Last Updated: June 15, 2020
The world of startups is booming. From healthcare to shared apartments, they’re taking over the world.
In fact, at times you might feel overwhelmed by too much information.
That’s why we’ve gathered the most valuable startup statistics in one place. By the end of this article, you’ll have a clear view of the big picture. Here’s a taste:
Eye-Opening Startup Statistics
- About 90% of new startups fail.
- Bytedance is the top valued startup, valued at $75 billion.
- In 2020, 65% of UK adults want to start their own business.
- In 2019, Berlin was ranked the best city in the world for startups.
- In 2020, there are about 475 unicorn companies.
- The median salary for self-employed individuals with incorporated businesses in the US was $50,347.
- One-third of small businesses in the US started with less than $5,000.
Smashing stuff, isn’t it?
Let’s examine these startup stats in greater detail, starting with the newest startup stats for 2020.
Impressive Startup Statistics for 2020
2020 is an interesting year, no one can deny that. But what do all the recent changes mean for startups?
1. January 2020 experienced the highest number of searches for ‘how to start a business’, startup statistics in 2020 show.
(Source: Micro Biz Mag)
In fact, this is the highest search volume since records started back in 2004 in the UK. Specifically, the number of searches made per month is 18,100.
2. In 2020, 65% of adults in Britain wanted to start their own business according to startup statistics for the UK.
(Source: Micro Biz Mag)
This was according to a survey of 1,000 UK adults done in January 2020. Aside from those two-thirds, 21% admitted to not wanting to start their own business, while 14% were unsure.
3. Startup statistics for the US tell us that 43% of their workforce is likely to be freelance by the end of 2020.
(Source: Fresh Books)
It would appear that the trend is that more and more people are going freelance, particularly in America. One big reason is that new technology is now readily available to support remote working. This is good news for companies who can massively cut their overheads.
4. Just over 50% of UK startups report that lack of finance is a barrier to starting a business.
This was based on startup financing statistics data collected from over 3,000 people through the Startups.co.uk website. The second biggest barrier reported in these startup funding statistics was knowledge (17.7%) followed by confidence (9.4%), legal (5.3%), ideas (4.4%), time (3.2%), and finally, customers (2.9%).
5. Accounting, tax preparation, bookkeeping, and payroll have a net profit margin of 18.4%.
(Source: Hustle Life)
So, if you’re thinking about starting up a business, and wondering which sector could be most profitable, startup growth statistics put a huge focus on those. Alternatively, you could also look into legal services or real estate. Should you choose the latter, you’ll need the best tools to do it. That’s why we selected the best real estate software on the market.
6. Oil and gas extraction industries have a net profit margin of -6.9%.
(Source: Hustle Life)
This makes them the worst type of startup industry based on the net profit margin. Similarly, software publishers, beverage manufacturing, semiconductor, and other electronic component manufacturing are among industries with a disappointing net profit margin, based on startup company statistics.
7. According to 52% of US small-business owners, venture capital is expected to be their next source of funding.
(Source: Hustle Life)
Money is crucial when setting up a small business. It seems that most business owners in the US will gain funding from venture capital, startup fundraising statistics show. And because around 65% of small business owners say they don’t have the right budget to get their startup rolling, it could be vitally important to access this type of funding.
8. 672,890 new companies incorporated in the UK by the end of the 2019 tax year.
Considering the Brexit uncertainty faced in the UK between 2018 and 2019, plus the startup risk statistics that go with this, people have still remained confident enough to set up their own businesses. Although some may not be turning over what they want at the moment, it goes to show that entrepreneurial spirit in the UK is still very much alive.
9. 82% of successful business owners say they have the right level of experience and qualifications.
(Source: Small Biz Trends)
The most successful entrepreneurs tend to have a good level of self-confidence. Startup statistics for entrepreneurs confirm it: 82% of them say that their level of qualifications and skills are sufficient to run a business, even if they lack a steady cash flow at the beginning.
10. According to worldwide startup statistics, Bytedance was the top valued startup, valued at $75 billion.
If you’re wondering who Bytedance is, they created ‘TikTok’, the short video app as well as news aggregator service Toutiao. Technology startup statistics for venture capital firms indicate they are valued at $75 billion – one of the highest-rated startups around the world.
