2024

State of
Innovation
Survey
Techstars 2024
State of Innovation
Survey

About Techstars
Techstars invests in early-stage startups led by unstoppable
entrepreneurs with transformative businesses. With 45+ accelerators
worldwide, an unrivaled network of alumni, mentors, commercial
partners, investors, and dedicated operating teams, Techstars supports
entrepreneurs throughout their entire startup journey while helping to
build thriving startup communities. Since 2006, we have invested in more
than 4,400 portfolio companies, accelerating the growth of businesses
including Chainalysis, Zipline, DataRobot, Alloy and many, many more.
www.techstars.com

4,400+
accelerator companies
9,600+
accelerator founders

20
$1B+ accelerator
$113.6B
cumulative market cap
companies (accelerator companies)

$27.6B
total lifetime raised
17
years backing
(accelerator companies) early-stage startups

Data as of May 31, 2024 2

Techstars 2024
State of Innovation
Survey

Contents
I. Introduction from Techstars CEO David Cohen 04
II. Market Confidence: Pragmatic Optimism 06
Outlook for 2024
Exits
Long-Term Ambitions

III. Startup Life: R.I.P. The Old Way of Working 12

Working Week
Future is Flex
Founder Flywheel
Mental Health

IV. Firestarters: It Takes an Ecosystem 17

Innovation Drivers Today
Innovation Drivers Five Years from Now

V. Innovation by Sector: All About AI? 21

Sectors
AI Tag is a Must-Have

VI. Innovation by Hub: Valley Leads, as Asian Hubs Rise 25

VII. Innovation by Region: North America Surging 28
Most Startup Growth

VIII. Methodology & Respondent Profile 31

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Techstars 2024
State of Innovation
Survey

Introduction from
Techstars Founder
& CEO David Cohen
It’s my great pleasure to welcome you to the second Techstars State of Innovation Survey, our
annual deep dive into how our global network of entrepreneurs, aspiring entrepreneurs and venture
capital investors view innovation in their sector, startup communities, and around the world.
Techstars currently operates 48 accelerator programs in 35 cities in 13 countries. Last year we
channeled more capital to more startups than ever before (684 portfolio companies graduated
Techstars in 2023, up from 611 in 2022). Well over 4,000 startups have graduated from our
accelerator programs since inception. Together those companies cover just about every vertical in
tech from Advanced Manufacturing to Web3, and have a cumulative market cap of $113.6B. That
scale enables us to help more entrepreneurs succeed – with high quality content and personalized
support, and the vast Techstars network startups can access post-accelerator. It also results in an
ever-expanding set of data to crunch and a unique vantage point from which to track the trends
shaping early-stage entrepreneurship.
As the “Great Venture Capital Reset” continues, this year’s survey returned to many of the topics
we covered in 2023, and added some new questions to get to the heart of the global innovation
economy and find out what it’s really like to be a founder (and VC) today. Among many interesting
findings from the 1,550 responses we received, these seven stood out to me:

IPOs are out: Entrepreneurs are no less ambitious, but those ambitions are
less likely to include an IPO. With fewer startups going public overall, just 15%
of all the founders surveyed say their primary long-term goal for their startup
is to go public. One third (34%) say their goal is to be acquired by Big Tech or
a large corporation, while a similar number (30%) would opt to remain private/
independent.
Startup culture is nose-to-the-grindstone: In a tight market, nothing less
than utter conviction and a flat-out approach are required to beat the odds.
This is reflected in the hours entrepreneurs work, with nearly one-third (31%)
working at least 60 hours per week, and almost one in five (17%) working 70
hours or more.
Nearly half of founders have experienced anxiety in the past year:
How well can startups truly serve their customers if founders are suffering
poor mental health? Long hours and an always-on mindset are clearly taking
a toll throughout the industry. With respondents (entrepreneurs and VCs)
able to check as many boxes as are applicable to them, 45% say they have
experienced anxiety in the past year, with 23% experiencing “depression”.
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Techstars 2024
State of Innovation
Survey

Founder flywheel – entrepreneurs keep coming back for more: A pattern

of entrepreneurs going on to found other startups continues apace, showing
how momentum within an ecosystem becomes self-sustaining. Three-quarters
(79%) of current entrepreneurs have worked for other startups, while 44% say
that at least some coworkers have gone on to establish other startups.
As AI proliferates, the majority of founders still focus on other tech:
Despite AI being the megatrend of the moment, the majority (60%) of founders
surveyed worldwide are not building an AI solution. However, 33% are using
AI as an enabler of their business and 41% say the technology is a direct
component of their business.
The Valley still rules, but Asia is on the march: Almost half (48%) of
entrepreneurs and VCs believe Silicon Valley will still be the world’s most
innovative hub five years from now, up 3% on last year’s survey. However,
the great Asian cities are gradually making up ground, thereby confirming
the shift towards a more multipolar technology world. Singapore remains in
second place at 31%, up 1% on 2023, according to respondents. Fifth-placed
Shanghai increases its share by 2% to 24%, Beijing (up 4 to 23%) leapfrogs
London (up 1 to 22%) to take sixth spot, while Seoul (up 2% to 20%) and
Tokyo (down 1% to 17%) also make the cut. Overall, there are five Asian cities
in the top 10, vs. three U.S. hubs.
The U.S. will see the greatest spike in new startups, as Africa eclipses
Europe: Entrepreneurs and VCs in 2024 (29%) are significantly more likely to
believe North America will see the greatest spike in new startups (vs. 22% in
2023). But a surging U.S. is only part of the story. Nearly three times as many
respondents (17%) predict that Africa will produce the most startups this year
compared to Western Europe (down 4% to 6%).

