Nearly half of startups saw their revenue drop by 40% or more amid COVID-19 pandemic
According to Atlas VPN survey, 40% of startups saw their revenue drop by 40% or more during the COVID-19 pandemic. It turns out that the pandemic’s impact on startups’ income varies greatly depending on the industry the new company is in:
- 40% of startups saw their revenue drop by 40% or more during the COVID-19 pandemic.
- 18% of new companies saw their revenue plummet anywhere from 61% to 99% since the beginning of the crisis.
- 7% of startups lost all their customers due to the pandemic.
- Startups in Asia got hit the worst, with an average new project seeing a 39% crash in income.
- Startups in North America experienced an average decline of 31% in earnings.
- New projects in Europe experienced around 27% drop off in income, while those in Oceania suffered a 25% decline.
- Travel & Tourism startups saw a 70% nosedive in earnings.
- Blockchain & Crypto (-14%), as well as Cybersecurity (-19%) startups, were affected by the pandemic the least.
According to Atlas VPN investigation, 40% of startups saw their revenue drop by 40% or more during the COVID-19 pandemic.
Over 7 in 10 startups saw their income drop since the start of the pandemic. On average, startups saw their revenue diminish by 32%. As many as 4 in 10 startups saw their revenue decline by 40% or more.
Even 18% of new companies saw their revenue plummet anywhere from 61% to 99% since the beginning of the crisis. A significant portion, 7% of startups, lost all their customers due to the pandemic.
Rachel Welch, COO of Atlas VPN, said: “Sadly, the fact is that to survive, new companies will have to cut expenses, which means that layoffs are inevitable.”
Changes in revenue by sector
It turns out that the impact of the COVID-19 crisis on startups’ revenue varies greatly depending on the industry the company is in.
Not surprisingly, travel and tourism startups were affected by the COVID-19 crisis the most. On average, a startup in this market saw its revenue plummet by 70%.
Beauty and fashion startups experienced a nosedive of 59% in total revenue.
In contrast, new projects in the blockchain and crypto industry held up the best, with an average decrease in revenue of 14%. Close behind follows the cybersecurity industry, in which startups’ revenue diminished by around 17% since the start of the pandemic.
Startups in the gaming industry also stood the test of the COVID-19 crisis quite well. On average, a new company in this industry saw a reduction in total gains by 19%.