The Ultimate List of Startup Statistics for 2022
Startups drive innovation and economic growth across the world, but they are risky. Yes, planning and hard work is just a teeny bit of what goes into turning an idea into a billion dollar company.
These startup statistics discuss the startups worldwide — the successes, the failures, the investments, and more — to help you better understand the startup industry and learn about startups in numbers.
Interesting Startup Statistics
- 9 out of 10 startups fail, a misleading startup statistics in the context of startups because these figures focus on all new businesses, both startups and traditional businesses (like a hair salon).
- 69% of all successful startups start from home, 59% choose to operate even when they have enough cash
- Only 40% of startups become profitable, only 9% of startups survive ten years.
- 30% of future unicorns operate in enterprise/big data tools
- A startup founder who is 40 years old is 2.1x more likely to start a successful venture than a 25-year-old.
- Less than 1% of startups get venture capital investment.
Startup Statistics: General Facts
1. The United States is the leading country by the number of startups, followed distantly by India.
The US has a very positive climate for start-ups, which is why it takes the lead with 70,966 startups.
As can be seen, the US startup figures are monumental compared to the rest of the world. In fact, the US has 3x more startup teams than the rest of the following nine countries in the world.
But it doesn’t end there; the US also stands top in other firsts, like the most startup-friendly country, and startup investments relative to population. For instance, venture capitalists poured US$ 270 billion into US startup companies over the last couple of years—averaging out to around $800 per person.
India stands second with just 12,842 active startups. Fastly developing future technology in India, such as Robotics, AI, and IT, IoT, and the fact that it is one of the best countries for doing business can explain why it ranked second.
2. Ant Financial is the most valuable unicorn startup in the world, valued at about US$ 200 billion.
A unicorn is a startup worth over a billion dollars or more. As of December 2021, there are over 900 unicorns globally. Collectively, the 900 unicorns are worth over US$ 3 trillion; about 75% of the 900 unicorn companies have joined the one-billion market cap in the last three years.
Ant Financial, a Chinese fintech company that spun off from Alibaba’s Alipay, is the highest valued startup unicorn global, followed by ByteDance (Toutiao), worth over US$ 140 billion.
Although the top two highest-valued startups are from China, the US holds the leading unicorn share; more than half (51%) of all unicorns are from the US. China, in second place, is home to only 18.1% of unicorn startups in comparison.
3. About ⅕ of all startups operate in the fintech industry
20.1% of all startups globally operate in the fintech (financial technology) industry. Even in the top 10 highest-valued startups worldwide, Ant Financial from China, Stripe from the US, and Paytm from India are fintech firms.
Across the world, there are over 12,000 fintech startups and 5,779 in the U.S.
Seeing the emerging fintech startups and new innovations, 88% of established financial giants believe that a part of their business will be overlooked by the standalone fintech companies in the next five years.
eCommerce is another primary market in which 10.9% of all startups operate. In 2021, retail e-commerce sales amounted to approximately US$ 4.9 trillion, with rapid growth expected in the future; no wonder why eCommerce is a popular industry for new startups. And given the technological advancements, anyone can start a profitable online store and institute a successful startup, the number of startups in eCommerce is likely to rise.
The internet software & services come next, with 18.7% of all startups representing internet services, followed by artificial intelligence, representing 7.8% of all startups in the world.
4. 69% of all successful startups start from home, 59% choose to operate even when they have enough cash
(Small Biz Trends)
Google, Apple, and Disney are not the only companies that started from home. As much as 69% of all active startups are home-based small businesses.
Starting at home isn’t just an attractive choice to walk into the shoes of giants; instead, it is necessary because startups at the beginning lack enough funding to cover office costs.
Startups, by nature, have high costs and low revenues; so, starting at home helps entrepreneurs minimize costs.
5. 61% of startups globally offer B2B solutions, whereas the other 39% offer B2C solutions.
Although it is the customers that love novelty — thus, more lucrative, most super startups, despite the risk, are B2B oriented.
Businesses evaluate B2B products like the best CRM tools based on return on investment. The tools they use must bring profitability, cost reduction, time-saving, productivity, sales, or customer satisfaction that comes with the enterprise software. Yet, 69% of all new businesses focus on selling products or services to other companies.
6. 36% of all startups do not currently have a website. 35% of these small businesses believe they do not have enough capital to build a website.
