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, shares her thoughts on the findings:
“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%.