Astonishing UK Startup Statistics for 2023
Have you ever read about up-and-coming companies raising hundreds of millions of dollars and asked yourself, how do they do it? More importantly, what does it take to run a successful startup and get major investors to pour funds into your ideas and vision?
The startup statistics for the UK are very clear to reveal that the country is one of the best places in the world to start a business. In recent years, some of the most successful British tech and fintech companies have placed London shoulder-to-should with New York and raised incredible amounts of funds. Of course, we are not talking Silicon Valley levels yet, but England’s capital is slowly and steadily climbing the ladder.
Feel free to check out the statistics below and learn more about the startups in the UK, their survival rates, their founders, the investments they receive, and plenty of other details.
Top 10 Startup Statistics for the UK
753,168 new startups were founded in the UK between March 2021 and March 2022.
The birth rate of UK companies has been fluctuating between 11.9% and 14.6% between 2015 and 2020.
4.3% of the startups in the UK are showing high growth.
Fintech is the most successful startup sector in the UK, with 1400 fintech sectors showing high growth.
Startups in the UK raised £15.6 billion in 2022.
British tech startups raised £12.4 billion in the first five months of 2022.
Startup teams founded by women received only 0.7% of the total capital invested in startups in the UK in 2021.
25 British startups became unicorns in 2021.
The average five-year survival rate of UK startups is 42.4%.
38% of all unsuccessful startups failed because they ran out of cash and were unable to raise more capital.
General UK Startup Statistics
753,168 new startups were founded in the UK between March 2021 and March 2022.
This is the second-highest number of startups registered in one year in the UK, only topped by the 810,316 startups founded in 2020-21. In the same period, 581,824 companies were dissolved, bringing the total number of registered companies in the UK to 4,894,356, or 3.8% higher than in March 2021. The average age of the companies in the UK register is 8.6 years, with the largest percentage, or 36% of them, being registered for between 1 and 4 years. Additionally, startup company statistics show that 14% of the companies in the UK haven’t been operating for more than one year.
(GOV.uk)
The birth rate of UK companies has been fluctuating between 11.9% and 14.6% between 2015 and 2020.
More precisely, in 2015, it was 14.2%, in 2016, it was 14.6%, in 2017, it was 12.9%, in 2018, it was 12.7%, in 2019, it was 13%, and in 2020 it was 11.9%. The data indicates that companies in the transport and storage industry had the highest birth rate of 23.4% in 2020. Startup statistics further reveal that the largest number of companies, or 54,000, born that year were in the professional, scientific, and technical sector. Finally, London was the region with the highest startup birth rate of 14%, and the largest number of newly founded startups at 89,000.
(ONS)
4.3% of the startups in the UK are showing high growth.
There are 278,450 companies with more than 10 employees in the country and 12,090 of them are classified as high-growing startups. The largest number of the high-growing startups, or 2,690, are located in London. England’s capital also has the largest percentage, or 5.5%, of startups showing high growth. Additionally, UK startup stats reveal that 1,715 of the high-growing startups are located in the South East region, where the high-growth rate is equal to the national average of 4.3%.
(ONS)
Fintech is the most successful startup sector in the UK, with 1400 fintech sectors showing high growth.
The stats show that almost half, or 20 out of the 44 unicorns in the UK, are fintech startups. Collectively, all the fintech startups in the UK have raised £21.9 billion in equity funding, £7.41 billion of which they raised in 2021 alone. Furthermore, 96% of the top 50 fintech startups in the UK are located in London, and 22% of them haven’t been founded until 2017. Some of the most renowned UK fintech startups include Checkout.com and Revolut, having raised £1.36 billion and £1.27 in funding, respectively.
(Beauhurst)
British tech startups raised £12.4 billion in the first five months of 2022.
The first quarter of 2022 has been particularly successful for these startups as they were able to raise £9 billion during those three months. In comparison, in Q1 of 2021, tech startups in the UK raised £6.3 billion, indicating a 42% increase in 2022. Furthermore, the £12.4 billion British tech startups raised in less than half of 2022, is already more than the £12 billion they raised throughout the entire year of 2020.
Moreover, the stats show that London-based startups raised £11.3 billion, putting it at the top of the list of European hubs for investment. Besides London, Bristol and Oxford are also among the top 20 European cities, having raised £0.3 billion each.
(UK Tech, Dealroom)
Startup Business Statistics
Startups in the UK raised £15.6 billion in 2022.
As of the first half of 2022, British startups have received more venture capital investments than startups in India (£14.8 billion), and China (£11.8 billion). The only country in the world whose startups raise more funds than the British is the USA with £123.4 billion. British startups stand at the top of the list of investments in Europe, with more than double the investments raised by startups in France (£7.6 billion) and almost triple the investments raised by German startups (£5.5 billion), according to the latest global startup statistics.
(Dealroom)
British crowdfunding platforms facilitated 573 rounds of equity fundraising in 2022.
For comparison, just 11 years before, in 2021, crowdfunding platforms were only able to facilitate eight rounds of equity fundraising. Now, they are the third most active investor type in the UK, only behind venture capital firms and business angels, who are responsible for 1,359 and 602 rounds, respectively.