Even in the digital age, 36% of all small businesses do not have a website; in case you are starting a small business, it is best not to walk in their shoes. Because a website is critical for a startup's success, almost 75% of customers judge a company for the quality of its marketing website. Creating a website is not difficult these days, and building a personal brand is almost impossible without an online presence.
Moreover, you do not have to be like the 35% of small businesses that say they are not well established to build a website. As you can utilize the best website builders, get a free domain name, choose the right hosting services, and launch a successful online business for as little as US$ 500.
Startup Success Rate Statistics
7. Previous successful business owners have a 30% higher chance of success with their next startup
(Skill vs. Luck in Entrepreneurship)
While many may think that a successful startup is all about luck, evidence from serial entrepreneurs reveals that success has more to do with skill.
Because a proven track record helps them raise startup funding for their next venture efficiently, as well as venture capitalists do not try to protect themselves with tighter control provisions. Additionally, the proven track record them have more favorable board control, vesting, liquidation rights, and more up-front capital.
In contrast, startup owners with no industry experience only have an 18% chance of startup success.
8. Founders who failed previously have a 20% chance of succeeding versus an 18% chance of success for the first time founders
(Skill vs. Luck in Entrepreneurship)
This is one of the most counterintuitive startup statistics. But small business statistics of the past decade show that founders who have failed at a prior business have a 20% chance of succeeding because the founders have derived valuable lessons from their failures. In addition, new founders have only an 18% chance of success.
Given these points, it is best to bring on someone with experience at hand. Whether they have succeeded in previous endeavors or not, having an experienced advisor makes sure that the odds are always in your favor.
9. 82% of American small business owners believe they have the right qualifications and backed up experience to run their new business even with cash flow problems.
(Small Biz Trends)
Cash flow uncertainties and short-run rates are not why most small businesses fail; it has more to do with self-confidence and drive to succeed.
According to startup statistics reported by Small Biz Trends, 63% of small business owners did not believe that they had enough startup funds to start their business. Yet, 93% of small business owners started their small business because they calculated a potential run rate of 18 months.
Besides being confident in their abilities, many small business owners responded that they employed the right accounting technologies that eased the burden of financial distress. Providing cash flow access and valuable insights—reliable accounting software—helps founders focus on business, not books.
Nevertheless, the Kabbage startup statistics survey states that some small businesses require more startup capital in the initial stages, like restaurants, medical offices, and manufacturing companies. So, it is better to move forward only if you have enough funding to operate effectively in industries with the most expensive startup costs.
10. Startups that pivot 1-2 times have 3.6x better user growth in comparison to startups that pivot zero or more than twice.
(The Lean Startup)
Startups start with an idea — a product or service — that they think people want. Many startups invest months, if not years, in perfecting the product (or service) before validating it in the market, thinking that is what customers will want. And that is what brings them down.
On the other hand, startup founders who take the ‘Lean Startup’ approach know when to steer and when to persevere.
Additionally, these companies raise 2x more money than ones that do not turn. Some crucial startup statistics are that companies that pivot more than twice also perform much worse, and receive fewer funds.
11. Technology and healthcare startups are the strongest industry, bringing in the most revenue compared to other startup categories
Be it the US, UK, China, or Canada, healthcare and technology startup statistics indicate that 52% of all startups in the industry are profitable.
In the US alone, healthcare startup industries brought US$ 37.1 billion in revenue. (Note: the data represents only a fragment of the businesses and startups operating in the US, UK, Canada, and China).
It is equally important to note that over 150 technology and healthcare startups have unicorn status.
The tech startup statistics reveal that 110 startups are active in technology, while the top valued startups representing health and pharmaceuticals are more than 50 as of 2021.
Startup Failure Rate Statistics
12. 9 out of 10 startups fail, a misleading startup statistics in the context of startups
A startup is a new business that brings innovative and scalable business ideas. So, all new businesses cannot be considered startups. Yet, most business startup statistics indicate that 9 out 10 startups fail, which is far from the truth as their startup failures report comes from Business Employment Dynamics, which focuses on all new businesses, both startups and traditional businesses (like the hair salon).
It is hard to claim accuracy on the startup failure rate. The most evidence-based startup failure report comes from Startup Genome, which claims that only 1 out of 12 startups fail. Still, given that most startups don't register a legal entity — while testing their ideas — it is difficult to arrive at a conclusive startup failure rate.
