Need Funding? 2015 Is A Strong Year For Startups

David S. Rose
David S. Rose , Founder and CEO , GUST INC.
30 Jul 2015

2015 is shaping up to be a strong year for the startup and early stage investor ecosystem. Total startup funding applications are up across the globe and in multiple sectors, especially in the United States where the surging New York City tech industry is leading a nationwide growth in new startups.

Coming out of the second quarter of the year, the total number of entrepreneurs submitting applications for funding from early stage investors is up 26% compared to the first quarter of 2015, and up 20% compared to Q2 2014. Looking at the stages of the companies making funding requests, those in the Development Stage and with a Full Product Ready lead the pack of applications, making up 43% and 39% of the total applications submitted. However, compared to Q1 2015 there was also a 32% increase in applications coming from startups that are in their Revenue Stage, indicating that growth is coming from real entrepreneurs with real companies, and is not just aspirational.

Recent reports of growing consumer confidence also correlate with a surge in the types of companies seeking funding. In Q2 2015, startups in the Consumer Products & Services industry submitted 62% more startup funding requests than over the same period in 2014, and 53% more than in Q1 2015, making it the fastest growing sector, representing 15.9% of all applications submitted. Internet Web Services, the lead industry in Q1 2015, came in at the number 2 spot, comprising 13.7% of total startup funding applications.

In Q2 2015, the FinTech industry saw the greatest increase in total startup funding applications, more than doubling compared to the same quarter in 2014 and up 60% over Q1 2015. This seed stage activity mirrors the fast developments in areas like digital payments, blockchain-based infrastructure and innovation in consumer banking. In the last year, major players including Apple AAPL -0.48%,Google GOOGL +0.57%, and Samsung have invested significant resources in their digital wallet products – like Samsung’s acquisition of LoopPay and Google’s acquisition of SoftCard last February. A significant number of startups in international financial capitals including New York and London are entering the field, giving traditionally tech-focused California a run for its money. In Q1 2015, for the first time New York-based startups submitted more applications for funding requests than California based startups. In Q2, that trend continued, with Silicon Alley widening the margin from 0.1% to a whole 4 point lead. Meanwhile, the launch in Q2 of the digital Tech.London platform by London Mayor Boris Johnson and IBM IBM +0.08%, highlighted the growth of the London financial technology sector.

Texas continued in its number 3 spot with a slight increase in total startup funding applications over Q1; 4.3% compared to 4.7%. However several new states have entered the top ten, including Illinois at the number 5 spot with 3.4% of total funding applications, Georgia at number 7 with 2.9%, and Missouri at number 10 with 2.2%. Activity in Illinois, centered on both Chicago and the University of Illinois tech ecosystem, may be a leading indicator of significant growth in that region.

Globally, in Q2 2015, the United States remained in the lead, with American startups submitting 62.5% of total funding application, a 30% increase in applications over Q1. India was a strong follower, with 6.9% of total startup funding applications, while Canada and France nearly tied in application share with 4.5% coming from each country, Australia saw a large boost in startup growth with a 108% increase in total funding applications compared to Q1 2015.

startup funding

This post originally appeared in Forbes.

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This article is intended for informational purposes only, and doesn't constitute tax, accounting, or legal advice. Everyone's situation is different! For advice in light of your unique circumstances, consult a tax advisor, accountant, or lawyer.