With rising challenges across society from climate change to human longevity, to national
resilience and defense, there has never been a more important time to support early-stage
innovation. We hope this survey can continue to play its part in casting a spotlight on this
vital stage of the entrepreneurial journey.

David Cohen
Founder & CEO
Techstars

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II.
Market Confidence:
Pragmatic Optimism
Techstars 2024
State of Innovation
Survey

The past 12 months have continued to be bumpy for both entrepreneurs and
VCs – the VC industry has contracted, funding is tight, valuations have dipped,
downrounds have surged, and IPOs have shown only flickers of life. Against this
backdrop, here’s a snapshot of how founders and investors view the current
state of the market:

2.1. OUTLOOK FOR 2024

76% of founders remain “optimistic”

The Techstars Take:
Being an entrepreneur is a leap of faith. The odds are stacked against you
(industry-wide, three in four VC-backed startups fail to return investors’
capital), and the journey itself is fraught with challenges, many of them
potentially existential. Yet vast numbers embark on this path annually –
hundreds in Techstars accelerator programs alone. Why? Because
founders are innate optimists. They launch and build despite strong
headwinds and unfavorable market conditions, and remain resolutely upbeat
about their prospects, with 76% of them broadly optimistic in their outlook
for their startup. But the finest founders always temper their idealism with
a heavy dose of pragmatism. Their lack of confidence that M&As and IPOs
will rebound anytime soon reflects the reality of a still moribund liquidity
market. The fact that so few (just 15%) have a long-term goal of an IPO,
and comparatively so many (30%) intend to stay private, shows how self-
sufficiency and early profitability are prized over the scale-at-all-costs
model that dominated until just a few years ago.

Outlook for Startups in 2024

Extremely optimistic
9% Founders:
Despite the myriad challenges,
Somewhat optimistic three-quarters (76%) of current
entrepreneurs say they are either
Neither pessimistic
32% 12% “extremely optimistic” (32%) or
nor optimistic
“somewhat optimistic” (44%) in
Somewhat pessimistic their outlook for their startup in
2024, underscoring how successful
Extremely pessimistic entrepreneurship requires innate
44% market-defying confidence and
self-belief.

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Techstars 2024
State of Innovation
Survey

As a founder, if you didn’t believe in your startup and that you have an unfair
advantage in the market, you just wouldn’t do it. We’re optimistic because
we see how much better expert dermatology care can be today. And as a
healthcare company, once you figure out your regulatory pathway, how to make
money, and what problem you solve for the various stakeholders, you can grow
disproportionately quickly, just like Techstars company PillPack, which was
acquired by Amazon after figuring these things out.

Susan Conover, Co-founder & CEO of Piction Health

Entrepreneurs tend towards optimism, and like most founders, I’m largely
positive in my outlook for Sendbird and the tech industry as a whole for the rest
of 2024. With inflation stabilizing, layoffs slowing and rumblings of rate cuts,
the vital signs are good. But the elephant in the room? IPOs.

John S. Kim, Co-founder & CEO of Sendbird

Most Important Issues Affecting Company Today Outside

of Core Operations and Financial Management

Access to Capital 60%

The Economy/Macroeconomic Environment 39%
Access to Talent 29%
Staying Competitive as AI accelerates 22%
Rising Burnout Amongst Employees and/or Leadership 19%
Cybersecurity Risks 6%
Other 7%
We are Currently Not Facing any Issues 5%
outside of core financial management

When asked what are the most important issues affecting their companies today (outside of core operations and
financial management), 60% of entrepreneurs cite “Access to Capital” (respondents could select up to three options).
The difficulty entrepreneurs have in accessing capital correlates directly with the ‘optimism gap’ between founders and
VCs. Only 50% of investors are “somewhat optimistic” (44%) or “extremely optimistic” (6%) for their VC firm this year
compared with 76% of entrepreneurs.

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Techstars 2024
State of Innovation
Survey

The difficulty entrepreneurs have in accessing capital correlates

directly with the ‘optimism gap’ between founders and VCs.

Outlook for Startups in 2024

Extremely optimistic
6%
Somewhat optimistic

Neither pessimistic
17%
nor optimistic

Somewhat pessimistic

VCs:
Optimism is part of a VC’s job description. Each
investment, especially at the earlier stages, is also a
44% 33%
leap of faith: they place these bets for the long term,
often with scant information and few metrics to go
on. But while half of the VCs in our survey do indeed
profess to have a positive outlook for their firm this year,
that optimism doesn’t necessarily translate into action;
retaining huge amounts of dry powder (aka committed
but unallocated capital), the industry’s global startup
deployment in 2023 was at a five year low
(Source: Crunchbase).

