The Catchiest Startup Statistics for 2019

by Bobby Chernev

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:

  • Between 2012 and 2017, startup funding across all industries worldwide grew by at least 50%.
  • In 2018, slightly over half of small business owners were older than 50.
  • In 2017, Vancouver was ranked the best city in the world for startups.
  • In 2018, there were 145 active companies with an estimated value of over $1 billion in the US.

And a few more:

  • About 90% of new startups fail.
  • The median salary for self-employed individuals with incorporated businesses in the US in 2018 was $50,347.
  • One-third of small businesses in the US started with less than $5,000 in 2018.

Smashing stuff, isn’t it?

Now:

Let’s examine these startup stats in greater detail.

Fascinating Facts

1. Between 2012 and 2017, startup funding across all industries grew by at least 50% worldwide.

(Source: Statista)

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?

2. At $75 billion, Toutiao (Bytedance) – a Beijing-based news and information content platform – was the top valued startup by venture-capital firms worldwide in March 2019.

(Source: Statista)

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:

3. About 90% of new startups fail.

(Source: Failory)

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:

4. 82% of businesses that went under in 2018 did so because of cash flow problems.

(Source: Fundera)

There’s more to cash flow than just the amount of money coming in and out. Timing is of the essence.

For example:

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 a piece of software that can streamline the process and make it shorter (if not less boring).

5. 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.

6. 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?

Startups Far and Wide

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.

7. In 2017, Vancouver was ranked the best city in the world for startups.

(Source: People Per Hour)

Surprised it’s not San Francisco?

Here’s why Vancouver makes sense:

The Canadian West Coast metropolis actually has a lot going for it. It’s consistently ranked as one of the most liveable cities in the world. It offers a high quality of life and abundant access to office space. It also makes it as easy as possible to get a company off the ground. It also possesses some incredibly cool vibes you have to experience for yourself.

The German capital Berlin, a well-known startup-hub, ranked second. Somewhat surprisingly, Manchester came third, ahead of San Francisco, New York, and London.

8. According to business startup statistics, Panama was the best country in the world to start a business in 2017. 

(Source: Business Insider Nordic)

Quite a shocker, isn’t it? Panama defends its reputation as a tax haven, scoring a full 10 out of 10 on the favorability of its tax environment. It is not without its flaws, however – corruption is a particular concern.

Two small but highly developed Western European states which offer tax incentives to new businesses, Luxembourg and Switzerland, came second and third respectively.

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: 

9. At 63%, the information industry had the highest startup business failure rate in 2018, as tech startup statistics show.

(Source: Failory)

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:

Startups in the US

10. The rate at which startups were becoming unicorns in the US in 2018 had increased by 353.1% compared to 2013.

(Source: TechCrunch)

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?

11. In 2018, there were 145 “active unicorns” in the US.

(Source: TechCrunch)

This is crazy:

They were worth a whopping $555.9 billion. The latest data shows it only took the average billion-dollar US startup six years to achieve such status in 2018, down from seven and a half years in 2015.

12. 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.

13. The median salary for self-employed individuals with incorporated businesses in the US in 2018 was $50,347.

(Source: Medium)

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…

14. 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.

15. The value of venture capital investment (defined as temporary equity investment in young, innovative, non-listed companies) in the US in 2018 was $99.5 billion.

(Source: Statista)

This is massive:

The figure is up from $76.4 billion in 2017. However:

16. Less than 6% of all new businesses started in the US in 2018 were funded by venture capital.

(Source: Medium)

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.

17. Healthcare was the strongest industry for US startups in the 2017 survey, with Inc. 5000 companies generating $36.3 billion in revenue.

(Source: Inc.)

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:

Startups in Europe

18. The total number of investments in startups in Europe in the first half of 2017 was 1639.

(Source: Statista)

This figure had nearly doubled in just two years. In the first half of 2016 it stood at only 857.

19. In 2016, 77.7% of European startups were planning (further) internationalization.

(Source: European Startup Monitor)

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.

20. 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.

21. 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.

22. 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 Demographics

Are men or women more likely to dabble in startups?

Let’s find out:

23. 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.

24. 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.

But wait:

Women can be just as successful entrepreneurs as men, if not more so – especially in the US:

25. 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.

(Source: Medium)

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!

What’s New

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.

Now:

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

And finally:

Fun Facts

Are you not entertained? Then try these on for size:

26. In 2018, successful startups are thrice more likely to have a 60-year-old founder than a 30-year-old one.

(Source: Inc.)

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.

27. Entrepreneurs in Brazil comprised 13.8% of adult population in 2016, making it the most entrepreneurial country in the world in 2016.  

(Source: Coupofy)

This stat is one for trivial pursuit. Cameroon was the second most entrepreneurial country, with 13.7% of the adult population.

And the least entrepreneurial: Japan and Italy with 1.3%.

28. As of 2019, Stanford, Harvard, and the University of California are the top three colleges for unicorn founders.

(Source: Factinate)

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.

Wrapping up

Startups have increased in numbers and value over the last few years. So have funding and capital for these types of companies. 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. So, if you fancy catching your very own, these crucial startup statistics will hopefully set you on your way.  

References

  1. Statista
  2. Statista
  3. Failory
  4. Fundera
  5. Entrepreneur Europe
  6. Small Business Trends
  7. People Per Hour
  8. Business Insider Nordic
  9. Failory
  10. TechCrunch
  11. TechCrunch
  12. Small Business Trends
  13. Medium
  14. Small Business Trends
  15. Statista
  16. Medium
  17. Inc.
  18. Statista
  19. European Startup Monitor
  20. European Startup Monitor
  21. Startup Heatmap Europe
  22. Startup Heatmap Europe
  23. Global Entrepreneurship Monitor
  24. European Startup Monitor
  25. Medium
  26. Inc.
  27. Coupofy
  28. Factinate

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