Entrepreneurship is all about solving problems and coming up with solutions to overcome barriers. UK business owners in 2023 are no short of obstacles. After all, startups in the UK are not immune to the global crisis and skyrocketing prices combined with supply chain issues.
Nevertheless, startup statistics for the UK leave plenty of room for optimism, showing that British entrepreneurs and venture capitalists are ready to weather the storm. So, here are the numbers and stats to back this claim.
Top 10 Startup Statistics for the UK
The United Kingdom has 122 unicorn startups.
In the first five months of 2022, UK tech startups raised 12.4 billion British pounds.
At the start of 2021, the UK had 5.6 million privately held companies.
London has over one million business enterprises.
In 2020, the average amount raised in crowdfunding campaigns was £11,418.
Women lead only 14% of startups and SME businesses in the UK.
Birmingham was the UK’s regional startup capital for the last seven years.
The average five-year startup survival rate in the UK is 42.4%.
On average, 60% of UK startups fail within the first three years.
38% of UK startups fail because they run out of cash.
The Latest UK Startup Statistics
By October 2022, the private sector in the UK had a combined turnover of 4.16 trillion British pounds.
By all accounts, 2020 and 2021 were among the most challenging years for the UK economy. However, business statistics reveal that privately held businesses in 2022 experienced a 290-billion-pound decrease in the combined turnover compared to 2021.
On a positive note, the earnings increased by more than a trillion pounds compared to a decade ago, i.e., the 2012 fiscal year.
(Statista)
Food delivery company Zapp leads the list of the best tech startups in the UK.
Even though the coronavirus pandemic and lockdown measures are behind us, many Britons rely on online grocery deliveries. Thus, it’s not surprising that Zapp has already raised more than 181 million pounds.
The competition in the delivery market is fierce, but this ambitious startup, launched in November 2020, has secured funding from investors like Atomico, Burda, and Lightspeed.
(Beauhurst)
The United Kingdom has 122 unicorn startups.
As you probably know, unicorns are privately-held companies with an estimated value of billion dollars or more. According to the most recent startup statistics, the UK has more than a hundred unicorns, with 248 more companies classified as “future-corns.”
So, despite the market slowdown, many businesses headquartered in the United Kingdom play a significant role in the global startup scene.
(UK Tech)
In the first five months of 2022, UK tech startups raised 12.4 billion British pounds.
The United Kingdom has more than 950 active tech startups, and these businesses overtook India and China by attracting a record-breaking £9bn in the first three months of 2022. So, the global slowdown in investment had little impact on the UK startup community.
However, tech startup statistics could yet show that investors took a cautious approach in the second part of the year.
(UK Tech)
The UK business birth rate dropped to 11.9% in 2020.
During the pandemic-ridden 2020, entrepreneurship in the United Kingdom suffered multiple setbacks. Therefore, it’s not surprising that business births decreased from around 390,000 in 2019 to 358,000 in 2020.
The business birth rate dropped from 13.0% in 2019 to 11.9% in 2020. On a positive note, the London business birth rate was 14.0%, while the transport and storage industry had a 23.4% birth rate.
(The Office for National Statistics)
General UK Startup Stats and Facts
At the start of 2021, the UK had 5.6 million privately-held companies.
Startups and small businesses are essential for the UK economy, but the business population in the private sector in 2021 decreased by 6.5% compared to 2020.
Nevertheless, the UK had 5.5 million small businesses with 0-49 employees and 35.600 medium-sized privately-held companies with 50-249 employees. In addition, 7.700 enterprises in 2021 were large (250+ employees).
(GOV.UK)
London and the South East of England account for 34% of the UK business population.
Small business startup statistics reveal that solo proprietorships and startups with a self-employed owner-manager comprise 75% of the UK private business sector.
In addition, statistics indicate that the wider London area accounts for approximately a third of the UK business population. On the other hand, the North East has the fewest privately-held businesses, only around 154,000.
(GOV.UK)
London attracts more than a third of the total investments for UK tech startups.
High-value scaleup firms drive the UK tech industry. For instance, these startups received 80% of the £6.3bn investments in UK tech in 2018.
As expected, London is the focal point, and London startup statistics for 2018 showed that 36% of the investments in UK tech went to this area. The East of England accounted for only 15% of scaleup investments.
(Tech Nation)
London has over one million business enterprises.
The wider London area is a significant player in the global business scene, so it’s not surprising that it also dominates the British economy.
