The strength (and the message) of startups

Despite Covid, startups continue to grow by showing a responsiveness and innovation that large companies should be inspired by. Like insurance carriers, whose main source of protection is still strong, yet their need for innovation to uphold their position

Published on 13 Jan 2021

Photo by Belinda Fewings on Unsplash

From September 2019 to October 2020, in the United States, startups grew by 40%. A figure that made The Economist headline as follows, “The number of new businesses in America is booming.” 

In Italy, we certainly can’t talk about a boom, however, looking at the numbers of the reports that the Ministry of Economic Development publishes every three months, there are data that perhaps many would not hope for in a year as dreadful as 2020, marked by the pandemic and the resulting economic crisis. 

At the end of September 2019, the number of innovative startups was 10,610. There were 12,068 as of September 30, 2020. More than 1,400 more with an increase of about 14%, which is no small feat in a financial year where ISTAT forecasts a GDP decline of almost 9%. 

And it gets better. By breaking down the numbers from the Business Registry by quarters, it turns out that more than half (862) of the new innovative companies have been born since April 2020, that is, in full lock down. The Startup Intelligence and Digital Transformation Academy Osservatori of Politecnico di Milano defined it as the “startup effect” in their new report. Not just because of the consistent growth rate, but also because of reactivity (63% have launched free initiatives and solutions to face the health emergency) and adaptability (30% have modified their business model). 

In a nutshell: the resilience shown by startups has been exemplary and the market has somehow rewarded them, given that the ecosystem has withstood the impact of the pandemic: in 2020 investments fell by only 2%, according to the findings of the Polimi Hi-Tech Startup Osservatorio, and a total of 683 million euros was collected. An inevitable but moderate slowdown. 

Of course startups, often in some sectors particularly affected by the lockdown like tourism for example, have also suffered. However, in this horrible year they have benefited from the digital stress we’ve all been subjected to, in work as in study and leisure: when we looked for a digital service with a customer friendly experience we often came across startups or companies that have developed projects with startups as much more responsive. 

The strength of the startups was also clear at the seventh edition of Open-F@b Call for Ideas, the international contest promoted by BNP Paribas Cardif with InsuranceUp. There was no lack of participation, no shortage of valuable projects, and the digital battle to reach the 10 finalists could not be missed. The three winners point to sensitive areas of the Next Normal: personal security in the infosphere, cybersecurity, digital health. 

The pandemic is a watershed moment for the insurance industry as it has accelerated changes that have been underway for quite a long time. The data show that Insurance Companies are still the main source of protection (see the Osservatorio Fintech & Insurtech’s 2020 Report), but there is a new willingness to embrace other stakeholders. It’s already happening, it will keep happening. For leaders, it will only be possible to understand the changes and maintain positions by carefully observing startups, their resourcefulness and creativity. To invest, collaborate, experiment. However, to get ready to face the Next Normal. 

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Giovanni Iozzia

Direttore di EconomyUp, InsuranceUp e Proptech360, ha studiato sociologia ma da sempre segue la tecnologia. È stato direttore di Capital, vicedirettore di Chi e condirettore di PanoramaEconomy.

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