Startup Statistics (How Many Startups Fail?)

Welcome to our roundup of startup statistics.

It’s a particularly aggressive enterprise panorama on the market. So earlier than you strike out in your new enterprise enterprise, it’s necessary to know all of the details and figures referring to startups in 2023. 

On this article, we’ll be protecting all probably the most attention-grabbing stats about startups, and answering necessary questions like:

  • What number of startups fail?
  • Why do they fail?
  • What number of startups are there?
  • How a lot does it value to launch a startup?

Plus, a complete lot extra. Prepared? Let’s get began.

What number of startups fail?

Failure charges amongst startups are surprisingly excessive. In accordance with Failory, 9 out of 10 startups fail. Enterprise-backed startups have barely greater success charges. Nonetheless, 7.5 out of 10 nonetheless finish in failure.  

High causes startups fail 

Usually, startups fail as a result of monetary points. In truth, 38% of startups fail as a result of a lack of funds or failure to boost capital.

Though cash is usually a huge problem for startups, there are tons of different challenges dealing with new companies. Listed here are some extra of the commonest causes startups fail:

  • 35% fail as a result of a scarcity of market want
  • 20% fail to market competitors
  • 19% fail as a result of flaws within the enterprise mannequin
  • 18% fail because of authorized and regulatory points
  • 15% fail as a result of pricing and enterprise value points
  • 14% fail as a result of personnel and staffing points
  • 10% fail because of mistimed product launches
  • 8% fail as a result of product high quality 
  • 7% fail as a result of disharmony between buyers and workforce members
  • 6% fail because of incorrect pivoting 
  • 5% fail as a result of burnout or a scarcity of ardour

Startup failure charges by trade

Some startup industries are extra profitable than others. The trade with the best failure price is ‘info’, and the trade with the bottom failure price is ‘finance insurance coverage and actual property’. Right here’s a breakdown of startup failure charges by trade:

Startup trade % of companies that fail
Info 63
Transportation and utilities  55
Retail 53
Development 53
Manufacturing  51
Mining  49
Wholesale 46
Providers  45
Agriculture 44
Schooling and well being 44
Finance insurance coverage and actual property 42
Startup failure charges by trade

When are startups most definitely to fail?

Failure charges for startups differ relying on how lengthy the corporate has been in operation. Startups are least more likely to fail within the first 12 months, with solely a 20% failure price in keeping with Failory. Nonetheless, years two and three are when startup ventures are most definitely to failure. Listed here are the stats: 

  • Startups have a 20% failure price within the first 12 months 
  • Startups have a 30% failure price within the second 12 months 
  • Startups have a 50% failure price within the third 12 months 
  • Startups have a 70% failure price by the tenth 12 months of operation 

Sources: CBInsights, Failory

What number of startups are there?

There’s no definitive information obtainable on the whole variety of startups globally, however our greatest estimate is someplace within the area of 100-120 million.

This can be a very tough estimation primarily based on the truth that there are round 333 million firms the world over, and roughly a 3rd of those are younger companies (of their first 5 years of operation).

What number of startups are launched per 12 months (globally)?

Once more, we now have little or no to go off right here—we will solely estimate. However our greatest estimates are that there are someplace round 50 million new startups launched per 12 months. That’s about 137,000 per day.

That is primarily based on an evaluation by Moya Okay. Mason, utilizing the knowledge supplied by Dr. Paul D. Reynold. 

In accordance with Dr. Reynold, entrepreneurs try to begin about 150 million companies per 12 months, however solely round a 3rd of those are efficiently launched.

What number of startups are launched within the US annually?

In accordance with information from the US Census Bureau, there have been round 5 million new enterprise functions processed in 2022. This can be a good indication of the variety of startups launched within the US annually.

New enterprise functions within the US by 12 months:

12 months New enterprise functions % change YOY
2022 5 million -7.4%
2021 5.4 million +22.7%
2020 4.4 million +25.7%
2019 3.5 million +0%
2018 3.5 million +9.4%
2017 3.2 million +6.7%
2016 3 million +7.1%
2015 2.7 million +3.7%
New enterprise functions within the US by 12 months

Startups by nation (per StartupRanking)

Startup Rating supplies information on the variety of registered startups in every nation all over the world. In accordance with their rating desk, the US is the world chief on the subject of startups, with greater than 10x as many as every other nation.