Most Important Issues Affecting VCs Today

Sourcing High Quality Startups and Entrepreneurs 64%

Fundraising Challenges 40%
The Economy/Macroeconomic Environment 38%
Staying Competitive as AI Accelerates 23%
Access to Talent 22%
Other 5%
Not Currently Facing Any Issues 6%

It’s notable that when asked for the most important issues facing them today, a staggering 64% of VCs surveyed say
“Sourcing High Quality Startups and Entrepreneurs” (respondents could select up to three options). For this reason, we
see a growing role for high quality accelerator programs that can provide VCs with a steady stream of pre-vetted startups
which have been through a rigorous selection process followed by an intensive entrepreneurial bootcamp.

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Techstars 2024
State of Innovation
Survey

2.2 EXITS

Confidence low for

M&A and IPO comeback
Exits this year: Entrepreneurs and VCs in our survey do not have much confidence that either Tech Mergers and
Acquisitions (M&As) or Initial Public Offerings (IPOs) will return this year. While those who are “moderately confident” are
roughly the same in both categories – 38% vs. 40% – there is palpably more confidence about M&As and significantly
less about IPOs returning. 40% are either “very confident” (29%) or “extremely confident” (11%) that M&As will recover
this year, with just 21% either “slightly confident” (16%) or “not at all confident” (5%). Meanwhile, only 17% are either
“very confident” (13%) or “extremely confident” (4%) that IPOs will be back, with 43% either “slightly confident” (28%)
or “not at all confident” (15%).

Confidence That Tech M&As and IPOs Will Return This Year

Extremely Confident 5% 4%
11% 15%
Very Confident 13%
16%
Moderately Confident 29%
28%
Slightly Confident 38% 40%
Not at all Confident

Tech Mergers & Acquisitions Tech IPOs

Exits over the next two years: What difference does extending the horizon by another year make to market confidence
today? Not much, according to the majority of entrepreneurs and VCs in our survey, especially when it comes to IPOs,
with 39% answering that they are “slightly confident” (27%) or “not at all confident” (12%) that IPOs will spring back
within the next two years.

Confidence That Tech M&As and IPOs Will Return in the Next 2 Years

5% 5%
Extremely Confident
12% 12%
14% 18%
Very Confident

Moderately Confident 32% 27%

37% 38%
Slightly Confident

Not at all Confident

Tech Mergers & Acquisitions Tech IPOs

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Techstars 2024
State of Innovation
Survey

2.3 LONG-TERM AMBITIONS

IPOs fall further out of favor

Startups’ Primary Long-Term Goal

Acquisition by big tech 34%

or large corporation 36%
Stay private, 30%
stay independent 28%
15%
IPO
16%
Acquisition 8%
by private equity 7%
3%
Other 3%
2024
Not sure yet, 9%
still getting started 10% 2023

0 10 20 30 40 50

One-third (34%) of entrepreneurs say their primary long-term goal for their startup is to be acquired by a big tech
company or large corporation, while a similar number (30%) would opt to remain private/independent. Just 15% say they
favor an IPO. These numbers are broadly consistent with 2023. In combination with the lack of confidence that IPOs will
bounce back in short order, this year’s data further underlines the trend that startups are staying private for longer, and
IPOs are out of favor with the vast majority of early-stage entrepreneurs.

We are keeping our options open about our long-term ambitions. It’s too early
to determine the strategic moves that will allow us to become world leaders in
air-to-water harvesting, but we are always discussing collaboration
opportunities that may get us closer to our goals.

Iheb Triki, Co-founder & CEO of Kumulus Water

Great companies are built during the toughest economic environments.

By persevering when times are harsh, they gain market share to eventually lead
their entire industry towards long-term growth. At Paperstack, we are relentless
in our pursuit of building a global fintech platform to help millions of businesses
access working capital. And because our market is so huge, we believe in our
strategy to wait out the downturn and eventually reach the necessary
scale to IPO.

Assel Beglinova, Co-founder & CEO of Paperstack

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III.
Startup Life:
R.I.P. The Old
Ways of Working
Techstars 2024
State of Innovation
Survey

This year we wanted to get a deeper sense of the people behind the companies,
and what it’s really like to be a startup entrepreneur today. So in addition to the
two questions in last year’s survey about how and where founders work (remote
vs. flex vs. in-office), and whether they have previously worked at other startups
or have coworkers who have gone on to become entrepreneurs themselves, we
added two more questions addressing founders’ typical working week, and the
impact of starting and leading a business on their mental health.

The Techstars Take:

It’s true that few, if any, founders have ever worked the traditional
‘nine to five’; set hours and short working weeks are an anathema to
entrepreneurship. Nevertheless, the old working life’s rhythms and rigidities
appear to have changed for good. Today nearly a third of founders work at
least 60 hours per week, with almost one in five (17%) working 70 hours or
more. And they’re increasingly doing so alone, without the camaraderie of
coworkers or – when you work at a kitchen table – the ability to draw a clear
line between the working day and a personal life. Perpetually online, it’s
little wonder that many entrepreneurs report high levels of stress, with 23%
of those in our survey saying they have experienced depression in the last
12 months. It’s therefore vital that mental health continues to be discussed
openly in startup circles, as it is at Techstars.

