The last few decades have shown us that startups have tremendous potential. They contribute billions of dollars to the global economy and create many job opportunities. From Amazon to Apple, they are the driving force behind innovation and new technology. And these recent startup statistics show their importance as economic growth leaders.
Even amid the COVID-19 pandemic, these companies held their positions and played a significant role in the economic recovery, showing they are necessary for economic resiliency and job growth.
And after a decade of an entrepreneurial recession, the U.S. experienced a startup boom during the pandemic. There was notable growth in healthcare and retail, which came as no surprise after the e-commerce expansion.
In other words, the innovation revolution didn’t stop when the world did. That goes on to show that they are a force on their own.
Instead of following, startups create trends.
They initiate their own company culture that focuses on individual contributions to a mutual goal of creating something meaningful and unique. Thus, their workforce planning engages an array of skills and personalities.
Most of the time, startups strive toward shared values and beliefs and create a workplace with a strong sense of accomplishment. In fact, these companies are great for gaining diverse employee experience, and they keep the workforce much more competitive.
Let’s see what other startup trends marked the past few years and how big they made an impact.
Tech Startup Statistics
- The total value of the global tech industry stands at around $5.3 trillion, making it an attractive choice for startups. (Statista, 2022)
- Consequently, in 2020, there were 1.35 million tech startups. (Get2Grow, 2020)
- 90% of successful technology startups are in the product and deep tech sectors. (McKinsey & Company, 2022)
- The most successful startup, ByteDance, is in the tech industry and is valued at $350 billion. (Statista, 2022)
- The average age of a tech founder is 45. (Kellogg Insights, 2018)
- Most tech companies require funding between $100 million and $220 million to reach unicorn status. The highest need for funding was in the deep tech sector. (McKinsey & Company, 2021)
- With $105 billion raised in startup funds, Silicon Valley remains a tech hotspot, and San Francisco is the tech capital of the U.S. (C.B. Insights, 2022)
- It takes up to ten years for most European tech startups to reach unicorn status. For network and deep tech, the process is slightly faster. (McKinsey & Company, 2021)
- More than half of top-performing European tech startups and scale-ups are in biotech and healthcare (24%), B2B SaaS (18%), and fintech (16%). (McKinsey & Company, 2021)
- In Europe, deep tech stands out by employing top talents. Tech startup statistics show that 27% of all deep tech hires come from the top 100 universities or 51% above the average. (McKinsey & Company, 2021)
- Across the Asia-Pacific region, India is on the path to becoming a global startup force. In 2021, the country added 44 new companies to its unicorn list. (Mint, 2021)
While some industries struggled with the negative impacts of COVID-19, fintech experienced a financial boom. Its convenience, effectiveness, and low-cost products made it an attractive investment opportunity.
As a result, fintech startups reached several milestones, and experts predict an additional 20% growth over the next four years.
- 2021 was an unprecedented year for fintech startups. Global funding attained a new record of $131.5 billion. (C.B. Insights, 2022)
- Compared to 2020, in 2021, fintech funding grew 169%. (C.B. Insights, 2022)
- Of all tech industries, fintech also had the highest proportion of early-stage deals. (C.B. Insights, 2022)
- The U.S. is the leader in fintech funding with $18.2 billion, followed by Asia with $8.2 billion, and Europe with $5.6 billion. (C.B. Insights, 2022)
- The U.S. also leads the global deal share, with 34%. Asia comes second with 28%, and Europe third with 23%. (C.B. Insights, 2022)
- GoTo was the No.1 equity deal in 2021. The Indonesian fintech startup raised more than $1.5 billion in initial public offerings. (C.B. Insights, 2022)
- The total number of fintech startups noticed a significant increase in the past couple of years. In 2018 there were a total of 12,131 startups globally. In 2021, the number grew to 26,346. (Statista, 2022)
- By region, the Americas kept the lead in fintech. From 2018 to 2021, there was an increase of 4,000 fintech startups, reaching a total of 10,755. (Statista, 2022)
- In 2021, the EMEA region had 9,323 fintech startups, rising from 7,385 just a year prior. (Statista, 2022)
- The APAC region holds 23.79% of the fintech startup market, with 6,268 startups. (Statista, 2022)
- There were 52 unicorns in 2021 just in the payments sector, 42 in crypto and decentralized finance, and 34 in wealth management. (Statista, 2022)
When it comes to startups, construction is often overlooked. Even though it’s the second least digitized industry after agriculture.
