27 Startup Statistics With a Focus on Canada

Unlike other company models, a startup is looking to find and quickly execute its business plan in a way that radically impacts the current market. So just how many of these businesses reach their goals? What exactly do these startup statistics reveal?

Keep scrolling to find out!

Top 10 Startup Numbers You Should Know About

• Roughly 100 million startups open each year.
• Nine out of ten startups will fail.
• The average startup has less than a 1% chance of becoming a unicorn.
• There are around 95,000 new businesses started in Canada per year.
• 98.9% of all Canadian businesses are small to medium-sized firms.
• 56% of Canadian startups wish to be acquired.
• Around 260 companies are founded in Canada every day.
• The average wage in the US for a startup employee is US$80,958 per year.
• Only 20% of startups succeed in the first year of operation.
• In 2020 a total of 66 venture capital-backed startups joined the unicorn club.

General Startup Statistics

There are millions of startup companies worldwide! How many turn a profit or revolutionize an industry, and just how many fail? In this next section, we’ll supply some answers to these questions.

1. Roughly 100 million startups open each year.

(Get2Growth)

Startup statistics from 2020 suggest that although 305 million businesses can be referred to as startups each year, only around 100 million actually open per year. Furthermore, 1.35 million of these new business ventures are tech startups.

2. Only 20% of startups succeed in the first year of operation.

(Investopedia)

On the other hand, the research showed that 21.5% failed in the first year. Furthermore, around 30% of these businesses close in their second year, 50% after five years, and 70% won’t make it past 10 years.

3. Nine out of ten startups will fail.

(Investopedia)

According to specialists, this high startup failure rate is usually due to lack of money, venturing into the wrong market, lousy marketing and partnerships, too little research conducted, and a lack of industry knowledge.

4. The average startup has less than a 1% chance of becoming a unicorn.

(One Entrepreneur)

Unicorns are very rare startups that are worth $1 billion or more. Hundreds of startups have gained this moniker despite these overwhelming odds, such as Uber, Pinterest, and Reddit.

These companies usually have a rapid startup growth rate, often reaching their incredible value in seven years or less.

5. According to startup statistics from 2021, the highest valued Unicorn company globally was ANT Group.

(Statista)

ANT Group is a Chinese fintech company that was valued at US$200 billion in April of 2021. Moreover, data from the same period indicates there were 590 unicorns worldwide, the highest concentration being in China and the US.

Canadian Startup Statistics

Let’s see how Canada measures up to the rest of the world. Do the figures and statistics in Canada differ in comparison to global trends, or are they the same? Find out below!

6. Around 95,000 businesses open in Canada each year.

(Fund Squire)

And according to startup statistics in Canada, small and medium-sized businesses employ over half of the population. In fact, 12.9 million people work for these businesses, which is around 85% of the Canadian workforce.

7. Of 250,000 surveyed entrepreneurs in Canada, 51% were women.

(Startup Canada)

This data comes from a 2018 national census distributed to Startup Canada entrepreneurs and enterprise influences. Furthermore, startup business demographics reveal that 29% of these women were people of colour, up from 22% from the previous year.

8. According to statistics on startup failure, 87,998 businesses closed in Canada in 2020.

(Fund Squire)

There is no doubt that the pandemic and subsequent restrictions had a lot to do with these closings. However, on a positive note, data from 2021 indicates that 42,160 businesses were opened in Canada and only 39,216 closed — less than half from 2020.

9. According to startup survival rate stats, 70.4% of Canadian micro-enterprises survive after five years on the market.

(The Balance SMB)

These “micro” firms usually have only one to four employees, and when compared to other small businesses, they have a slightly lower failure rate. For instance, business startup statistics show that 66.9% of other small companies stay afloat into their fifth year.

10. 99.8% of all Canadian businesses were small- to medium-sized in 2019.