3.1 WORKING WEEK

Nearly one in three founders

work 60+ hours a week
Number
of hours a
week worked
It’s a given that there’s no such thing as overnight 17% 16%
success in entrepreneurship, and building a company
demands relentless grind, reservoirs of resilience and the <40
ability to sustain long hours of work for long periods of
time. But how many hours exactly? Unsurprisingly, current 14% 40-49
entrepreneurs we surveyed tend to work far more than the 28% 50-59
once typical 40-hour work week – with well over half (56%)
working more than 50 hours a week, and almost one in five
(17%) working 70 hours or more.
25% 60-69

70+

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Techstars 2024
State of Innovation
Survey

My working day ranges from eight to 14 hours, but I’m always thinking,
so never ‘off’. Obviously that means high stress levels, but I keep my sanity
by doing high intensity workouts to offset the anxiety and stress, and by going
on long walks with my dog.

Melis Dural, Founder & CEO of Ekos.ai

See Techstars documentary series on mental health

and our mental health toolkit

3.2 THE FUTURE IS FLEX

Just one in 10 founders expects

a full-time return to the office
Current Work Location Expected Work Location in 5 Years

11% 14%
27%

51%
38%
Fully Remote
59%
Flex

In-Office

Despite the many headlines declaring that certain large employers are demanding staff return to the office, there is
little sign of that happening in the world of tech startups. The number of current entrepreneurs reporting that they work
in-office or flexibly (partially in-office, partially remotely) today has actually gone down year over year, while over half
(51%) say they work fully remotely.

And few expect a headlong rush back to the office anytime soon, with well over half (59%) of respondents expecting
to work flexibly and just 14% predicting a full-time return to the office five years from now. Significantly, the number
expecting to be fully remote by then almost halves from 51% currently, to 27% in five years time, suggesting that the
future looks very much flex.

When the numbers are broken down further, fully remote entrepreneurs today are most likely to work in startups based
in the U.S. (46%), and are far more likely to work remotely than founders in India (6%), the U.K. (5% – down from 11%
in 2023), Nigeria and Canada (both 5%) or Germany (4%). They are also more likely to say their U.S.-based startup
is located in California (23%) or New York (10%).
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Techstars 2024
State of Innovation
Survey

3.3 FOUNDER FLYWHEEL

Founders tend
to be serial entrepreneurs
Startups Worked at Before Current Startup

12% 14%
21% 22%
None

One 21% 20%

47% 45%
Two to Four

Five or More

2023 2024

A pattern of entrepreneurs going on to found other startups continues apace, demonstrating how momentum within
an ecosystem becomes self-sustaining. Our survey finds that entrepreneurs tend to be the rarest of breeds: undeterred
by the long hours, around the clock demands and psychological impact, they keep returning to the startup well. Over
three-quarters (79%) of current entrepreneurs have worked for other startups in the past with nearly half (45%) having
worked for two-to-four startups previously. A whopping 14% of current entrepreneurs say they have worked at five
or more startups.

Company Employees who Left to Found Other Startups

9% 7%
None 5%
5%
One or Two 4% 4%

Three to Five 12%

11% 45% 49%
Six to Nine
Ten or More 25% 23%

Unsure

2023 2024

44% of current entrepreneurs say that anywhere between “1 to 2” and “10 or more” coworkers have gone
on to establish other startups, with about a quarter (23%) saying that “1 to 2” employees have left to start other
companies, and 12% saying that “3 to 5” coworkers have gone on to found other companies.

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Techstars 2024
State of Innovation
Survey

3.4 MENTAL HEALTH

56% of entrepreneurs say they

have experienced ‘high stress’
in the past year
I categorize the way I work on improving my mental health into “habits” and
“rhythms”. My habits include things like sleeping enough (now about eight
hours a night), no longer drinking alcohol, minimizing caffeine, avoiding drugs,
and carving out time for myself. My rhythms include things like meditating
daily, running, reading, taking a digital sabbath (no email or work on Saturday),
and taking a week off the grid with my wife each quarter.

Brad Feld, Co-founder of Techstars

Experiences in Past Year

High Stress Anxiety Depression Other NA

In recent years, founder mental health has become less and less of a taboo. The always-on nature of the role, combined
with the squeeze it places on friends and family time, clearly does have an impact on psychological well-being. With
respondents (entrepreneurs and VCs) able to check as many boxes as are applicable to them, 45% say they’ve felt
“Anxiety” in the past year, with just under a quarter (23%) saying they’ve experienced “Depression”.

I work 40+ hours a week, and have a one-and-a-half year old and an almost
three-year-old. From the long work weeks and young kids I developed localized
vitiligo, and after living in Bali for three years, and leaving in 2022, it’s been a
struggle for us to get back into our ‘groove’. So I now meditate five times per day
for 14 minutes each time, fast for 18 hours per day and brain dump into a journal
app on my phone called Day One.”