Startup Funding Statistics
As we all know funding is the second most crucial factor for a successful startup, after having a great idea for one in the first place. That’s why we gathered some startup funding stats to show you what the market looks like.
11. Between 2012 and 2017, startup funding across all industries grew by at least 50% worldwide.
Investment in startups has become very popular in recent years. Why?
More and more investors are realizing that supporting the right startup could result in a massive windfall.
Some industries benefit from this more than others.
Industries, like advanced manufacturing and robotics, for example, reported nearly 1,400% more funding in 2017 than in 2012. The total funding for AI startups also grew from $1.7 billion in 2013 to over $15 billion in 2017. How’s that for startup funding stats?
12. At $75 billion, Toutiao (Bytedance) – a Beijing-based news and information content platform – was the top valued startup by venture-capital firms worldwide in December 2019.
This is just one of the plethora of successful startups, based in China. Toutiao was followed closely by the San Francisco-based transportation network company Uber, valued at $72 billion. Didi Chuxing, another Beijing-based startup specializing in ride-sharing, AI, and autonomous technology — comes third with its valuation at $56 billion.
How impressive is that?
Are you thinking about quitting your boring 9-to-5 job and launching your very own multi-billion dollar startup?
Please tread carefully:
13. About 90% of new startups fail.
Different sources claim a different figure here, so keep in mind this is a ballpark estimate. Of course, we mostly hear about the ones that make it big.
Failure rates vary over time, but the bottom line is:
Very few startups survive in the long run.
And just in case you’re wondering what percentage of new businesses fail in the first year…
The answer is approximately 20%.
But why do so many startups sink without a trace?
The market is extremely competitive, and there are plenty of reasons why your startup might go the way of the dodo.
Let’s look at some of the more commonly cited ones:
14. 82% of businesses that went under in 2018 did so because of cash flow problems.
There’s more to cash flow than just the amount of money coming in and out. Timing is of the essence.
If you use an invoicing system, and your invoices aren’t paid until after your loan payments are due, that startup failure rate might become all too real for you.
As boring as it sounds, preparing and analyzing the cash flow statements can be key. And, if you can’t be bothered, at least hire a bookkeeper. Or get accounting software that can streamline the process and make it shorter (if not less boring).
15. 42% of businesses that failed in 2018 listed a lack of market need as a contributing factor.
(Source: Entrepreneur Europe)
There’s a process to coming up with the next groundbreaking product or service to sell. If you don’t respect it… well, the market will look elsewhere.
Yet another micro-blogging platform probably won’t make it big because the market is saturated. Neither would another “revolutionary” cordless vacuum cleaner. You’ll have to think outside the box. Startup failure rate statistics show you’ll be in an elite club if you do.
Businesses also blamed a whole bunch of other factors for their demise – some more obvious than others. Startups also face issues with strong competition, bad core product, bad timing, intra-team conflicts, and lack of passion.
As they say, hindsight is 20/20.
There’s some good news, though:
If you’re willing to rise to the challenge, it’s never too late to start your own business.
16. According to startup statistics for 2019, 51% of small business owners are older than 50.
(Source: Small Business Trends)
Another 33% are in the 35-49 age bracket, and only 16% are under 35.
Essentially this means you are allowed to have one (or a few) failed attempts early on. You can still be successful later in life.
It gets even better because:
In the immortal words of Shakespeare, the world is a stage (for startups as well).
Shall we have a look?
Startup Statistics by Country
Here we’ll examine some of the key startup trends worldwide. We’ll begin with a couple of general startup stats before zooming in on the US and Europe. We’ll wrap up this section with a couple of demographics statistics.
17. In 2019, Berlin was ranked the best city in the world for startups.
Surprised it’s not San Francisco?
Here’s why Berlin makes sense:
The German capital has a lower cost cost of living. It’s consistently ranked as one of the top 15 most liveable cities in the world. It offers a high quality of life and abundant access to office space. At the same time, it’s diverse and oriented towards innovations. Entrepreneurs can find funding relatively easy.
Tel Aviv in Israel, the home of world’s most innovative startups, ranked second. Somewhat surprisingly, Helsinki came third, ahead of San Francisco, Stockholm, and London.
18. According to business startup statistics, Great Britain was the best country in the world to start a business in 2019.