(Wage Point)

Moreover, nine in ten Canadians in the private sector work for small or medium-sized businesses. A company with less than 100 employees is considered a small business, and a medium-sized business is a firm with 100 to 499 paid workers.

11. In Canada, 42% of startup businesses fail because there’s no market demand for their products/services.

(Fund Squire)

Startup statistics in Canada also show that the second most significant problem is running out of money (29%), while the third most prevalent reason for failure is not having the right business team.

Also, according to marketing statistics, 14% of startup businesses failed because of poor marketing strategies.

12. In 2018, there were around 3.5 million entrepreneurs in Canada.

(Startup Canada) (BDC)

Furthermore, around 44,700 Canadians started businesses that same year, which was the highest number in the past decade.

According to business startup facts, this indicates a resurgence in entrepreneurial activity in Canada, which had increased three out of the past four years.

13. Roughly 28% of all entrepreneurs in 2018 were women.

(BDC)

By comparison, in 1978, this amount was only 11%. In numbers, that’s roughly 241,000 versus 49,000. Experts predict if these small business startup demographics and trends continue, by 2030, the number of male and female entrepreneurs should reach parity.

14. The majority of Canadian startups wish to be acquired.

(Silicon Valley Bank)

According to startup business facts from 2019, 56% of Canadian startups hope to build a successful brand and be acquired. Furthermore, only 19% want to stay private, 13% seek to take the IPO route, and 12% are undecided.

15. Funding is the greatest challenge for most Canadian entrepreneurs (75%).

(Startup Canada)

Small business startup statistics and surveyed entrepreneurs state that sales are the second biggest challenge (63%), and ensuring proper and regular cash flow is the third (62%).

16. British Columbia and Saskatchewan have the highest small to medium-sized business employment percentages.

(Wage Point)

In fact, both provinces are at 98.3%. Although the Territories and Manitoba have the lowest percentage of small business employees, they are still at 97% and 97.6%, respectively. Small to medium-sized businesses make up around 38.4% of Canada’s GDP.

17. Experts estimate that around 260 companies are founded every day in Canada.

(Fund Squire)

This figure translates to around 11 companies founded every hour. Furthermore, according to tech startup statistics, the most profitable Canadian startup businesses are eCommerce, Chrome extensions, and mobile apps.

Global Startup Jobs Statistics

Now that we’ve gone over some general info and figures pertaining to Canada, let’s look at some global startup statistics regarding jobs in the industry.

18. In 2020, there were 3,114,111 new jobs created through startup businesses in the US alone.

(Statista)

This stat charts the jobs created by startup businesses in the US from 1994 until 2020. These startup hiring statistics reveal that companies less than a year old produced the most jobs in 1999 when the total number was 4,736,499.

19. India’s total number of small and medium-sized businesses was more than 63 million in 2020.

(Statista)

Moreover, in 2015, this segment contributed 30 trillion Indian rupees, and this output from these companies accounted for almost 31% of the total GDP contribution the same year.

20. The average startup employee in the US earns US$80,958 per year.

(Zip Recruiter)

However, according to startup employment statistics, the average pay range for a startup job in the US can vary by as much as US$63,500, suggesting there are many opportunities for pay increases depending on years of experience, location, and skill.

21. In 2018, Poland had the most female startup founders in Europe.

(Statista)

In fact, business startup by women statistics revealed that nearly 25% of Polish startup founders were female.  Portugal only had 5.1% of female startup founders on the other end of the spectrum, making the country the last on the list.

22. In Europe, fewer than 1% of tech startup founders identified as Black/African/Caribbean in 2019.

(World Economic Forum)

In terms of diversity, the latest startup founder stats are pretty much lacking across the board. According to a 2019 Crunchbase survey, roughly 77% of US startup founders are caucasian or white. In Europe, this concentration is even higher, with 84%.

Exciting Startup Facts

This last section will share a few success stories and fun facts. After reading about all of the startup failures, you might not believe it, but the world of startups has some pretty unique success stories as well.

