Selective coupling or genuine integration? Startups in the twin transformation

• Genuine twin-transforming startups are rare among 21,000+ new ventures. • Sustainable startups often go digital; digital ones rarely pursue sustainability. • Twin-transformers predominantly offer software or platform-based solutions. • Twin-transformers require more funding rounds than digital-only startups. • Policy must foster deep-tech hardware to enable real twin transformation. Startups actively shape innovation during the twin transformation to sustainability and digitalization. Our analysis of >21,000 ventures reveals that genuine twin-transformers, i.e., startups able to integrate digital and green technologies, are rare and primarily driven by software. While sustainable ventures readily adopt digital tools, digital ventures rarely embrace sustainability. This asymmetry reflects different configurations of complementarities between digital and sustainable technologies, which investor preferences reinforce. Eventually, this may lead to superficial coupling rather than deep integration. To address the issue, we offer targeted recommendations for practitioners, policymakers, and researchers aiming to foster scalable, hardware-based solutions critical for sustainability.