Do you want to create the next big thing? You must certainly be thinking of launching your own start-up now, whether you are an ambitious entrepreneur or looking to research the startup industry. Our in-depth research highlights some encouraging and overwhelming startup statistics.
This research will dive into different aspects related to startups around the globe and the industry as a whole. Here is something interesting to start you with, There are more than 1183 billion-dollar startups in the world with Tik Tok being one of the most valuable. However, the world of startups is quite risky. 1 in 5 startups fails in the first year and most of them fail due to the unavailability of funds. Let us take a deeper dive now!
Startup Statistics: Key Findings
- ByteDance the parent company of TikTok ranks first in valuation with $180 billion
- ANT group was the world’s most valuable startup in 2021, valued at $125 billion.
- The fastest-growing industry is Agtech and Food, where a 128% increase in funding has been noticed.
- Globally, the startup economy has created more than $3 trillion from 2017-2019.
- 2019 itself has seen more than $1 billion in startups in 84 ecosystems.
- According to Startup Genome, entrepreneurship trends would not be concentrated in any particular ecosystem. In 2018, there were 60 ecosystems, in 2019 it became 150 and today it is close to 300.
- In recent studies conducted by Startup Genome, Silicon Valley ranked first, followed by New York and London in second place and Boston in fourth, and Beijing in fifth. The studies were conducted to find out the top 40 global startup ecosystems.
- Seoul entered the list of the top 10 for the first time from 16 in 2021 to 10 in 2022.
- Helsinki has risen to 20 places high and is now in the 35th position for the startup ecosystem in the world.
- According to CB Insights, there are more than 53 Decacorn startups worldwide. They are private companies with a total valuation of at least $10 Billion.
- During the global recession of 2008, 50 billion-dollar tech startups were founded. The cumulative worth is more than $150 billion.
- Globally, the top 10 cities which are performing in the startup sector have a collected worth of 74% of all startups.
- 81% of American startup owners work overtime.
- Worldwide, a business-to-business solution was provided by 61% of super start-up companies in 2021.
- Whereas, the business-to-consumer solution was provided by only 34% of startups.
Startup Statistics: Who are the Unicorns?
The term “Unicorn” was first used in 2013. This term represents successful ventures around the globe. Basically, a startup is called a unicorn when a private startup is valued above US $1 billion. A few of the main reasons for their massive growth are buyouts, company strategy, and the use of technology.
- The list of Unicorns continues to rise and has doubled from 2020 to 2021. Today, there are more than 1000 Unicorns around the world.
- Asia Pacific got a cumulative valuation of $971 billion, the highest market valuation of worldwide unicorns. North America stands second with $857 billion, followed by Europe with $121.
- A total of 540 companies have become unicorns in 2021 which was 150 in 2020.
- The communication and technological Industry comprises 29.1% of unicorns in Canada and America. More than 15% of unicorns belong to finance, insurance, and real estate. Transport and logistics combine to form 11%. 9% belongs to health and pharmaceuticals and media and advertising has 8 % stakes in the Unicorn sector.
- The total net worth of all Unicorns in the world adds up to 3.7 trillion.
Startup Statistics By Region
Startups face challenges on a daily basis. From building a team to adapting to the changes in the industry. There can be many reasons for a change in the startup ecosystem, it depends on the internal and external factors around the startup. Here are some startup statistics showcasing the top startup ecosystem by region.
- According to the U.S. Bureau of Labor Statistics, startups generated almost 3.5 million jobs across the USA.
- Steel River Group is the largest startup in Canada. Being a construction company it showed the highest growth of around 86%. This was followed by Truearth at 84% and Pinnacle Logistics Solution at 82%.
- In South America, Chile (36.7%) and Ecuador (36.2%) are the most involved country in startups.
- In Asia, India stood first with a participation rate of 15%. Second is South Korea with 14.9%, China(8.8%), and Taiwan (8.5%).
- In Europe, the UK (52.56), Sweden (28.5), and Germany (25.33) are the top countries involved in startups.
- 16% of startups in North Africa and the Middle East were fintech, 14% belonged in the eCommerce sector followed by 10% in delivery and logistics.
- 10 in 10 respondents agreed that Stockholm is a great place to start a business. Oslo comes second followed by Tel Aviv.
- San Fransisco ranked first to be the most favorable city for startups with 88.98 scores, next was NewYork (217.5), London (125.68), Los Angeles (113.88), and Boston (108.10).
- More than 9000 tech startups were founded in New York City. Its ecosystem is worth $189 billion and it ranks just after Silicon Valley Bay Area.
