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Take the plunge in 2022 and create a startup after reading these statistics.
What is a startup?
The term "startup" is usually defined as:
Globally
Record-breaking venture capital
According to a report from European Startups supported by the European Commission, worldwide 2021 venture capital investments for startups topped records with a total of €264 billion in the first half of the year alone. That's 2.3 times the value of investments in 2020.
Source: European Startups, 2021
The highest number of unicorns
2021 also had the most unicorn companies, as found by the same European Startups report. "Unicorn" describes a privately held startup company with a value of over USD $1 billion. Market researchers, CB Insights, issued figures that coincide with this, listing 1,066 unicorns globally in March 2022. That's two new unicorns per day in 2021. In total, these unicorns are worth USD $3.5 trillion.
Source: European Startups, 2021
Mega investments
A report from PwC, titled "Living in a world of unicorns," shows there were 404 mega-rounds of investment (USD $134 billion) in unicorns in the first half of 2021. Mega-rounds are where companies raise rounds of $100 million or more. This is a huge number compared to previous years.
An excellent time to be an entrepreneur
With tech companies big and small dominating the startup scene, the global economy is transitioning to digital. Thanks to the infrastructure of tech giants such as Facebook and Google, younger startups can take advantage and create value. Jobs from startups increased by 10% annually, says European Startups.
Europe
Europe positioned itself as the fastest-growing region for venture capital investment in 2021. European Startups says that Europe is "growing faster than the US, China, and Asia." According to Statista, 2020 saw a big leap in the number of startups in Europe, from around 2,000 in the second half of 2019 to over 3,000 in the second half of 2020. The Covid-19 pandemic was the main catalyst for entrepreneurs, giving them the push to start a business during a time of severe uncertainty.
Source: Statista, 2020
An abundance of capital
European entrepreneurs have access to a bigger number of investors, according to an article from Crunchbase. The fundraising process is shorter than it was traditionally thanks to remote dealmaking being normalised. Investments in startups have grown by 215% in 2021 from the previous year.
Source: Crunchbase, 2021
Top 10 most attractive startup cities
An annual survey by Startups and Places has listed the top 50 most attractive cities to establish a company. The project has been questioning European business founders since 2016. The 2021 survey results show Berlin is the number one city of choice, followed by London, Amsterdam, Barcelona, Munich, Lisbon, Paris, Zurich, Tallinn, and Stockholm.
Source: Startups and Places, 2021
Top 10 European startup countries
According to 2021 data from Statista and StartupBlink, the top European countries for startups is slightly different. Countries are scored using the sum of the quantity, quality, and business environment individual scores. For example, the number of startups, number of accelerators, economic indicators, and number of coworking spaces are all taken into account.
From this data, they have found that the UK is the number one European country for startups, followed by Germany, Sweden, Switzerland, The Netherlands, France, Estonia, Finland, Spain, and Lithuania.
Source: Statista, 2021
European cities with one or more unicorns
Referring back to the report from European Startups, European cities are home to multiple unicorn companies, more than anywhere in the world. As of 2021, there are 65 European cities with one or more unicorns compared with 42 cities in the US and 23 cities in China.
Source: European Startups, 2021
Australia
Investment in startups triples in 2021
Figures from The State of Australian Startup Funding found that more investors are putting money into Australian businesses. More than $10 billion was invested in startups in 2021, triple the figure from 2020. Statista 2021 reports that Australia has one of the highest startup rates in the world.
Source: The State of Australian Startup Funding, 2021
94% of capital was raised on the east coast
Queensland, New South Wales, and Victoria are the Australian states on the east coast that raised the most capital investment for startups. A study by Deloitte and Pollenizer in 2022 found that Sydney is the central Australian startup hub, being more than double the size of the startup scene in Melbourne. Sydney dwarfs Brisbane and Perth, being six and eight times larger respectively.
Source: The State of Australian Startup Funding, 2021
Ecommerce startups in the top 10
By sector, ecommerce is in the top ten startups with the most investment capital raised. $365 million was funded to ecommerce businesses in Australia in 2021 with a total of 32 deals.
Source: The State of Australian Startup Funding, 2021
The United States
A record-breaking number of startups
According to the 2022 US Census Bureau’s Business Formation Statistics, 5.4 million applications were filed to form new businesses in 2021. This is an unprecedented increase of 53% from 2019 and 23% higher than in 2020. The number of applications is likely down to the Covid-19 pandemic, which presented a unique opportunity for entrepreneurs.
Top-ranking startup ecosystems
US cities are known worldwide for being top-rated incubators for startups. In a 2021 report from Startup Genome, of 280 global ecosystems and 3 million startups, half of the top ten cities were in the US. Silicon Valley reigns in the number one position, along with New York City, Boston, Los Angeles, and Seattle in the top 10.
Source: Startup Genome, 2021
The research from Startup Genome evaluates 100 metrics including performance, funding, talent, experience and knowledge.
North America is home to most new unicorns
While Europe has more unicorns per city, the US holds the most number of unicorns by volume. As mentioned in the report from European Startups, the Bay Area and the rest of the US lead the way for the number of new unicorns, outperforming the rest of the world.
Source: European Startups, 2021
This data is supported by Statista, which reports that the US created almost 500 unicorns in 2021, compared with nearly 300 in China, 55 in India, and 40 in the UK. The biggest and most profitable unicorns in the US were SpaceX, Stripe, and Instacart.
Source: Statista, 2021
Summary
Since the pandemic, research is indicating that now is a good time to start a new business. Ecommerce is one of the top industries for startups alongside other tech and digital businesses. The reason for this is the generally lower startup costs involved with online trade. Many traditional barriers such as slow delivery, expensive warehousing, physical store rent, and finding a supplier do not apply to today's entrepreneurs - particularly in dropshipping. Globally, the success of startups has been unprecedented, which is motivation and assurance for those that are thinking about creating one.
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