However, it’s worth mentioning that this industry accounts for 13% of the global G.D.P. So, merging the “old with the new” has massive innovation potential.
Contech startups are leading the revolution, and these startup statistics give you an overview of this industry’s extent.
- There are over 6.200 startups in the construction tech industry. (Tracxn, 2022)
- Construction startups are becoming more popular, raising over $5 billion in 2021. In comparison, the numbers stood around $100 million ten years earlier (Construction Physics, 2022)
- The estimates for 2022 startup funding are close to $9 billion. (Construction Physics, 2022)
- Five companies split 40% of the total funding for the sector. These top five startups are View, Katerra, EquipmentShare, Workrise, and Procore. (Construction Physics, 2022)
- Construction startups have a 36.4% likelihood of lasting more than five years. (Small Business Trends, 2020)
- The failure rate for construction startups is 53%. (Failory, 2022)
- The contech industry amassed $28.1 billion worth of funding. (Tracxn, 2022)
- By the number of investments, some of the biggest investors in the sector are Y Combinator, Plug and Play Tech Center, Techstars, Shadow Ventures, and Brick & Mortar Venture. (Tracxn, 2022)
Real Estate Startups
The technological renaissance affected the real estate industry as much as any other. Real estate startups or PropTech startups gained momentum in 2021.
By digitally transforming the property industry, proptech startups introduced new tools, reshaped property buying, and reduced paperwork. So, it comes as no surprise that they are now gaining the attention of investors.
- 2021 was a record year for real estate startups. In the first six months, VC-backed startups raised $10.6 billion, compared to $8.3 billion during the same period in 2020. (Crunchbase, 2021)
- 2021 was also a record year for real estate tech adoption and revenue. (CRETI, 2021)
- Real estate tech companies gathered $32 billion, a 28% increase since 2020. (CRETI, 2021)
- Venture capitalist funding shifted from early-stage to mid and late-stage startups, with 57% going to Series C funding and beyond. (CRETI, 2021)
- In the U.K., proptech investment reached a new record of over two billion U.S. dollars, four times higher than 2020. (UKTN, 2021)
- The most popular real estate startup is Airbnb. In 2020 alone, SilverLake invested $350 million in the company. (Statista, 2021)
- Property management and construction were the highest funded real estate sectors in 2021. (Crunchbase, 2021)
- Real estate has a lower startup failure rate than other industries, or 42%. (Failory, 2022)
- The five-year survival rate for startups in the real estate industry is 39.6%. (Small Business Trends, 2020)
- In 2020, more than half of proptech startups targeted the office real estate sector for commercial deployment. 31% targeted hospitality real estate. (Statista, 2020)
- For 35% of investors, smart buildings were the most exciting aspect of proptech innovation. (Statista, 2020)
Startup Failure Statistics
Launching a startup and surviving in such a competitive market takes a lot of work. Founders must create a sustainable business model. They need to find their business niche, meet the market demand for their product or service, and secure a steady cash flow.
Despite all this, startups can still fail, thus their notorious failure rate.
It’s also one of the reasons why investors deem them “unstable.” Although a valid point to some extent, these startup failure statistics show why and how startups fail.Understanding them can help startup founders avoid common mistakes, thus giving them an advantage in the right market.