Brandon J. McGill, Founder of NGHBR

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Techstars 2024
State of Innovation
Survey

IV.
Firestarters:
It Takes an Ecosystem

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Techstars 2024
State of Innovation
Survey

The Techstars Take:

What are the elements an ecosystem needs for innovation to thrive?
Startup Genome’s annual rankings, for example, measure a combination of
a tech hub’s “performance”, “funding”, “talent & experience”, “market reach”
and “knowledge”. This dovetails with our own perspective on innovation:
an accelerator itself is just one driver, alongside access to VCs and angels,
community and proximity to other startups, corporates, universities and
government bodies. Most markets do not (yet) have the requisite density,
which is why ecosystem development – where we partner with corporates,
universities and government entities – is an essential part of what we do.
Across 2023, we ran 308 Startup Week/Startup Weekend events in 261
cities in 65 countries, and 10 Founder Catalyst programs in five cities in four
countries, because it is only when all those elements come together that the
sparks of innovation fly.

For startup ecosystems to reach escape velocity, entrepreneurs need a

critical mass of risk-takers in venture capital (including accelerator programs
like Techstars), corporate investment, supportive and active government
engagement, other entrepreneurs with whom to exchange ideas, experienced
mentors, and large-scale suppliers of talent such as universities. When all of
those things are mixed together, that’s when the magic happens. And we’re
seeing that in Tokyo today.

Noriya Tarutani, Deputy Director-General,

Japan External Trade Organization (JETRO) & Head of JETRO Startup,
partner for Techstars Tokyo Accelerator

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Techstars 2024
State of Innovation
Survey

4.1 INNOVATION DRIVERS TODAY

No single institution or factor is the standout driver of innovation today, according to entrepreneurs and VCs. When
asked for the biggest innovation driver in their sector currently, answers are spread evenly between “VC/Angel Investors”
(22%), “Accelerator Programs” (19%), and “Community/Proximity to Other Startups” (18%).

Biggest Driver of Innovation Currently

Venture Capital/ Angel Investors 22% Universities 10%

Accelerator Programs 19% Government 10%
Community/ Proximity to Other Startups 18% Corporate Social Responsibility 3%
Corporates 11% Other 7%

Reasons: When those who select “Venture Capital/ Angel Investors” as the biggest driver of innovation are asked
why they think this, answers include “They are providing not just resources, but also a common belief in causes
like Generative AI, Autonomous Agents, etc. This builds a positive reinforcement feedback loop”.

Among those who select “Accelerator Programs”, providing “opportunity for local innovators to be seen”, the ability
“to expedite their growth and develop market-ready products or services” and “a community and critical boost to
get going” are typical reasons cited. Similarly, entrepreneurs and VCs who check “Community/Proximity to Other
Startups” as the biggest innovation driver explain their decision, for example, by saying that “Community encourages
collaboration, connections and growth,” and “as a founder, the biggest challenge is ‘knowing what you don’t know.’
Proximity with other founders can help navigate this unknown landscape.”

4.2. INNOVATION DRIVERS FIVE YEARS FROM NOW

Are we seeing the beginning of an emergent trend towards “Corporates”, “Government”, “Universities”, and “Other”
innovation drivers? On the face of it, our survey reveals little change on last year’s data on what entrepreneurs and VCs
perceive will be the biggest driver of innovation in their sector five years from now: “Venture Capital/Angel Investors” has
dipped by 2%, “Accelerator Programs” by 3% and “Community/Proximity to Other Startups” has remained steady. But
there has been a cumulative 6% shift towards “Corporates” (up 2%), “Government” (up 1%), “Universities” (up 1%), and
“Other” (up 2%), reflecting a growing role for these alternative drivers as investors deploy less capital. Techstars’ deep
and ongoing partnerships with multiple corporates, governments (national, regional and city) and universities over the
years are both a proven means for ecosystem development and for empowering entrepreneurs with capital,
connections and domain expertise.

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Techstars 2024
State of Innovation
Survey

Biggest Driver of Innovation Five Years from Now

2023 2024

Venture Capital/ Angel Investors 26% 24%

Community/ Proximity to Other Startups 22% 22%
Accelerator Programs 17% 14%
Corporates
10% 12%
Government
11% 12%
Universities
9% 10%
Other
5% 7%

Among the explanations for what will be the biggest driver of innovation five years from now for those who pick “Venture
Capital/Angel Investors” are “risk appetite,” and that “access to funding allows startups to move quicker and do more
experiments”. For those who select “Community/Proximity to Other Startups”, “being close to other startups creates
a vibrant community that encourages the exchange of knowledge, resources and support”, and “Ecosystem will drive
innovation - think Silicon Valley effect” are among the answers. For “Accelerator Programs”, a typical justification is
“accelerator programs provide mentorship, networks, resources, and investor readiness, accelerating startup growth.”