Not all that surprising, right? London, Manchester and Edinburgh have long been considered startup hubs. While the costs of managing a business in the UK shouldn’t be underestimated, you’d also be “closer to the money”. It’s not a coincidence that one-third of European venture capitalists reside in the UK.
Germany and Estonia came respectively second and third in the list.
Now that you know which cities and countries offer favorable conditions for new startups, you’re probably wondering:
“Which industries are the most profitable?”
Let’s start with some of the riskier options:
19. At 63%, the information industry had the highest startup business failure rate in 2018, as tech startup statistics show.
This is partly due to its popularity. In many ways, it’s become a victim of its own success.
There are a lot of information startups out there, many of them based on extremely flimsy premises.
Construction had the second highest failure rate with 53%. And the lowest?
Finance insurance and real estate had the lowest failure rate of surveyed industries with 42%. However, that’s still nearly one out of every two startups.
Moving on to:
Startup Statistics for the US
20. The rate at which startups were becoming unicorns in the US in 2018 had increased by 353.1% compared to 2013.
The weird term “unicorn” refers to startups valued at over $1 billion. When Aileen Lee, a former Kleiner Perkins partner, coined it in 2013, there were just 39 companies that merited the title.
So, how many are there now?
21. In 2020, there were 475 “active unicorns” in the world.
(Source: CB insights)
This is crazy:
They are worth a whopping $1.394 trillion. The latest data shows it only takes the average billion-dollar US startup six years to achieve such status. That number is down from seven and a half years in 2015.
22. One-third of small businesses in the US started with less than $5,000 in 2018.
(Source: Small Business Trends)
Another 58% started with less than $25,000 in startup funds. However, 65% of survey respondents admitted to not being fully confident they had enough money to start their business.
23. The median salary for self-employed individuals with incorporated businesses in the US in 2018 was $50,347.
This compares favorably with the median household income in the US, which was $61,822 in 2018. However, self-employed individuals tend to have a lot of extra expenses, which helps explain why…
24. 69% of US entrepreneurs started their businesses at home in 2016.
(Source: Small Business Trends)
Plenty of startups begin at home. Co-working spaces have also become increasingly popular over the last few years. They give entrepreneurs a cheaper way to have an office, as well as some other benefits.
25. The value of venture capital investment (defined as temporary equity investment in young, innovative, non-listed companies) in the US in 2019 was $136.5 billion.
(Source: PR Newswire)
This is massive:
The figure is up from $76.4 billion in 2017. However:
26. Less than 6% of all new businesses started in the US in 2018 were funded by venture capital.
This should come as no surprise, given how competitive the market is at the moment. If you want to attract funding, you must be at the top of your game.
27. Healthcare was the strongest industry for US startups in the 2017 survey, with Inc. 5000 companies generating $36.3 billion in revenue.
The Inc. 5000 is an annual ranking of the fastest-growing private companies in the US. It featured 380 healthcare companies in 2017. With a total of $15.1 billion in revenue, the 236 financial services startups came second. Clearly, healthcare in the US continues to be one of the best startup industries as well as a politically loaded issue.
But let’s not get bogged down in politics. Instead, let’s look across the pond and focus on:
Startup Statistics for Europe
28. The total number of investments in startups in Europe in the first half of 2019 was 2301.
This figure had nearly doubled in just three years. In the first half of 2016 it stood at only 1214.
29. In 2018, 88% of European startups were planning (further) internationalization.
How do you succeed in startups if your domestic market is small? The answer – if you’re in Europe at least – is to look for greener pastures. Thanks in part to the larger number of investments, more and more European startups are planning to hire foreign specialists and expand abroad.
30. More than 90% of European startups rated their business situation in 2016 as good or satisfying.
(Source: European Startup Monitor)
This shows a massive difference from the doom and gloom of the 2007-2008 global financial crisis and its immediate aftermath. Back then, business confidence was at an all-time low, and forecasts were dire. Now, the relatively slow, but steady Eurozone economic growth rates are contributing to positive small business trends.
31. In 2018, 64% of European startup founders stated they would choose Europe over the US if they had to start over again.
(Source: Startup Heatmap Europe)
The percentage is highest in the Benelux countries (nearly 85%) and lowest in the UK & Ireland (just under 50%). European startup founders consider talent and value for money to be Europe’s major strengths compared to the US.
