

With the COVID-19 pandemic, the business world was introduced to remote work on an unprecedented scale. This work-from-anywhere trend will continue in 2022 in the shape of distributed enterprises: companies that employ remote and hybrid workers across the globe with no expectation of a centralized geography. These distributed enterprises not only must reimagine the future of work, but must also deliver a seamless and secure experience to their employees across the globe.

Many of today’s startups have adopted remote work from the beginning. However, for large enterprises and governments that are still undergoing the transition, opportunities abound for innovative product and service offerings – as well as investment. By 2023, according to Gartner, 75% of distributed enterprise organizations will grow their revenue 25% faster than the competition. For remote-only startups in 2022, this trend will feel like a natural extension of their current approach.

Conclusion

Whether you’re launching a new product, expanding your service offerings, or looking for a new investment venture, these seven startup trends are sure-fire bets for success in 2022.

Whatever else might happen in the coming year, entrepreneurs, startup teams, and investors that seize these opportunities will see their business grow and expand in the years to come.

If you’re ready to scale your startup to global levels in 2022, get in touch with our scouting team to find out which program and region is the best fit for your startup and your goals.