The most important business startup statistics in Australia

Australia'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 Australian business, here is your map:

2.7%

Growth in new companies

355,722

New companies founded

974

Companies founded every day

40

Companies founded every hour

Headline Figures on Australian SMEs

How many companies are there in Australia overall?

  • 2,375,753 businesses were active as of June 30 2020. [1]
  • Between FY 18-19:
    • net growth in Australian businesses of 2.7%, or 62,462.
    • 15.4%  new companies entered the market, that is 355,722 in absolute terms.
    • 12.7%  exited the market, making up 293,260 exits.

How many people work for SMEs?

  • Small and Medium Enterprises provide almost half of the country’s employment – 4.8 million people work for small businesses out of a total of 10.5 million employed, totaling around 45.7 % of Australia’s workforce. Medium Enterprises made up 24.3% of the total.[2]

How much do small and medium-sized companies contribute to Australia’s GDP?

  • Between the years 2010−2014, small businesses contributed on average 38.4% to the country’s GDP. [3]
  • Medium-sized companies accounted for an additional 11.8 % taking the total for SMEs to around half the country’s GDP.[3]
  • Large businesses, on the other hand, though much fewer in number accounted for the other 49.8%.[3]

Startup Failure Statistics

How many Australian startups survive the first 3 years?

  • There are differences across survival rates in different sectors – with ‘Transport, postal, and warehousing’ being a sector with a 45.7% three-year survival rate of business entries, and Agriculture being one with a lower than average yearly exit, hovering at 7-8%, making this one of the more robust industries.[4]

Why do startups fail?

A survey by CBInsights [5] that covered employees and founders from 101 startups analyzed 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 types of startups are most profitable?

According to TechCrunch [6], 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 different levels of turnover for Australian SMEs?

In the 2018-19 financial year, the breakdown in business turnover rates was [4]:
· 93.0% of all AU companies had revenue of less than $2 million.
· 25.0% of all AU companies had revenue of less than $50,000.
· 74.5% of all AU companies had revenue of less than $200,000.

What are the Top Unicorn Startups in Australia?

In early 2019, Canva was Australia’s only (still) private tech company formally valued at over US$1 billion.

In 2020, Airwallex and Judo Bank joined the ranks of the unicorn and were valued at above 1 billion.

Envato and a few similar companies are probably worth more than $1 billion, but given that they’ve not sought funding, these valuations are not public.

Australia’s biggest tech success story to date remains Atlassian, now worth around $45 million and listed on the ASX. [3]


Startup Finance Statistics

How much have Australian startups raised through crowdfunding?

  • The transaction value in the Crowdfunding space is expected to top out at AU$38.4m in 2020, with a downturn of 13.2% compared to last year.[2]
  • The transaction value is estimated to have a yearly growth rate (CAGR 2020-2024) of around 3.4%, with a projected sum of AU$43.9m by the year 2024.[2]
  • The average amount raised per Crowdfunding campaign is AU$5,877 in 2020.[2]
  • Compared globally, Australia ranks comparatively high, with the highest transaction value being in the United States ($448m in 2020).[6]

How much have Australian 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 AU$90.5m in 2020.[2]
  • The yearly growth rate (CAGR 2020-2024) is expected to reach 10.5% with the result that by 2024 it could reach the projected amount of AU$134.8m.[2]
  • Crowdinvesting is by far the largest segment, seeing steady growth and having a projected cumulated transaction value of AU$52.1m in 2020.[6]
  • Even though Australia is a relatively large player in the alternative finance space, the US still leads the pack with a projected AU$1,569m in total transaction value in 2020.[6]
Chat to us about Startup Finance Options

Sources

[1]https://www.abs.gov.au/ausstats/abs@.nsf/0/85372091B76BD119CA257B710014993B?Opendocument

[2]https://www.statista.com/outlook/297/107/

[3]https://crossroads.startupaus.org/overview

[4]https://www.abs.gov.au/ausstats/abs@.nsf/mf/8165.0#

[5]https://www.cbinsights.com/research/startup-failure-reasons-top/

[6]https://techcrunch.com/2019/03/08/which-types-of-startups-are-most-often-profitable/


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.