The most important business startup statistics in the UK

Britain's startup scene has been growing exponentially in the last few years, so we've decided to create a roundup of the most important bits of data that we could find about this success story.

At Fundsquire, we chat with and help startup founders every day, so it's fascinating to understand the statistics behind the whirlwind of everyday business.

We've structured this article around the main questions we have seen from small businesses about startups, so if you're curious about the various statistics on UK business, here is your map:

4.2%

Growth in new companies

672,890

New companies founded

1843

Companies founded every day

77

Companies founded every hour

How many companies in the UK overall?

  • 5.82 million small businesses (with 0 to 49 employees).
  • 35,600 medium-sized businesses (with 50 to 249 employees).
  • 7,700 large businesses (with 250 or more employees).

How many companies are SMEs?

  • SME businesses are 99.9% of companies, for a total of 5.9 million businesses.
  • Small and Medium Enterprises provide three-fifths of employment
  • SME businesses also account for over 50% of the turnover of UK companies.

Where are the UK’s SMEs located?

  • The GOV.uk statistics show that London leads the pack with 1.1 million.
  • The South East is next in line with another 940,000.
  • This makes the S-E of England the most successful in building private sector companies. This region accounts for over a third of the UK’s businesses.
  • The North East, with 152,000 companies, has the least of any English region.

How many UK companies are startups?

  • Compared with the previous year in the private sector of businesses in the UK, the business population increased by 3.5% (+200,000 businesses).
  • 1.4 million of these UK businesses had employees and 4.5 million had no employees.
  • Between 2000 and 2019 the GOV.uk statistics show that the business population increased by 2.4 million (+69%), with the highest rate of increase was +7% between 2003 and 2004, and between 2013 and 2014.
  • London had the highest business birth rate at 15.9%, whereas the North West had the highest business death rate at 13.5%.
  • From 2000 onward the average rate of annual growth in the startup population was +3%.
  • Between 2018 and 2019 there were 21,000 more (+1%) employing businesses and 180,000 more (+4%) non-employing businesses.

Why do startups fail?

A survey by CBInsights that covered employees and founders from 101 startups analysed the reasons why those companies failed. The main results were as follows:

  • 42% of startup businesses fail because there’s no market need for their services or products.
  • 29% failed because they ran out of cash.
  • 23% failed because they didn’t have the right team running the business.
  • 19% were outcompeted.
  • 18% failed because of pricing and cost issues.
  • 17% failed because of a poor product offering.
  • 17% failed because they lacked a business model.
  • 14% failed because of poor marketing.
  • 14% failed because they ignored their customers.

Frequently Requested Stats

How many businesses fail in the first year?

To found a startup means to risk a high failure rate. 20% of businesses fail in their first year and around 60% will go bust within their first three years.

Which type of startups are most profitable?

According to TechCrunch, the most profitable startups are, in order:

  1. E-commerce
  2. Chrome extensions
  3. Mobile apps
  4. Enterprise SaaS
  5. SMB SaaS

What are the most successful small businesses in the UK?

According to SmallBusinessPro, the mist profitable small businesses in the UK are, in order:

  1. Couriers
  2. Coffee Shops
  3. Car Washes
  4. Catering Companies
  5. Internet-based Companies
  6. Landscaping
  7. Food Delivery & Restaurants
  8. Sandwich Bars
  9. Manned Van Services
  10. Professional Services like Accountants, etc.

How many businesses start each year UK?

The yearly GOV.uk statistics show that between 500,000 – 700,000 new startup businesses are launched in the UK every year.

How many startup businesses fail in the UK?

There were 508,865 companies dissolved between the years 2018 to 2019. Not all of these are startups, but if we look at the fact that around 20% of startups are dissolved in their first year, we would expect around 130,000 of these companies to be startups, so around 26% of dissolved companies would be in their first year.


Startup Finance Statistics

According to BVA-BDRC statistics:

  • 45% of SMEs used outside finance in 2019, growing from only 36% in 2018.
  • 37% of SMEs had access to trade credit.
  • 24% had given their company an injection of personal funds
  • Use of any type of ‘Business Funding’ in 2019 was 70%, up from 65% in 2018.
  • 25% of small and medium-sized companies had £10,000 or more of credit balances, which is around 25% of their average turnover.
  • 1 in 3 SMEs reported that their need for external finance was either reduced or nullified by trade credit or £10,000 of credit balances. [1]

How much have UK startups raised through crowdfunding?

  • The transaction value in the Crowdfunding space is expected to top out at £45.5m in 2020.
  • The transaction value is estimated to have a yearly growth rate (CAGR 2020-2024) of around 3.1%, with a projected sum of £51.5m by the year 2024.
  • The average amount raised per Crowdfunding campaign is £11,418 in 2020.
  • Compared globally, the UK is a star player, few other countries have comparable rates of Crowdfunding, with the highest transaction value being in the United States (£340m in 2020).

How much have UK startups raised through alternative financing (Crowdfunding & Crowdinvesting)?

  • The transaction value in the Alternative Financing segment (defined by Statista as the total transaction value of Crowdfunding – rewards-based and Crowdinvesting – equity purchase) is projected to top out at £610.5m in 2020.
  • The yearly growth rate (CAGR 2020-2024) is expected to reach 10.9% with the result that by 2024 it could reach the projected amount of £924.9m.
  • Crowdinvesting is by far the largest segment, seeing steady growth and having a projected cumulated transaction value of £565m in 2020.
  • Even though the UK is one of the strongest players in the alternative financing market, the US still leads the pack with a projected £934m in total transaction value in 2020.
Chat to us about Startup Finance Options

Alexandra Kaschuta

Alex is a tech-focused funding expert, helping innovative companies grow through innovative funding through her work at Fundsquire. She also has a background in journalism, having written for outlets like Vice and many others in the past on topics ranging from philosophy to economics.