Furthermore, the data reveals that the majority of equity crowdfunding in the UK can be attributed to two platforms, Crowdcube and Seedrs. According to the startup funding statistics, Crowdcube facilitated 234 funding deals, amounting to £198 million, while Seedrs facilitated 272 deals, amounting to £126 million of funding.
(Beauhurst)
Startup teams founded by women received only 0.7% of the total capital invested in startups in the UK in 2021.
In comparison, teams founded by men received 88.5% of the investors’ capital, while mixed teams received 10.8%. This fact might be startling, but the data suggests that this is a common practice. According to the business startup statistics for the UK, the largest percentage of capital that all-women founding teams received in the past five years in the UK is 2.4% in 2018. In the same year, all-men founding teams received 83.2% of the capital, which is their lowest point in the previous five-year period.
(Unconventional)
41.38% of the female-led startups backed by investors are in a child-related industry.
In addition, 36.36% are from the wellness and beauty industries, and 34.75% are fashion industry startups. The UK business startup statistics aren’t clear if this is the case because there are more female-led startups that seek funding in these industries, or simply because this is what investors believe women are good at. Whatever may be the case, there are significantly fewer female-led startups that received funding in sports (16.52%), gaming (14.55%), fintech (13.36%), energy (12.76%), robotics (10.99%), semiconductors (8.28%), etc.
(Unconventional)
25 British startups became unicorns in 2021.
With that, they brought the total number of UK companies worth over £1 billion to 63, 44 of which are active, 17 of which have exited, and two of which are inactive unicorns. The UK startup success statistics show that this is the largest concentration of new unicorns being born in one year in the country.
Furthermore, the stats show that three in every four unicorns in the UK are based in London, and they receive close to 70% of the equity and venture capital investments. Moreover, the data indicates that only 6% of the billion-pound companies in the UK were founded by women. Finally, the average age at which a startup becomes a unicorn in the UK is seven years.
(Beauhurst)
Startup Failure Rate Statistics
38% of all unsuccessful startups failed because they ran out of cash and were unable to raise more capital.
Besides running out of funds, another common reason why startups fail is that the market doesn’t need them, which is the case for over a third, or 35% of the startups. Furthermore, 20% of failed startups got crushed by competition, 19% had a flawed business model, and 18% were unable to tackle certain regulatory and legal challenges. Additionally, a large percentage of startups that fail struggle with pricing issues, don’t have the right team, have a poor product, or time it incorrectly, suffer disharmony between team members or investors, or simply run out of passion for their project.
(CBS Insights)
The average five-year survival rate of UK startups is 42.4%.
The city with the highest startup survival rate in the country is Bristol, with 44.4%. The only two other cities where startups have a higher-than-average survival rate are Brighton and Hove and Leeds, with 44.1% and 42.9%. The five-year startup survival rate in London is 39.35%, while Plymouth has the worst startup survival rate of 30.73%.
Moreover, the South West region has the best startup success rate in the UK, as 45.59% of the startups founded there make it over the five-year mark. Finally. the most successful borough in London is Bromley, where 46.63% of the startups survive for at least five years.
(Business Comparison)
88.3% of the British startups founded in 2019 made it to 2020.
Although the global failure rate is higher than 90%, historical data indicates that 89.3% of the British startups founded in 2018 survived the first year, but by 2020 their percentage dropped to 69.8%.
Moving on, 87.6% of the startups founded in 2017 survived their first year, 69.3% survived their second, and by their third year, the percentage of survived startups dropped to 53.4%. Lastly, startup failure statistics reveal that 91.5% of the startups founded in 2016 survived their first year and were reduced to 68.3% by year two. There were exactly 52% of survived startups in their third year, while only 43.1% made it to 2020.
(Statista)
54.42% of the creative startups founded in 2016 in the UK survived for four years.
More precisely, there were 42,170 startups from the creative industries founded in 2016, but only 22,950 made it to 2020, without dissolving. Year-by-year startup failure rate stats show that 94.90% of the startups made it to 2017, 78.11% made it to 2018, and by 2019 there were only 26,890, or 63.77%, of the initial startups remaining. Advertising and marketing startups with 48.31% and publishing startups with 48.38% had the lowest survival rates among them. On the other hand, architecture startups had the highest survival rate of 57.55%.
(ONS)
316,000 UK businesses were dissolved in 2020.
In the period between 2015 and 2020, the death rate of British startups fluctuated between 9.9% and 11.9%. To be exact, startup statistics show that the death rate of UK companies in 2015 was 10.4%, in 2016, it was 9.9%, in 2017, it was 11.9%, it was 10.8% in 2018 and 2019, and in 2020 it was 10.5%.
The industry with the highest death rate in 2020 was transport and storage, with 14.7, while the largest death count was in the Professional, scientific, and technical sector where 60 startups were dissolved. By region, London had both the highest death rate of 12.1% and the largest number of businesses dissolved with 77,000.
(ONS)
FAQs on Startup Statistics for the UK
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Conclusion
In summary, the UK is home to some of the most successful startups in the world and undoubtedly the best country for startups in Europe. Particularly London, which is considered the startup capital of Europe, and the second-best tech startup hub worldwide, according to the most recent tech startup statistics. However, at the same time, starting a business in London means competing with the best of the best, which is why many startups have short lifespans.
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