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Startup Trends: Which Newcomers to Watch in 2016

What startup trends can we expect in 2016? Digital Insights peers into the future.

09 Dec. 2015 Daniel Hüfner

The list of unicorns – startups valued at a billion dollars or more – is constantly expanding. Take a good idea, implement it smartly and disruptively, keep the customer’s point of view perpetually in focus, and a rapid rise seems to be almost a given. More than 350 startups are expected at the next CeBIT, most of them at SCALE11 in Hall 11, the new startup platform for CeBIT in Hannover, Germany. What trends can be detected in the market for young companies?

Insurtech: Revolution in the insurance industry

2016 will see startups take on classic insurers. (Photo: Clark)

Experts from business and politics have been predicting a digital revolution in the health care industry for years now. While doctors and patients continue to wait for a big breakthrough that affects them, the antiquated insurance industry itself stands on the cusp of radical change. Working under the catch phrase 'Insurtech,' a portmanteau of 'insurance' and 'technology,' a growing cadre of startups are pursuing good ideas to shake the marbled foundations of those companies.

The magic word is democratization. Because down the road where, when and especially how and at which conditions we buy our insurance policies will be decided with the help of smart apps, online platforms and wearables. The tools beings offered include transparent price comparisons, automated policy finder tools and of course simpler, quicker and better customized closing of the insurance policies themselves. One convincing vision of how this might work comes from a US startup named Oscar , which offers insurance for the digital age — and boasts 300 million USD in start-up financing. Similarly promising startups certainly exist elsewhere; consumers in Germany for example can check out options such as Treefin , GetSafe , Knip and Clark .

Electromobility: Clean transportation as a business model

Startups are filling the gap where governments have failed: electromobility. (Photo: Ubitricity)

It's noteworthy that the German federal government had to invite a man like Elon Musk to Berlin to lecture them that Germany should be building more electric cars. No question: politics and the car industry have failed to cover much ground with "Electromobility," treating it as a self-imposed prestige project. A million electric cars by 2020? No way! Fortunately startup culture looks instead to figures like Tesla's founder for a vision of a smarter, cleaner mobility for the future.

Berlin startup Unumotors for example has developed Vespa-style electric scooters with portable batteries. And eMio , also from Berlin, is making electric scooters available through a city-wide scooter-sharing network. And then there's Ubitricity : the Berlin startup with 5.4 million euros in financing wants to turn standard street lamps into charging stations for electric vehicles. Given the rising gas prices and advancements in battery technology — Tesla is planning to build its own factory in Germany — mobility in 2016
seems to be picking up more speed than ever.

Bitcoin: the race for the Blockchain is just beginning

Startups see tremendous opportunity in the Blockchain technology behind Bitcoin. (Photo: Shutterstock )

FinTech startups using clever apps to make life difficult for old-fashioned banks? Yesterday's news at this point. Given the progress being made by admired startups in the US and beyond, such as Number26 in Germany, there's no point in talking about a 'trend' any more.

The more interesting developments surround the formerly much-ballyhooed crypto-currency Bitcoin: Blockchain technology, which serves as the backbone for the currency, is increasingly emerging as the foundation for innovative business models . The technology allows for rapid, secure and affordable data transfer between two parties, eliminating the need for a third instance such as a bank.

PwC sees roughly 300 startups , mostly in the US and Great Britain, working on ideas for harnessing Blockchain to offer financial services. This is also reflected in the flow of venture capital: it's been reported by Bitcoin info platform Coindesk that some 462 million USD in venture capital flowed to startups between January and September of this year.

Virtual Reality: from the playroom to everyday life

Virtual and augmented reality applications no longer kids' toys. (Photo: Shutterstock)

Virtual and augmented reality applications may long has been mocked as toys for geek gamers, but companies such as Google, Microsoft and Facebook are now using the technology to make their products more interesting to the broad mass of consumers. When even Apple recently felt it necessary to acquire two European startups, Metaio and Faceshift , for significant chunks of cash, it's clear that this area has grown out of its baby shoes.

Startups see a diverse range of business opportunities on both the hardware and software sides. The most interesting new companies for example include Magic Leap , which has received co-financing from Google, Blippar and Germany's Itizzimo , which was declared as the 'Next Global Player' at the Pioneers Festival. While this topic will continue as one of the hot topics for 2016 as well, there is also a growing interest by companies for applications in the logistics,
foods, automotive and medical fields.

PropTech: startups wake up to the real estate boom

Deregulation and new laws have given startups a vector to enter the real estate industry. (Photo: Shutterstock)

The real estate industry has typically been viewed as a place for institutional investors and wealthy private parties to build on their riches. Change is gradually underway, however, because the crowdfunding movement has made it possible to break up some of the longstanding hegemony among real estate traders. Platforms such as Exporo and Home Rocket offer small investors the option to take part in local real estate projects, democratically and with strong prospects for good returns.

This startup area has been dubbed "PropTech" but goes well beyond classic crowdfunding. Because residential space in the cities is growing ever scarcer and expensive, startups continue to look for innovative solutions. Zoomsquare was founded a year ago to simplify the search for suitable real estate by comparing data from internet ads with the user's desires based on algorithms more familiar from dating apps. Recent changes to German law that have shifted agent commissions from buyer to seller have also induced new business ideas: startups like Coozzy , WunderAgent , Vermietster , McMakler and Vendomo are just a few examples. The rising popularity of virtual reality is also noteworthy. Just think: virtual apartment viewings.

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