Given the small business trends, 20% of small businesses fail within the first year. Be that as it may, the likelihood of 20% of all startup failure is unlikely. But that does not negate that startups do fail!
13. 34% of startups fail because of lack of market-fit products or services, 22% because of marketing problems
For one thing, 56% of startups fail because either they are not creating products or services that the market needs or not implementing the right marketing strategies.
So, it is better not to invest too much time and effort too quickly; instead, you should find ways to validate your assumptions cheaply and quickly.
Hard to imagine, but improper management is the second biggest factor contributing 18% to startup failure rates. So, ensure to incorporate proper team management applications and find ways to inspire the team.
14. Only 40% of startups become profitable, only 9% of startups survive ten years.
(Small Biz Trends)
Scary but true numbers from startup failure rate statistics by Small Biz Trends indicate that as much as 30% of startups continually lose money. 30% of small businesses break even, provided that only 9% of small businesses survive ten years in the industry but by continuously changing their business model to meet market needs.
Furthermore, almost 95% of startups will close their doors within the first five years in business because of poor management, tough competition, and poor marketing.
15. 20% of startups get outcompeted, 15% of startups fail due to pricing/cost issues.
CB Insight startups statistics state the biggest reason for failing is not receiving enough venture capital funding.
As much as 38% of startups failed because of running out of personal funds, 19% had flawed business models, and 35% couldn’t serve the market needs. 14% fell because they realized they did not have the right team. 6% were affected by pivot gone bad, while 5% of startup founders lacked the same passion.
This data differs from the data from Fellory's startup company statistics as it is based on 110 companies already generating revenue. Also, it is significant to realize that most small businesses gave more than one reason for their failure to CB Insights — so, Failory’s 16% startups fail because the cash flow report could indeed be true.
16. Failure rates are similar across all startup industries
Startups operating in the information industry have the highest proportion of startup failures, over 62% get close within the first four years. Besides these, other industries’ startup failure rate statistics shows that about half of them fail.
Startup Statistics: Cost and Funding
17. 75% of venture-backed successful startup firms never return cash to investors
Startups evolve into scaleups after they have gotten past one of the biggest risks to startups — proved their products and services as market-fit. And the fact alone is enough to attract venture capital firms worldwide.
The startup funding statistics from the Wall Street Journal indicate that 3 out 4 scaleups fail, to say nothing of 40% fail to return anything to the venture capital firms.
18. Only 6% of startups believe that organic growth will be their next funding source.
(Silicon Valley Bank)
Of all the US startups analyzed by US Startup Outlook, more than half (52%) say they expect their following funding from venture capitalists. 17% expect to tap small and individual venture capitalists. 8% say private equity is their next go-to funding source, while only 6% believe organic growth will be their startup’s next funding source.
19. Less than 1% of startups get venture capital investment.
1% — is the proportion — of the startups that get funding from venture capital firms. Most rely on savings, cash flow, crowdfunding, and forms of debt, including credit cards, to cover their startup costs.
Global Entrepreneurship Monitor reports 77% of American small business founders rely on personal funds to cover the startup's costs.
The banks, providing cash, credit, specialized business checking accounts, and other financial products, are the second most widely used source for startup funding.
20. Startups with the ‘unicorn’ status have taken a billion dollars or more in debt to become more successful
Unicorns like Airbnb, Uber, Didi do not lack funding, yet they are raising massive debt rounds because financing growth solely on equity is expensive. Moreover, an IPO would make these numbers public — most of these unicorns raise money without giving details even to equity holders.
- Uber is trying to raise up to $2 billion in leveraged loans to expand its business in China.
- Didi secured a $2.5 billion syndicated loan financing from China Merchants Bank.
- Airbnb's $1 billion debt financing from Bank of America, Morgan Standley, and JP Morgan
And since their chances of being acquired by other companies are less likely, the cost of expanding and taking hold of their market will likely continue to come from debt packages.
21. The most expensive startup costs are payroll; five employees will cost just over $214,300 per year.
$236,300 per year ($214,300 for five employees) is the estimated annual cost of running a new business in Chattanooga, Tennessee — the US’s most affordable place to start a company.