Notice that the numbers within the desk under solely mirror startups listed in Startup Rating’s database. 

As such, they’re considerably decrease than what you’d count on given our above estimations of the variety of startups worldwide and certain dramatically underestimate the true figures.

High 10 nations by the variety of startups:

Rank Nation Variety of startups
1 US 76,314
2 India 16,268
3 UK 6,863
4 Canada 3,795
5 Australia  2,756
6 Indonesia 2,476
7 Germany  2,395
8 France  1,599
9 Spain 1,445
10 Brazil 1,175
High 10 nations by the variety of startups created yearly.


Commerce Institute, Statista, JPMorgan Chase Institute, Moyak, Startup Ranking

Complete early-stage entrepreneurial exercise (TEA) startup statistics

Complete early-stage entrepreneurial exercise (TEA) tells us the proportion of the working inhabitants in a given economic system (nation) that’s actively attempting to launch a brand new enterprise or already personal/handle a startup.

It’s a helpful information level for understanding how frequent startups are, and the way necessary they’re to the worldwide economic system. Let’s check out some statistics pertaining to TEA.

TEA by nation

In accordance with the newest GEM (International Entrepreneurship Monitor) survey, survey, the Dominican Republic has the best whole early-stage entrepreneurial exercise of any nation. 

42% of individuals within the Dominican Republic are already working, or within the technique of launching, a startup. 

Total early-stage entrepreneurial activity
Complete early-stage entrepreneurial exercise

On the other finish of the spectrum, Poland has the bottom TEA—solely 2% of individuals in Poland have launched or are planning to launch a startup.

If we slim down the listing and solely have a look at ‘Degree A’ economies (high-income nations with a GDP of >$40,000), Canada tops the listing with a TEA of 20%

High 10 nations by TEA (in Degree A economies):

  1. Canada – 20% 
  2. Saudi Arabia – 19%
  3. US – 16%
  4. UAE – 16%
  5. Qatar – 15%
  6. Netherlands – 14%
  7. Republic of Korea – 13%
  8. UK – 12%
  9. Eire – 12%
  10. Switzerland – 10%
  11. Israel – 9%

TEA by age

In accordance with the identical GEM survey, whole early-stage entrepreneurial exercise is bigger amongst adults aged 18-34 in comparison with these aged 35-64 in most economies. This implies younger individuals are extra more likely to launch startups.

Total early-stage entrepreneurial activity by age

In Canada, this age hole could be very notable: Over 31% of adults aged 18-34 are working or planning to launch a brand new enterprise, in comparison with lower than 15% of these aged 35-64.

Within the US, the hole is rather less pronounced, at round 19% of 18-34-year-olds, and 16% of 35-64-year-olds.

There are some exceptions to the rule, too. In nations together with the Dominican Republic, Saudi Arabia, and Israel, TEA is greater amongst these aged 35-64 than amongst 18-34-year-olds. In these areas, older individuals are extra more likely to launch startups.

TEA by gender

Males usually tend to launch startups than girls in most nations. TEA amongst males is greater within the overwhelming majority of worldwide economies, with 4 exceptions: Kazakhstan, Spain, Dominican Republic, and Morocco.

Total early-stage entrepreneurial activity by gender

Within the US, 18% of males are planning to launch or already run a startup, in comparison with 15% of ladies.

Sources: GEM 2021/2022 Global Report

Which nation is the very best for startups?

The GEM survey requested entrepreneurs in nations the world over to judge the alternatives for enterprise, and the convenience of beginning a enterprise of their nation. 

In accordance with the outcomes, Saudi Arabia is the very best place to begin a enterprise, as round 96% of respondents both agreed or strongly agreed there have been good alternatives for brand spanking new companies within the nation. And round 94% agreed with the assertion ‘in my nation, it’s simple to begin a enterprise’.