- Nine out of ten startups eventually fail. (Investopedia, 2020)
- 21% of all startups fail within the first year, 30% during the second year, 50% in the fifth year, and 10% in their 10th year. (Investopedia, 2020)
- The number one reason for startup failure is money. Up to 38% of startups that failed ran out of cash or failed to raise new capital. (C.B. Insights, 2021)
- A second close was the lack of market demand. 35% of failed startups listed “no market need” as the main reason. However, this percentage is down from 42% in 2018. (C.B. Insights, 2021)
- Only five percent of respondents mentioned burnout or lack of passion, making this the least common reason for startup failure. (C.B. Insights, 2021)
- 75% of venture-backed startups never return the investment. (Failory, 2022)
- Up to 40% of investors lose their entire investment. (Failory, 2022)
- The lowest startup failure rate is in the finance, insurance, and real estate industry, at 42%. (Failory, 2022)
- The information industry has the highest startup failure rates, with 63%. (Failory, 2022)
Startup Industry Statistics
According to the latest startup industry statistics, technology is leading the change. Many new industries were created by startups merging technology with existing business models. They’re showing significant growth worldwide and are set to expand even more.
- The leading startup industries and sectors are fintech, internet software and services, e-commerce and D2C, artificial intelligence, and healthcare. (C.B. Insights, 2022)
- 61% of super startups globally are B2B, and 39% are B2C. (Statista, 2022)
- Interest in digital health startups is on the rise. In 2021, global funding reached $57 billion, an increase of 79% since 2020. There was also an increase in total digital health unicorns, the number now reaching 85. (C.B. Insights, 2021)
- Another sector spotlight in 2021 was retail tech. Its total funding doubled to reach $109 billion. (C.B. Insights, 2021)
- Of all industries, fintech has the largest number of unicorns or one in four. (C.B. Insights, 2021)
- In China, finance and insurance is the highest valued industry with unicorns, with a market value of over $227 billion. (Statista, 2022)
- 57% of startup companies in the consumer-goods sector are “green startups.” (McKinsey & Company, 2022)
Startup Business Statistics
It’s a little-known fact that three startups have reached the $100 billion mark. The same goes for the gender gap between startup founders. In fact, these startup business statistics show that female founders hold less than a quarter of all new ventures and are less likely to get investments.
- 13% of all business establishments are startups. (S.B.A.’s Office of Advocacy, 2021)
- 75% of owners launch their startups with personal savings. (S.B.A.’s Office of Advocacy, 2022)
- Half of all businesses enter the market with less than $25,000, while 12% have a starting capital of over $250,000. (S.B.A.’s Office of Advocacy, 2022)
- As of April 2022, there are 1,000 unicorns around the world. (C.B. Insights, 2022)
- 45% of all unicorns are in the U.S., and the Asia-Pacific region is a close second. North America and the Asia Pacific hold almost 90% of all unicorns globally. (Statista, 2022)
- Europe generates more than a third of all startups globally, but only 14% of all unicorns. (McKinsey & Company, 2021)
- The market valuation of unicorns is highest in the Asia-Pacific region, with a cumulative market valuation of $952 billion. (Statista, 2022)
- The total value of all U.S. unicorns is $929 billion. (Statista, 2022)
- SpaceX, Stripe, and UiPath are the top three largest U.S. unicorns. (Statista, 2022)
- There are only two startups with a value of over $100 billion. (C.B. Insights, 2022)
- ByteDance became the first-ever startup to reach the “hectocorn” level and surpass the $100 billion mark. (C.B. Insights, 2022)
- In October 2021, SpaceX was the second company to receive the status of a “hectocorn” startup, with a worth of $100.3 billion. Shein is a close third, valued at $100 billion. (C.B. Insights, 2022)
- Stanford University leads the way for startups, with 465 of its graduates opening a startup in 2020 alone. M.I.T. is a close second with 367 students, and Harvard’s third on the list with 293. (Statista, 2021)
- The global average of female-founded startups is around 20%. In the U.S., the number goes up to 28%. (Statista, 2022)
- Most African startup founders are men. Only 15% of all C-suite or co-founder positions were held by women, five percent lower than the global average. (Statista, 2022)
- Startup businesses created over three million jobs in 2020. (Statista, 2021)
- 15.4% of the U.S. population works or is involved in startups. (Statista, 2021)
- According to the Forbes “America’s best startup employers” list, Commonwealth Fusion is the top employer for 2022. (Forbes, 2022)
- Startup culture is growing in Britain. Most Brits, or 65%, responded positively to opening their own business. (Micro Biz Mag, 2021)
- The U.K. also marked the highest search volume on “how to start a business,” with over 18,000 searches a month. (Micro Biz Mag, 2021)
- Older entrepreneurs are more likely to succeed. A 50-year-old is twice as likely to reach success than a 30-year-old. (Kellogg Insights, 2018)
Startup Funding Statistics
The startup market is very competitive, so the early stages of funding can either make or break a business.