From a regional perspective, African respondents (24%) are significantly more likely than all other regions to say
“Accelerator Programs” will drive innovation five years from now, while Eastern European VCs and entrepreneurs (30%)
are second most likely, after those from Africa (32%), to say “Venture Capital/Angel Investors” will be the biggest driver.
Those in APAC are significantly more likely to say “Government” (20%). Eastern European (26%), Western European
(23%) and North American founders and VCs (also 23%) are the most likely to check “Community/Proximity to Other
Startups” as the biggest driver five years from now.

Founders thrive around other founders. I always feel I’m learning the most
when surrounded by smart, ambitious entrepreneurs changing the world with
their ideas and relentless execution. It reminds me of why we decided to start
a company in the first place.

John S. Kim, Co-founder and CEO of Sendbird

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V.
Innovation by Sector:
All About AI?
Techstars 2024
State of Innovation
Survey

Web3 dips, as DeepTech

and HealthTech still seen
as most innovative
The Techstars Take:
While there is little movement at the very top of our Most Innovative Sectors
table year over year, there are some interesting fluctuations lower down.
Fintech, for example, has dipped by 3% year on year, with entrepreneurs and
VCs in Africa (49%), LatAm (45%) and APAC (41%) significantly more likely
to say that the sector is among the most innovative compared to those in
North America (25%), and Western Europe (30%), where the fintech markets
are far more developed. Similarly, Aerospace & Defense, which rose by 1%
this year, was far more likely to be selected by respondents in Eastern (33%)
and Western Europe (31%), than founders and VCs overall (25%), arguably
reflecting the importance of innovation in those spheres due to the ongoing
war on Europe’s doorstep. The ubiquity of AI in our survey, with 74% of
entrepreneurs claiming it is either a direct component or an enabler of their
business, is reflected in the number of new companies in the Techstars
portfolio with an AI/Machine Learning vertical listing, which surged by nearly
40% between 2022 and 2023. However, it should be noted that even as AI
proliferates, the majority of entrepreneurs (60%) say that technology is used
only as an enabler of their product or service or they do not use it at all.

5.1. MOST INNOVATIVE SECTORS TODAY

Last year saw the winds of the crypto bear market blow away many of the
unsustainable, hype-driven companies that probably shouldn’t have started in
the first place. Clearly that’s affected the perception of Web3 as a whole. But
the good news is that the clearout has left those startups with genuine value
– the ones with staying power that do need to see the light of day – and fertile
ground for new projects as well.”

Pete Townsend, Managing Director of Techstars Web3 Accelerator

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Techstars 2024
State of Innovation
Survey

Most Innovative Sectors Currently

2023 2024
DeepTech 42% 43%
HealthTech 43% 42%
Fintech 36% 33%
Sustainability 32% 29%
Enterprise & SaaS 27% 29%
Gaming, Media & Entertainment 29% 27%
Aerospace & Defense 24% 25%
Advanced Manufacturing 21% 23% While there is remarkable stability year over year
when it comes to which sectors entrepreneurs and VCs
Web3 31% 22% perceive as the most innovative today – DeepTech and
Future of Work 22% 20% HealthTech continue to top the chart – one thing stands
out dramatically: the fate of Web3. With respondents able
Travel, Infrastructure, Logistics 16% 14% to select up to five sectors, 43% pick DeepTech (up 1%
Consumer Goods & Retail 11% 11% on 2023), 42% choose HealthTech (down 1%), 33% say
Fintech (down 3%), 29% each say Sustainability (down
Natural Resources 10% 9% 3%) and Enterprise/SaaS (up 2%). However, Web3
Proptech 5% 6% plunges by 9% from 31% in 2023, to 22% this year
– a sign no doubt of the “clearout” in the sector
Other 5% 6% that Techstars MD Pete Townsend refers to.

Most Innovative Sectors Currently by Region

2024 Asia Eastern Western Middle North

Overall Africa Pacific Europe Europe LatAm East America
DeepTech 43% 35% 38% 48% 55% 29% 32% 43%
HealthTech 42% 38% 41% 39% 44% 48% 41% 42%
Fintech 33% 49% 41% 24% 30% 45% 24% 25%
Enterprise & SaaS 29% 37% 30% 26% 22% 25% 24% 33%
Sustainability 29% 26% 32% 35% 33% 26% 37% 25%
Gaming, Media & Entertainment 27% 27% 32% 29% 29% 27% 34% 23%
Aerospace & Defense 25% 14% 26% 33% 31% 28% 27% 24%
Advanced Manufacturing 23% 18% 27% 20% 25% 18% 17% 24%
Web3 22% 26% 24% 30% 23% 22% 29% 19%
Future of Work 20% 18% 16% 17% 18% 23% 39% 23%
Travel, Infrastructure, Logistics 14% 20% 19% 14% 10% 25% 24% 10%
Consumer Goods & Retail 11% 22% 15% 8% 5% 10% 12% 9%
Natural Resources 9% 11% 13% 11% 8% 9% 17% 8%
Proptech 6% 5% 4% 6% 6% 7% 5% 6%
Other 6% 5% 4% 8% 5% 4% 7% 7%

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State of Innovation
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When considered by region, respondents in Western Europe (55%) and Eastern Europe (48%) are more likely to see
DeepTech as the most innovative sector, with those in LatAm (48%) Western Europe (44%), and North America (42%)
most likely to select HealthTech. Entrepreneurs and VCs in Africa (49%), LatAm (45%), and APAC (41%) are significantly
more likely to say Fintech is among the most innovative sectors – whereas in Western Europe and North America, just
30% and 25% respectively, and 24% each in Eastern Europe and the Middle East, view it that way. Meanwhile, 33%
of Eastern Europeans select Aerospace & Defense as the most innovative – where the overall figure is 25%.