- Research conducted by Statista expects that by 2025, 45% of global revenue will be coming from Asian smart city startups.
- 60% of startups start at home in the USA. This accounts for more than 32.6 million startups in the US alone.
Startup Statistics of Different Sectors
Different sectors also have a major role in the success and failure of a startup. The external factors of a start-up are equally impactful as the internal factors and hence here are some startup statistics enlightening different sectors.
Best Industries to Launch Startups
- Investments that have funded the clean water initiative projects have earned 25% over the last 5 years and have reached $580 million.
- Space Technology startups have a valuation of over 3 billion. SpaceX being the biggest contributor.
- With the rise of violence in different parts of the world, security consultancy services have also felt a strong push. Security services and equipment together are expected to have a combined valuation of 4 billion this year.
- In recent years, the snack food industry has seen heavy demand for gluten-free, organic, and low-calorie food items. The revenue generated from the snack food industry is projected to increase by 5% next year and would thus have a cumulative valuation of $46 billion.
- The clean and beauty sector with a global valuation of $23 billion is also an equally booming industry in 2022.
- Startups that focus on cryptocurrency and blockchain have raised close to 4 billion in the last few years.
- Fintech which has gained success over the years has focused more on continuous user testing as well as on data-driven iteration. Very less attention was given to the use of new technology.
- The global fintech investment is steadily rising since 2018.
- Fintech partnership is valued and implemented by more than one-fourth of startups.
- Average investments in blockchain and cryptocurrency is rising by millions since 2018.
- The USA is the most popular place for Fintech startups and has more than half of the total fintech startups worldwide.
- The cost of customer acquisition is often the most challenging factor in fintech startups.
- Construction startups have the second-highest failure rates.
- North America has the highest number of construction startups which have received more than 1 billion in funding to date.
- In 2021, 87 construction startups got investment deals worth millions.
- They are one of the least digitized startup sectors.
- More than 37% of construction companies do not continue for 5 years.
- Artificial Intelligence is expected to boost the construction industry by 71%.
- Residential housing construction has been on the rise and acts new in this sector.
- Investments done in clean water initiative projects have earned good profits over the last few years.
- The highest startup failure rate of more than 60% is in the tech industry.
- In the tech industry, the US is valued at around 2 trillion and is the largest in this sector.
- The average age of founders who have founded tech startups is 35+.
- On average, 20 tech startups founded in America reach more than $100 million in yearly revenues.
- Wage growth in the technology sector is higher by 20% than in the rest.
- The best industries that define tech startups include- pharmaceutical, semiconductor machinery, electronic manufacturing, and medical device generators.
- Electronic and computer-based startups have seen an 80% boost since 2007.
- Startup ventures that are tech-driven pay double that of the rest of the industry.
Real Estate Sector
- Real Estate based startups generate a lot of wealth every year. In 2019 alone, it generated $1.9 billion.
- Startups focused on Proptech or property technology is currently on the rise.
- Real Estate startups that use AI methods bring huge investments. Zillow brought in $560 million last year.
- Commercial property is what real estate entrepreneurs are interested in the most.
- Real Estate agents are getting a lot of support in their business from small business owners and other professionals.
- So far more than 15 billion were invested in different Proptech companies worldwide.
Startup Statistics: Funding and Investor Facts
Funding plays an important role in the shaping of a startup. Without proper cash flow and capital, it becomes very difficult for startup founders with their own capital to scale up their business prospects.
- According to CrunchBase, in 2021- 8000 startups alone got a cumulative investment of more than $ 210 billion.
- Fintech got more than $121 billion in investments.
- The AI industry attracts more than $25 billion each year.
- In the USA the highest-funded tech startup is JUUL Labs with $18 billion.
- More states in the USA are legalizing the use of Marijuana and thus many startups are focusing on starting cannabis startups. Investors are funding an average of $1.9 billion for this sector as stage 1 investments.
Startup Challenges Faced Around The World
Apart from collecting funds, the biggest challenge faced by startups is hiring talent. Often the candidate and the company do not make a perfect fit and sometimes talents become hard to retain as they too search for better opportunities with higher packages.
- 23% of European startup founders reported that customer sales and acquisition were the most stressful. For 11% retaining and attracting good talents very quite difficult. Innovation and new product design and development were challenged by 10%. Whereas, the rest faced struggles with cash flow and management.
- Competition (20%) from other firms often turns out to be a great threat to many startups in America and Europe. Bureaucracy,(13%) changes in domestic rules and regulations, changes in market conditions(13%), and dependency on investors for cash flow(13%) were other very common challenges.