32. In 2018, 60% of European startup founders stated that they had traveled to the US at least once for their current startup.
(Source: Startup Heatmap Europe)
This ties in with European business owner’s desire to expand internationally and create more startup jobs around the world. The widely-held belief that the American entrepreneurial spirit is second to none also contributes to this growing trend.
Startup Demographic Statistics
Are men or women more likely to dabble in startups?
Let’s find out:
33. There are only 7 women entrepreneurs for every 10 men entrepreneurs worldwide in 2019.
(Source: Global Entrepreneurship Monitor)
In fact, there are only six countries (Indonesia, Thailand, Panama, Qatar, Madagascar, and Angola) that have equal TEA (total early-stage entrepreneurial activity) rates among women and men. These countries are all in the developing world.
34. According to startup statistics, only 14.8% of European startup founders in 2016 were women.
(Source: European Startup Monitor)
This stat demonstrates the huge gender gap in European startups. There are complex social, cultural, and economic reasons for this.
Women can be just as successful entrepreneurs as men, if not more so – especially in the US:
35. 9 of the 21 co-founded startup companies in the US, which earned more than $20 million in annual revenue in 2018 had an all-female co-founding team.
The remaining 12 had male/female co-founders. None had an all-male co-founding team!
Here’s looking at you, female startup co-founders!
So, what’s the latest news from the world of startup stats?
We’ve already mentioned that several startup-hubs, such as Vancouver and Berlin, have successfully challenged Silicon Valley’s dominance over the last couple of years.
A growing number of startup founders are leaving the Silicon Valley “bubble” and heading east. Cities like New York offer a skilled workforce, easy access to investors, and proximity to finance and retail industries. This is something else to consider when you’re deciding where to launch your would-be billion-dollar startup.
Speaking of which:
Here’s a list of seven such companies you should keep an eye on, complete with their estimated market value as of March 2019. It makes for some impressive startup statistics:
- Health Catalyst – healthcare analytics platform – $1 billion
- Nuro – autonomous delivery vehicles – $2.7 billion
- Flexport – freight logistics platform – $3.2 billion
- Horizon Robotics – artificial intelligence technology – $3 billion
- Danke Apartment – apartment rental platform – $2 billion
- Chime – mobile banking platform – $1.3 billion
- Glossier – online beauty brand – $1.2 billion
Startup Fun Facts
Are you not entertained? Then try these on for size:
36. In 2018, successful startups are thrice more likely to have a 60-year-old founder than a 30-year-old one.
But there are even more curious startup statistics on the subject:
He or she is also 1.7 times more likely to found a startup that ends up in the top 0.1% of all companies! Experience matters. Having a smashing idea is all well and good, but having the know-how to execute it can make all the difference.
So, if you were thinking to yourself:
“That (startup) ship has sailed.”:
Think again – you’re never too old to join the growing number of entrepreneurs who own profitable startups.
37. Entrepreneurs in Ecuador comprised 30% of adult population in 2018, making it the most entrepreneurial country in the world in 2018.
This stat is one for trivial pursuit. For comparison, in the US “only” 14% if the population are entrepreneurs.
38. As of 2019, Stanford, Harvard, and the University of California are the top three colleges for unicorn founders.
It’s never too late to get a college degree – and these three leading universities will provide the perfect setting for any budding entrepreneur. Mark Zuckerberg came up with Facebook (originally The Facebook) as a freshman at Harvard – and he never even graduated! The rest, as they say, is history.
While a handful of juggernauts like Uber dominate the headlines, there are many other rising stars. Unicorns are no longer as elusive as they once were.
Startups have increased in numbers and value over the last few years. So have funding and capital for these types of companies. The market is offering a great set of automation tools, which come in useful especially for startup business’.
With the right approach and carefully selected tools, you might be the next Uber.
So, if you fancy catching your very own, these crucial startup statistics will hopefully set you on your way.
Startup success rate statistics tell us only about 10%. The rest tend to fail.
Startup statistics for Europe tell us that in the UK alone, 672,890 startups were formed in the last tax year.
Both startup statistics on business failure and startup survival rate statistics show that approximately 20% of startups fail in the first year.
E-commerce, chrome extensions, mobile apps, and SaaS companies of all sizes are the most profitable startups according to startup valuation statistics.