India additionally stood out as a great place for entrepreneurs, with over round 82% of Indian respondents agreeing that it’s simple to begin a enterprise within the nation, and across the similar quantity saying there are good alternatives for brand spanking new companies. 

Scandinavian nations like Sweden and Norway additionally ranked extremely.

Within the US, round 63% of respondents mentioned that they agree or strongly agree that there are good alternatives to begin a enterprise of their space, placing the US in direction of the center of the desk.

Which nation is the worst for startups?

On the opposite finish of the dimensions, Japan appears to be the worst nation for startups. Lower than 12% of respondents in Japan agreed there have been good alternatives of their space. And fewer than 30% agreed it’s simple to begin a enterprise within the nation. 

Different nations that ranked towards the underside embrace Israel and Iran.

Sources: GEM 2021/2022 Global Report

Startup trade distribution

Fintech is the most well-liked trade for startups, in keeping with the stats, accounting for round 7.1% of all startups on the earth. 

Life sciences and healthcare ranks because the second hottest trade at 6.8%, and synthetic intelligence comes third at 5%.

High 10 startup industries by % distribution:

  1. Fintech – 7.1%
  2. Life sciences and healthcare – 6.8%
  3. Synthetic intelligence – 5%
  4. Gaming – 4.7%
  5. Adtech – 3.3%
  6. Edtech – 2.8%
  7. Cleantech – 2.1%
  8. Blockchain – 1.5%
  9. Robotics – 1.3%
  10. Cybersecurity – 0.7%
  11. Agtech – 0.6%

Bonus truth: 61% of tremendous start-ups supply B2B options, whereas 39% supply B2C options. Tremendous startups are high-value startups that haven’t but reached unicorn standing.

Sources: Statista

What’s the highest-valued startup on the earth?

Douyin is presently the highest-valued startup on the earth, with a market valuation of round $200 billion USD, in keeping with Hurun’s International Unicorn Listing. Whereas that determine is extremely excessive, its valuation is definitely down by 43% from its peak of $350 billion USD.

If you happen to didn’t already know, Douyin is the Chinese language model of TikTok, which has exploded into the social media house over the previous couple of years. Given the meteoric rise of the video-sharing app, it is sensible that it might be the #1 highest-value startup.

The second highest-valued startup is SpaceX, an American house transportation producer and satellite tv for pc communication company owned by Elon Musk.

High 10 startups by market worth

  1. Douyin – $200 billion
  2. SpaceX – $125 billion
  3. Ant Group – $120 billion
  4. Stripe – $62 billion
  5. Shein – $60 billion
  6. Binance – $45 billion
  7. Databricks – $38 billion
  8. WeBank – $33 billion
  9. JDT – $30 billion
  10. – $28 billion

Supply: Hurun Global Unicorn List

Unicorn startup statistics

The time period ‘unicorn’ refers to privately-held startup firms which are valued over $1 billion. The Hurun Analysis Institute compiles annual experiences with eye-opening statistics on these profitable, high-value startups. Let’s check out a few of them.

What number of unicorns are there?

There are presently 1312 unicorn startups on the earth, and over half of these are within the US. 

That’s up by round 24% in comparison with the top of 2021 when there have been simply 1,058 unicorns globally. And greater than twice as many as on the finish of 2020, when there have been solely 586. 

The full worth of all recognized unicorns on the earth is $4.2 trillion. Once more, that’s up by 13% because the finish of 2021.

High 5 nations by variety of unicorns

Nation Variety of unicorns Change over the past 6 months
US 625 +138
China 312 +11
India 68 +10
UK 46 +7
Germany 36 +10

As this desk exhibits, the US is main the worldwide startup ecosystem. It accounts for over half of all unicorns, and the overwhelming majority of recent unicorns that have been found this 12 months.

China ranks in second place, and India is available in at a distant third. The UK and Germany full the desk in fourth and fifth place, respectively.