In 2022, London’s number of registered enterprises exceeded the one million mark, with the South East area in second place with 844,000. The North East of England and Northern Ireland had the fewest business enterprises, with 128,000 and 155,000, respectively.
(Statista)
UK Business Startup Statistics and Trends
In 2020, the average amount raised in crowdfunding campaigns was £11,418.
Many UK entrepreneurs rely on crowdfunding as an alternative option for financing their businesses and projects. Moreover, the United Kingdom is among the leading countries per average amount raised in crowdfunding campaigns.
For instance, the cumulated transactions in the UK had a projected value of £45.5m in 2020.
(Fundsquire)
Small and medium enterprises account for more than 50% of the turnover of all UK companies.
Besides the significant economic effect, startups and SME businesses provide around three-fifths of employment for the UK population.
Likewise, startup business statistics show that, from 2000 onward, the average annual growth rate in the UK startup population was +3%.
(Fundsquire)
Women lead only 14% of startups and SME businesses in the UK.
The British startup scene has a long way to go regarding gender equality, given that men aged 45 to 54 lead most enterprises. In addition, 25% of leaders are men aged 35 to 44, while 26% belong to the 55-64 category.
Similarly, members of minority ethnic groups lead only 8% of UK startups and small businesses.
(Startups)
30% of ethnic minority entrepreneurs have recently invested in a product or service innovation.
Startup statistics reveal that enterprises run by ethnic minority entrepreneurs contribute £25 annually to the UK economy, despite the obstacles they face.
In addition, these entrepreneurs are more innovative than their counterparts, given that only 19% of white male entrepreneurs recently invested in new products or service innovations.
(Forbes)
Birmingham was the UK’s regional startup capital for the last seven years.
The UK has a thriving startup scene with many active areas, and Birmingham has the highest volume of startups besides London. For instance, as many as 18,394 new companies started life in Birmingham in 2020.
Also, business startup statistics for the UK reveal that Birmingham has had a 26.8% increase in the business birth rate since 2019.
(Startups Magazine)
The estimated value of the London startup ecosystem is $47 bn.
As active as other cities might be, the London ecosystem is the king of startups in the United Kingdom. After all, it shares third place with Beijing on the list of the top-rated Startup Hubs on the planet, after Silicon Valley and New York City.
For example, London hosts 4,489 investment companies, 250 startup incubators, and nearly 200 accelerators, supporting an estimated 6,900 UK enterprises.
(Startups of London)
Startup Success Statistics and Failure Rates
Only 23% of UK startups progress to a later evolutionary state within the first five years.
Success stories are captivating and exciting, but on average, only one in four British entrepreneurs successfully scale up their startups within the first five years.
Moreover, nearly 60% of UK small businesses and startups fail within the first three years. So, despite an ambitious start, many enterprises don’t live to see a successful exit.
(Beauhurst)
The average five-year startup survival rate in the UK is 42.4%.
The latest startup failure rate statistics show that less than half of UK startups make it past the five-year mark. Namely, startups from Bristol have the best chances of long-term survival because survival rates in this city are the highest at 44.44%.
On the other hand, Plymouth has the lowest five-year startup survival rate, with 30.7% on average.
(Business Comparison)
The average one-year startup survival rate in the UK in 2019 was 88.3%.
According to 2019 data, the average startup success rate in the UK dropped from 89.3% in 2018 to 88.3%. Therefore, approximately one in ten UK startups failed within the first twelve months.
Of course, failure rates increase with years in business, and data showed that only 39.6% of British enterprises launched in 2015 had been active in 2020.
(Statista)
On average, 60% of UK startups fail within the first three years.
Even though startup ecosystems in the United Kingdom offer plenty of opportunities for ambitious entrepreneurs, the average UK startup failure rate could discourage many.
For instance, the latest statistics reveal that nearly 20% of UK enterprises go bust within their first year. Likewise, almost two-thirds fail within the first three years.
(Fundsquire)
38% of UK startups fail because they run out of cash.
Most British startups fail because they run out of funding, but data shows that 35% fail because there is no market need for their product or service.
Likewise, 20% fail because of fierce competition, while 19% of UK startups go bust because of a flawed business model.
(CB Insights)
Conclusion
Despite the financial and political uncertainty, startups and small businesses continue to power the UK economy. Most importantly, startup statistics for the UK show growth in company incorporations, with tech-oriented businesses leading the pack.
Of course, it’s not all roses, and UK companies are not immune to inflation, skyrocketing prices, and supply chain issues. Surviving these challenges will be challenging, but there’s room for optimism for ambitious entrepreneurs and business owners across the UK.
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