This paper presents an analysis of startups in the digital technology domain from the perspective of the World IP Day 2021 theme, “IP & SMEs: Taking your ideas to market”. As per World Intellectual Property Organization (WIPO)  this theme represents “Critical role of small and medium-sized enterprises (SMEs) in the economy and how they can use intellectual property (IP) rights to build stronger, more competitive and resilient businesses”.
Our analysis takes into consideration some of the key startups actively developing technologies (patents) and/or having products/services related to digital technologies in selected industry sectors. It also tries to highlight influence of Intellectual Property on performance and sustainability of startups in the marketplace.
Importance of IP for SMEs and Startups
European Union conducted a study  recently on “Intellectual property rights and firm performance in the EU” that confirms the strong, positive relationship between a company's ownership of different types of IPRs and its economic performance. For example, SMEs with patent ownership are found to have 36% higher revenue per employees and 53% higher wages; SMEs with registered design are found to have 32% higher revenue and 30% higher wages; and SMEs with registered trademarks appear to have 21% higher revenue and 17% higher wages. Incidentally, it is found that revenue per employee and wage level are two key factors indicating company’s performance.
IP protection enables startups to preserve and exercise unique and differentiated product or service offerings in the competitive marketplace. One of the key success factors for a startup is to keep up with innovative offerings backed by carefully crafted Intellectual property rights such as Patents. Past studies  have established that startups or SMEs with registered intellectual property are more likely to receive funding for product commercialization. Another study  reveals that SMEs and startups that have at least one registered IP are 21% more likely to experience a subsequent growth period, and 10% more likely to become a high growth firm.
One of the key objectives of this analysis is to understand whether the same principle applies to startups as well across prominent geographies.
Analysis and Insights
The Information and communication technology space is buzzing with a large number of startups and a significant number of these startups are related to digital technologies. The scope of this analysis has been restricted to startups in digital technologies such as Artificial Intelligence (AI), Blockchain, Robotics and Augmented Reality–Virtual Reality (AR–VR) in selected industry sectors like Healthcare, Manufacturing, Supply Chain, Retail, etc. The analysis considers startups at the cross section of selected industry sectors and key digital technologies, those founded in the last 5 years (2016 onwards). The analysis also tries to highlight startup trends from the point of view of funding, IP ownership (Patents), geographies (headquarter of startup), startup sustenance (age factor), the traction score, etc. The traction score for a startup is indicative of potential of a startup derived from dimensions such as fund raised, growth rate, revenue, employees, etc.
The study further tries to analyze distribution of startups across geographies and industry sectors, level of funding success across industry sectors, influence of patent on funding across industry sectors, and relative traction score in the marketplace.
Prominent startups are identified from various sources such as Crunchbase, CbInsights, Startus-insights, Tracxn, etc. Patent information has been gathered from free and professional patent databases. This analysis is based on information available in public domain.
In the process of discovery of top 200 startups from different publically available sources for each digital technology, the applicable industry domain and relevant business functions were identified from the list of startups. Figure 1 represents the count of startups in the cross section of digital technologies, industry domain and functional areas.