Innovation scenario: why open startups keep growing?
Check out 5 insights about open startups and the innovation landscape.
The profile of open startups that most relate, through open innovation, with corporations has been constantly shaped. And knowing what are the causes behind the success of these ventures is one of the goals of the Ranking 100 Open Startups .
From the collection of data on the intensity of relationships and how the practice of innovation has been adopted by open startups, we were able to know the profile of the open startups that are generating the most business and, also, what are the main trends in the scenario of innovation.
Open startups will continue to rise
According to data collected between 2016 and 2021, each year, on average, 75% more startups engage in Open Innovation with corporations. Open innovation activity between startups and corporations has grown more than 5 times since 2019. This intensity is measured from the number and type of registered relationships and is reflected in the Ranking score.
In terms of the intensity of open innovation activity, we observe that it has also been increasing by 125% per year since 2016.
Based on an increasingly consolidated and sustainable innovation ecosystem, corporations have intensified and positioned the open innovation relationship with startups as a vital innovation strategy. Therefore, many companies have invested in training their teams to generate more value in their innovation relationships. Thus, the open innovation growth scenario is far from a saturation point. Another proof that this growth tends to continue is based on the number of open innovation contracts in force for a startup, which grows at an average of 55% per year, from when it registers its first contract for the Ranking.
Open startups and investments
Angel investment and seed capital are the main ways of financing startups that do open innovation.
The Ranking 100 Open Startups, due to its format and methodology, is mainly focused on startups in their early stages of development, when they have not yet attracted specific attention from venture capital .
Even so, the award-winning startups received several forms of investments, of which the predominance is of angel investment or seed capital. The average investment received among ranked startups is BRL 1.84 million.
If we consider all the startups awarded in the Ranking 100 Open Startups 2021, we see that 183 of them (65%) received direct investments. Among the TOP 100 Open Startups, 70% received these contributions.
Of the 100 startups awarded in the first edition of the Ranking, published in 2016: 50 of them are still active; 20 received a venture capital contribution after the award; 5 were acquired by other corporations; 4 received investments from corporate venture capital funds; 2 raised via crowdfunding platform; 8 reached scaleup status and one became a unicorn. The total capital raised by these 100 startups in the period was BRL 2.5 billion.
Profile of the open startups that generate the most business
It is very difficult to trace a specific profile of “champion startups” in open innovation. The field is too vast, with many particularities and a very heterogeneous mass of companies.
However, observing the analysis of the Ranking data, which carried out a survey with the TOP Open Startups awarded in the 2021 edition, it is possible to see commonalities between the champions.
Just as an illustration, we present here what the profile of a champion startup would look like. It is important to note that the items listed do not imply a causal relationship, which has not yet been analyzed. However, the exercise is interesting, as it reveals the typical profile of a startup that does well in its open innovation relationships with corporations.
A champion open startup:
- It has at least 2 founders, at least one of which has previous experience in founding some other startup.
- It offers services to companies from different sectors, learning to communicate in a specific way with each one of them.
- It is identified with more transversal characteristic categories, such as HRTechs, EdTechs, Productivity, Artificial Intelligence or Big Data. Or else specialize in a specific category.
- It has been in existence for at least 4 years, a business model initially aimed at companies (B2B) and already generates revenue, earning between $ 0.25 and 1.25 million per year.
- Has or is beginning to identify with environmental or social causes.
- It has more than 11 people on the team and is in a rented property, despite having already been through a coworking space when it had a smaller structure.
- It has Open Innovation contracts with 21 to 30 different corporations.
Other insights into open startups and the innovation landscape
The study Startups and Open Innovation 2016–2021 , based on the results of the Ranking 100 Open Startups 2021, raised other insights into the practice of innovation.
Scope — Every type of startup can develop Open Innovation relationships with corporations;
Relationship — Open Innovation relationships grow, in number and intensity, at an average rate of 125% per year;