23. The average age of a successful startup founder Is 45 years old.

(Harvard Business Review)

However, this depends on many factors and might differ in certain areas. In software startups, the average age is 40. Startup stats and data from the US Census Bureau suggest that the average age when entrepreneurs founded their startups was 42.

24. Most successful startup owners are Stanford University graduates.

(Statista)

As a part of startup success statistics, it’s exciting to mention that in 2020 Stanford University has the most graduates (465 graduates, to be precise), with a well-performing startup valued at over US$1 million. Other leading universities include MIT and Harvard.

25. Uber, a household name, also began as a startup in 2009, now has around 22,000 employees.

(Uber)

As of now, the San Francisco-based company is present in over 60 countries and 700 cities worldwide. Now, this is a true startup success story.

26. In 2018, the USA had the most unicorn startups.

(One Entrepreneur)

Startup business stats show that 47% of all unicorns are in the US. Other G8 countries (France, Canada, Japan, and Germany) have less than five billion-dollar startups, while the USA has a rather impressive 119.

27. In 2020, a total of 66 venture capital-backed startups managed to join the unicorn club.

(Embroker)

Over six months, 66 new startups managed to get to the coveted unicorn status. What’s more, startup statistics suggest that there are a total of 600 unicorns across the globe valued at somewhere around US$2 trillion.

Conclusion

All in all, it’s clear that with such a low startup success rate, this is a highly competitive industry. If you want to create a company and truly impact the market, you need proper funding, a diverse team, and a deep understanding of your product/service and customer.

Hopefully, our article gave you a better understanding of the ever-growing world of startups. If you’ve found this material helpful or have anything to add, please leave a comment below.

FAQs

How many startups start every year?

According to startup facts from 2020, although there are 472 million entrepreneurs worldwide and 305 million startups annually, only 100 million startups will actually open each year.

(Net Shop ISP)

How many startups fail?

According to several sources, around 90% of startups will fail, with about 20% of them closing within a year of operation. Data also suggests that 34% of them close after only two years, and 50% of them close after their fifth year.

So, overall, only one in every ten startups will become a successful long-term business.

(Medium)

Why do most startups fail?

According to analysts, there are many reasons why startups could fail. However, here are the most common issues experienced by failed startups:

• Following a non-viable business model (26%)
• Customer Development Issues (17%)
• Lack of Market Need (17%)
• Lack of Investor Interest (17%)
• Technical or Product Issues (15%)
• Not enough Traction (15%)
• Inexperience (13%)
• Team/Investor Disharmony (13%)
• Lack of Focus (13%)

(FractL)

What percentage of startups succeed?

Unfortunately, it’s much easier to find stats on startup failures than success stories. However, according to several sources, 90% of startups will inevitably fail. Therefore, we can assume that only around 10% become successful businesses.

(Investopedia) (Medium) (Small Business Trends)

What percentage of startups become unicorns?

For starters, let’s clarify the meaning of unicorn in this context. Unicorns are startups that reach a value of over US$1 billion. Data suggests that startups, on average, have less than a 1% chance of becoming a unicorn.

(One Entrepreneur)

What makes a successful startup?

If you’re interested in setting up a company in Canada, first and foremost, having enough money to support a new business is imperative for long-term success. However, capital alone can’t build a successful company.

According to startup statistics, an entrepreneur also needs a deep understanding of the market they’re entering, a diverse team, and a strong vision of what the company should be.

(Forbes)

Sources:

• BDC
• Embroker
• Forbes
• FractL
• Fresh Books
• Fund Squire
• Get2Growth
• Harvard Business Review
• Investopedia
• Medium
• Net Shop ISP
• One Entrepreneur
• Silicon Valley Bank
• Startup Canada
• Startup Canada
• Statista
• Statista
• Statista
• Statista
• Statista
• The Balance SMB
• Uber
• Wage Point
• World Economic Forum
• Zip Recruiter