- Often lack of necessary skills makes the recruitment process more difficult for 28 % of startups. 275 of startups often reject applications as very high salary demands were made from applicants. And often like 11% of startups were rejected by applicants as they choose to work with bigger companies.
- According to a report published by Silicon Valley Bank, in Canada, Uk And the USA, skilled talent is often the issue as they are very difficult to find followed by cybersecurity and privacy to customers.
- Post-pandemic hiring has become more difficult for many as many have become entrepreneurs and have planned to start their very own companies.
Startup Failure Rate Statistics
All startups are not successful. 20% and more startups have been reported to fail in the first year due to financial struggles and poor market fit. Only 2 in 5 startups make a profit the rest either loses money gradually or they make irreparable losses. Around 90% of startups founded fail and that can be due to various reasons. Here are some more detailed insights on the downfall of a business. Check some business failure statistics to understand how.
The main goal of starting a startup is to generate a new business that will slowly start earning revenues and start growing with employment opportunities. This primary goal turns out to be the biggest challenge for most entrepreneurs too. Check out some entrepreneurship statistics for an effective insight into the industry.
Effect of the Covid-19 Pandemic on Startups
- As a result of the pandemic, small startups have laid off 35% of their employees. Check out some more interesting small business statistics.
- More than 40% of startups founded after 2019 have been facing difficulties in cash flow.
- Globally, after covid, the revenue generated has seen a decreasing trend. According to Startup Genome, there have been 72% of startups with lower revenue.
- More than 50”% of companies have a lower revenue of around 40% as an aftermath of the pandemic.
- For smooth functioning, more than 20% of expenses have been cut down by 72% of startups.
- In OECD countries, the severely hit countries in terms of revenue generation from startups due to the pandemic were Portugal (70%) followed by Turkey (58%), France (54%), and Hungary (45%).
- In Asia and Europe, fintech startups faced the highest loss since 2016.
- According to New York Times, the United States will be having an economic growth of more than 6% in the old economic sectors like airlines, banking, energy, etc.
- More than 70% of startup founders highly believe that the recruitment process will be better post-pandemic and new opportunities will pour down in the logistics and service sector.
Startup Statistics: Demographic
Startup founders around the world belong to different gender, ethnicities, race, and religion. So let’s take a look at the different startup demography statistics:
- In America, Stanford has the highest number of startup founders than any other university.
- According to a survey conducted by HBR, the average age of most startup founders is 42.
- Those startups where the founding members have aged below 25 have outperformed other similar startups.
- For VC investors female founders or co-founder has performed 63% better than the rest.
- For female startups, wellness, medicine, and health have received the highest success rate.
Best Countries To Start A Startup
A startup’s success is dependent on many factors, apart from the investment and the strategies, the geographic location also makes a huge difference. There was a survey conducted among 17000 entrepreneurs globally which helped to determine the best places to commence a startup.
These respondents based their rankings on multiple factors like cost of living, easiness of getting funds, transport from major parts of the world, administrative opportunities, and manufacturing costs. Here are the top 10 countries to start your business in 2022 (According to the US news)
- China with a GDP of $17.7 trillion
- India with $3.17 trillion.
- Thailand at $506 billion
- Malaysia with $373 billion
- Indonesia at $1.19 trillion
- Mexico with $1.29 trillion
- Vietnam at $363 billion.
- Philippines at $374 billion
- Brazil at $1.61 trillion and
- USA with 23 trillion GDP.
Note: These rankings are not based on the GDP of the country.
Startup Statistics: Future Trends
Though Silicon Valley is still the core of global startups the trend is very slowly shifting toward the east coast. The list of Unicorns is also expected to rise drastically each year and it would be no more trending news. New technology is expected to arise to fill the shortcomings faced by various startups. Personalized marketing will be the new norm and will give more success to new startups.
More startups are expected to rise in the technology sector as financial distress is quite less. People would subscribe to beauty, food, apparel, and lifestyle-related startups more. At present, many startups close due to a lack of funds. Shortly, many startups would start to collaborate and be operated on a partnership basis. More startups are expected to open by college pass outs.
There is also a new trend where people go into a gig which means they might be working as a freelancer and working with other organizations for a short term. There are many forms of work that are defined as a gig. Here are some gig economy statistics to explain more about it.
A startup’s failure or success depends on several factors. Thus startup statistics differ all over the world. Experts often say that the best way to learn about entrepreneurship is to have a startup. The knowledge you learn from your mistakes helps you bring a strong foundation to your company. We have provided you with various details related to startup statistics that will help you in your decision-making process. In order to be at the top of this startup pyramid you must understand your strengths and act accordingly in the correct space.