5.2 AI TAG IS A MUST-HAVE

Three-quarters of entrepreneurs
say AI is a component or enabler
of their business.
Ever since ChatGPT erupted into the mainstream making Generative AI the technology megatrend of last year,
investment has deluged the sector with a record $29.1B invested globally across 691 Gen AI deals in 2023 – a 268%
increase in deal value over 2022 (Source: PitchBook).

Artificial Intelligence is a Direct Component

of Business Proposition

33% 41%
We use AI as an Yes
enabler but we are When we asked current entrepreneurs in our survey
not developing an whether AI, in the wider sense, is a direct component of
AI solution their business, 41% say that it is. However, despite the
scramble to attach an AI-tag to many tech businesses
today, the majority (60%) of founders focus on other tech,
either using AI as an enabler or not at all.

27%
No

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State of Innovation
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VI.
Innovation by Hub:
Valley Leads, as
Asian Hubs Rise

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State of Innovation
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The Techstars Take:

While Silicon Valley appears to dominate both tables (Most Innovative Hubs/
Cities today and in five years), an underlying trend that we first highlighted
last year continues. Whereas 66% of respondents consider the Valley to be
the most innovative hub today, that number falls to 48% when participants are
asked to predict the world’s leading innovation hub five years from now (the
corresponding 2023 figures were 63% and 45%). So while the Valley continues
to enjoy a healthy gap with its nearest competitors over the five year horizon
– second-place Singapore is 17% behind, Tel Aviv lags by 21% and New York
City by 23% – other hubs, especially the great Asian cities are advancing,
thereby confirming the shift towards a more multipolar technology world.
Fifth-placed Shanghai increases its share by 2% (vs. 2023’s figures), to 24%,
Beijing (up 4 to 23%) leapfrogs London (up 1 to 22%) to take sixth spot, while
Seoul (up 2% to 20%) and Tokyo (down 1% to 17%) also make the top 10.
Overall, there are five Asian cities in the top 10, vs. three U.S. hubs
(the third being Boston).

2024: Most Innovative Hubs/Cities Today vs. Five Years From Now

Amsterdam
Toronto 9% 13%
7% 11% London
23% 22% Berlin
Seattle 16% 15% Beijing
12% 12% Boston Paris 15% 23%
14% 15% 9% 11% Tokyo
Silicon Valley
66% 48% New York City 18% 17%
31% 25% Tel Aviv Seoul
Los Angeles 31% 27%
12% 11% Washington D.C. 13% 20%
4% 6% Shanghai
San Diego
4% 6% 18% 24%
Singapore
Chicago
4% 6% 31% 31%

Sydney
5% 9%

Today In 5 Years
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State of Innovation
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Most Innovative Hubs/Cities Today

2023 2024 2023 2024 2023 2024

Silicon Valley 63% 66% Beijing 12% 15% Sydney 4% 5%
New York City 29% 31% Boston 17% 14% Washington D.C. 5% 4%
Singapore 29% 31% Seoul 14% 13% Chicago 5% 4%
Tel Aviv 38% 31% Seattle 11% 12% San Diego 4% 4%
London 26% 23% Los Angeles 11% 12% Other 19% 20%
Tokyo 17% 18% Paris 7% 9%
Shanghai 15% 18% Amsterdam 12% 9%
Berlin 20% 16% Toronto 10% 7%

Thanks in part to the AI boom, Silicon Valley’s prestige has only been burnished over the past year, according to
our survey, with two-thirds (66%) of entrepreneurs and VCs, who could select up to five cities, considering it to be the
leading global innovation hub today, compared with 63% in 2023. Tel Aviv, placed second last year with 38%, falls 7%
to 31% today, where it is joined in second place by New York City (up 2% on last year) and Singapore (also up 2%).
The leading European hub, London, remains in fifth place, albeit slipping from 26% last year, to 23% today.

When looked at from a regional perspective, Silicon Valley is considered the most innovative city across all regions, with
almost three-quarters (73%) of Western Europeans, 70% of North Americans and 65% of those in Asia-Pacific viewing it
as such. Just over half (54%) of African respondents consider the Valley to be the most innovative today, while a similar
percentage (52%) of APAC respondents consider Singapore to be the most innovative.