Bonus truth: There have been 29 new unicorns within the Fintech trade within the final 6 months, making this the fastest-growing unicorn startup sector. Subsequent was blockchain and enterprise companies, every accounting for 22 of the brand new unicorns recognized within the 6 months as much as June 2022.

Supply: Hurun Global Unicorn List, Hurun Global Unicorn Index 2022 Half-Year Report

How a lot does it value to launch a startup?

How a lot it prices to launch a startup actually relies on the kind of enterprise you might be launching or the product you want to promote. 

In accordance with Small Enterprise Traits, some startups, together with eating places, medical places of work, and manufacturing firms, want as much as $100,000 to get off the bottom. Different ventures together with accounting, on-line retail, and landscaping might be began with lower than $5000. 

What are the costliest prices concerned with launching a startup?

In accordance with Sensible Property, the costliest a part of launching a start-up is payroll, which may value round $300,000/12 months for a startup workforce consisting of 5 workers.

Different costly prices embrace gear, which may vary from $10,000 to $125,000 on common, in keeping with Fundera. 

How are most startups funded?

In accordance with a Lendio survey, the commonest financing possibility for startups in 2018 was private funds. Round 77% of startups used private finance to fund the launch of their firm. 

High financing choices for startups

  • Private funding – 77%
  • Loans from the financial institution – 34%
  • Loans from household and pals – 16%
  • Different funding 11%
  • Donations from household and pals 9%
  • On-line lenders 4%
  • Angel buyers 3%
  • Enterprise capital 3%
  • Crowdfunding 2%

Misc. startup statistics

Earlier than we wrap up, listed here are just a few extra startup statistics that didn’t match into any of the above sections, however we nonetheless discovered tremendous attention-grabbing.

How modern are new startups?

Within the US, just one.6% of people that began a brand new enterprise final 12 months launched services or products that have been model new to the world. And over 4% have been not less than new to the world. 

How innovative are new startups?
How modern are new startups by nation?

Whereas that is pretty low, it’s nonetheless above the worldwide common. Globally, in 37 of the 47 economies studied within the GEM report, lower than 1% of startups launched new merchandise/companies to the world.

What are the highest motivations for launching startups?

Within the US, round 75% of surveyed entrepreneurs agreed that their motivation for beginning a enterprise was ‘to construct nice wealth or excessive earnings’, making this the highest motivation. An extra 71% mentioned that they have been motivated by a want ‘to make a distinction on the earth’. 

Round 46% mentioned their motivation was ‘to earn a residing as a result of jobs are scarce’, and round 41% mentioned they needed ‘to proceed a household custom’.

However as you’d count on, there’s vital variation all over the world. In low-GDP economies, for instance, respondents tended to agree with the motivation ‘to earn a residing as a result of jobs are scarce’ way more steadily than within the US.

Startups and the pandemic

In GEM’s 2020 survey (in the course of the top of the pandemic), in 33 of 46 world economies, over half of the entrepreneurs surveyed mentioned that beginning a enterprise had grow to be tougher in comparison with the 12 months earlier than.

However within the 2021 survey, this was solely true in 18 of 46 world economies.

This exhibits how vital the affect of the pandemic was on the startup ecosystem.

But it surely’s not all unhealthy information. In 2020, in 9 of 46 economies, over half of the entrepreneurs beginning or working a brand new enterprise additionally mentioned that the pandemic had led to new alternatives. And in 2021, that was true in 15 of 46 economies.

Sources: GEM 2021/2022 Global Report

Ultimate Ideas

So there you’ve got it—nearly every part your must find out about launching a startup in 2023. 

One factor we will take away from these startup statistics is that the startup ecosystem continues to be thriving, particularly in North America and the Asia Pacific. 

With a lot competitors on the market, and such a excessive price of startup failures, launching your individual enterprise is definitely no cakewalk. Nonetheless, you probably have the appropriate trade information and a strong marketing strategy, you could possibly be the founding father of the following billion-dollar unicorn firm.

Are you considering of launching your individual start-up? Try a few of our business-related articles, comparable to Best Small Business Website Builders and Social Engagement Platforms for Small Businesses.

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