According to Smart Assets, the average cost for employing five employees in the United States is $300,500,
22. Most small businesses have $10,000 or less at their disposal during the startup phase, 58% have $25,000
(US Small Business Administration)
According to the US Small Businesses Administration, a vast majority of small businesses start with an amount of $10,000 or less. The small business trends indicate that businesses operating in accounting, online retail, construction, and landscaping have under $5000 during the start.
23. Less than half (48%) of startups manage to raise a second round of funding.
With every seed funding round, companies advance toward new infusions via global startup deals. Yet, with seed funding round, fewer and fewer companies manage to secure startup funding. Only 15% of startups manage to raise a fourth round of funding.
As much as 30% of companies exit through an IPO or M&A after securing their first seed funding round. Plus, 67% of companies fail or become self-sustaining after the first round of startup funding.
Startup Statistics: Demographics
24. A startup founder who is 40 years old is 2.1x more likely to start a successful venture than a 25-year-old.
At the time of their company's founding, 3.0% of startup founders were 40 years old, compared to 2.5% of 30-year-olds and only 1.7% of 25-year-olds. Also, a 40-year-old founder is 1.3x more likely to be in the top 0.1% of startups than a 25-year-old.
To sum up, the longer you have been around, the better your odds. The average age of a company founder at the time of founding — among 2.7 million founders — is 41.5 years.
The average age of startup founders who exit the market with their product or service — going public in an IPO or being acquired by another company — is 46.5.
Even in the tech industry, the average age of the founder — at the time of founding the company — is 39 years.
25. 95% of entrepreneurs that create startups have a bachelor’s degree, and 47% have more advanced degrees
According to the Kauffman Foundation Startup Statistics report, almost 95.1% of all entrepreneurs engaged in startups have a bachelor’s degree.
In the US, new businesses with at least one founder from an Ivy League school perform 220% better than the other startup owners. As a matter of fact, 86% of successful business owners admit that education is crucial for the startup’s success.
Startup statistics: Growth and Future Projections
26. Green technology and sustainability market size will be $36.6 billion by 2025, at a CAGR of 26.6%
(Global News Wire)
Startups operating in IoT, AI & Analytics, Digital Twin, Cloud Computing developing products and services like green building, weather monitoring, and forecasting apps, carbon footprint management systems will grow at a Compound Annual Growth Rate of 26.6% from $11.2 billion in 2020 to $36.6 billion by 2025.
27. 60% of entrepreneurs believe that AI is the most promising innovative technology.
Artificial intelligence is no longer an idea; it has become a sizable portion of all top valued startup firms. And they will continue to do so.
Since the last decade, startups operating with big data have raised over $11.7B in equity funding across 370+ global startup deals from more than 700 VCs.
Most businesses using AI do not even know they are employing Industrial AI applications to market their products, analyze their competitors, and place digital ads. Yet, their usage is increasing day by day.
If you are still doubting AI contributions to businesses, note that at least 12 unicorns employ applications relating to data annotation, cybersecurity, sales & CRM platforms, and enterprise search.
28. 20% of future unicorns operate in the fintech space, 30% involved in enterprise/big data tools are likely to evolve into as unicorns
CB Insights and Fast Company set out to build an algorithm to discern the financial health of startups and came up with 50 companies likely to grow into a unicorn.
According to these startup trends, 60% of future unicorns will emerge from the US. Argentina, China, France, Singapore, and Sweden are likely to produce one unicorn each, while both India and Australia will claim two future unicorns.
What to learn from these startup statistics?
By now, it must be pretty much clear to you that startups are more than a five-person team and chaos. And not every startup lives to tell the ‘garage to riches’ story.
Nevertheless, it does not mean that you should test your idea. You will be surprised to know how many failed startup founders are running a successful company.
Most founders and involved teammates also end up finding good jobs, thanks to the skills acquired in the project.
Of course, most startups fail. But some succeed too.
Now, it is up to you to prioritize success over failure and take the risk of testing the idea and turning the odds in your favor. Remember, the number one quality of startup founders is — self-confidence.
- Startup Ranking
- Small Biz Trends
- Kauffman Foundation
- Skill vs. Luck in Entrepreneurship
- Small Biz Trends
- The Lean Startup
- Small Biz Trends
- CB Insights
- Silicon Valley Bank
- Global Entrepreneurship Monitor
- Kellogg Insights
- CB Insights
- US Small Business Administration
- Fast Company
- Global News Wire