Most Innovative Hubs/Cities Five Years From Now

2023 2024 2023 2024 2023 2024

Silicon Valley 45% 48% Tokyo 18% 17% Sydney 7% 9%
Singapore 30% 31% Berlin 19% 15% Washington D.C. 6% 6%
Tel Aviv 35% 27% Boston 16% 15% Chicago 7% 6%
New York City 24% 25% Amsterdam 14% 13% San Diego 6% 6%
Shanghai 22% 24% Seattle 11% 12% Other 21% 22%
Beijing 19% 23% Toronto 12% 11%
London 21% 22% Los Angeles 12% 11%
Seoul 18% 20% Paris 11% 11%

Almost half (48%) of entrepreneurs and VCs believe Silicon Valley will still be the world’s most innovative hub five
years from now, with Singapore remaining in second place on 31%. However, respondents in 2024 are significantly
less likely to believe third-placed Tel Aviv will be the most innovative in five years (27%) compared to those in 2023
(35%). Meanwhile, just under a quarter (23%) predict that Beijing will be the most innovative in five years time,
versus 19% in 2023, with both Beijing and Shanghai (24%) edging out London (22%).

Half of those in Western Europe (52%) and North America (56%) believe the Valley will continue to be the most
innovative hub five years from now, while just 39% of respondents in Africa and 35% of those in LatAm agree.
41% of those in APAC believe that Silicon Valley will still be the most innovative, while the same percentage of
APAC respondents believe Singapore will be on a par with the Valley in five years. 35% of North Americans
predict New York City will be the most innovative in five years, with 30% checking Tel Aviv.

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Techstars 2024
State of Innovation
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VII.
Innovation by Region:
North America
Surging

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Techstars 2024
State of Innovation
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U.S. set to see the greatest

spike in new startups, as
Africa eclipses Europe
The Techstars Take:
Last year, 32% of respondents predicted that APAC would create the most
new startups globally, ahead of North America with 22%. Thanks to an AI-
fueled investment frenzy, $11B in federal government cash pouring into
chips R&D and the dominance of U.S. tech giants like Nvidia, Microsoft and
Alphabet, North America turned the tables and is once again in the driving
seat with 29% (up 7%, year over year) of respondents forecasting it will create
the most startups this year, while APAC slips by 5% to 27%. But a surging U.S.
is only part of the story. With 17% of entrepreneurs and VCs (up 1% year over
year) believing that Africa will see the largest number of new startups this
year, the continent looks set to outperform the other rising regions, including
the Middle East (up 1%, to 8%), LatAm (up 2% to 8%) and Eastern Europe
(down 4% to 4%). Tellingly, nearly three times as many respondents predict
that Africa will produce the most startups this year compared to Western
Europe (down 4% to 6%), despite the latter hosting 20% of the survey’s
participants compared with Africa’s 11%.

North America provides entrepreneurs with an ideal ecosystem to build thriving

tech businesses by providing access to high quality mentorship. The lessons
learned from both failure and success of building incredibly ambitious companies
is readily accessible here. This institutional knowledge further attracts capital
investments, a risk-taking culture, and the brightest minds in the world. This
mentorship is in short supply globally.

Mina Mitry, Co-Founder & CEO of Kepler Communications

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Techstars 2024
State of Innovation
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Region Expected to See Greatest Spike in New Startups

29%
North America 22%
27%
Asia-Pacific 32%
17%
Africa 16%
8%
Middle East
7%
8%
Latin America 6%
6%
Western Europe
10%
2024
4%
Eastern Europe
8% 2023

0 10 20 30 40 50

Of those who believe the Middle East will see the greatest spike, 40% (up from 35% in 2023) believe UAE will lead the
way, while they are significantly more likely to say Saudi Arabia will be in pole position (36%) compared to 2023 (19%).
They are also significantly less likely to say Israel will see the greatest spike in 2024 (14%) compared to 2023 (29%).

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VII.
Methodology &
Respondent Profile

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Techstars 2024
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Survey Administration & Survey Sample

࡟ The survey was administered online by Hanover Research in March 2024, and respondents were recruited
via contact lists provided by Techstars.
࡟ The analysis includes a total of 1,550 respondents following data cleaning and quality control.

Respondent Qualifications Age

࡟ Age 18+
࡟ Work or be involved in the following:
‐ Currently, or previously, an entrepreneur/work 20% 32%
at a startup 55+ 18-34
‐ Planning on/aspiring to work for create their
own startup
‐ Work in venture capitalism
‐ Be a part of a startup ecosystem of mentors, 48%
investors or commercial partners 35-54

Entrepreneur Status

Entrepreneur 64%

Past Entrepreneur 40%

Aspiring Entrepreneur 38%

Venture Capitalist 23%

Geography

US Region World Region

Western Eastern Europe 4%

19% North Europe
20%
Northeast America
36% Asia-Pacific
11%
38% Africa
West 11%
15%
Midwest
LatAm Middle
8% East
28% 3%
South

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Company Revenue Number of Employees

7%
19% 2% 8%
2%
39%
4%
12% 4% 52%
4%
8%
16%
7% 15%

$0 to $99,999 Less than 10 250-499

$100,000 to $499,999 10-24 500-999
$500,000 to $999,999 25-49 1,000+
$1,000,000 to $4,999,999 50-99 Prefer Not to Respond
$5,000,000+ 100-249
Prefer Not to Respond

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in 60+ Countries

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