Most startup owners rely on savings to launch a business. However, as demand grows, so does the need for further expansion and funding.
The startup funding statistics give an insight into external funding. Furthermore, these startup statistics unveil how long it takes to switch between funding rounds, which industries get the biggest slice of the pie, and what investors are focusing on right now.
- 2021 was a record year for tech startup funding, with $621 billion across all funding stages. (C.B. Insights, 2022)
- U.S. startups alone raised half of the share, or $311 billion. (C.B. Insights, 2022)
- From 2012 to 2021, V.C. funding marked a whopping 92% growth year over year. (Crunchbase, 2022)
- Early-stage startups raised a record $201 billion, or $100 billion more than in 2020. (Crunchbase, 2022)
- Seed-stage startups raised $29.4 billion, or $10 billion more than in 2020. (Crunchbase, 2022)
- The top investor of 2021 was Tiger Global Management. The investment firm backed up 328 companies. (C.B. Insights, 2022)
- In 2022 there’s a decline in funding of 19%, with mega-round funding dropping up to 30%. (C.B. Insights, 2022)
- The first quarter of 2022 was still the fourth largest ever for funding. (C.B. Insights, 2022)
- To become fundable, 58% of seed startups are launching their products at the time of fundraising. (DocSend, 2022)
- In 2020 and 2021, seed startup investors spent 94% more time on the Business Model sections of successful decks. (DocSend, 2022)
- The average startup Series A funding in the U.S. is on the rise. There was an increase from $15.5 million in 2020 to $22.2 million in 2021. Currently, it stands at around $26.3 million. (Fundz, 2022)
- There’s also a 35% increase in Series A deals in the U.S. In 2021, there were almost 900 deals, compared to 600 in 2020. (Fundz, 2022)
- Almost half of Series A startups (47%) spend at least $400k per month. (Fundz, 2022)
- Accel, 500 Startups, and Bessemer Venture Partners are some of the biggest investors in software Series A startups. (Fundz, 2022)
- Investors pay more attention to the product, business model, and solution during a Series A sales pitch. They pay the least attention to the company’s purpose, the “why now” section, and the competition. (DocSend, 2022)
- Statistics show that only eight percent of Series A startups chose a lead investor based on a well-known brand name. (DocSend, 2022)
- They were more interested in investors who had industry-specific experience (30%) or the ones that offered the best terms (23%). Only four percent chose a lead based on a personal referral. (DocSend, 2022)
- On average, Series B funding reaches $26 million, with Google Ventures being one of the top investors. (Fundz, 2022)
- The average amount for Series C venture capital for startups is the highest, at around $52 million. (Fundz, 2022)
- In terms of funding rounds, it takes 22 months to reach Series A from seed funding, 24 months from Series A to B, and 27 months from Series B to C. (Carta, 2017)
- Venture capitalists invest more in male co-founding startups ($20 billion) than female-only founded startups ($5 billion). (Statista, 2022)
- In 2021, all-female startups raised 25% less than all-male startups. (DocSend, 2022)
- African-American and Latina female-founded startups in the U.S. raised $3.1 billion in 2020. That’s two-thirds more than the funds raised in 2018. (Statista, 2022)
For years now, startups have been transforming society. These ideas turned into billion-dollar companies and are the driving forces of the economy. They offer solutions, give a new perspective on pressing matters, and create opportunities.
The startup statistics above show that startups can move the world forward with the right combination of a sound business plan, the right B.P.O., and a little bit of luck.
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