How Many Tech Startups Are Created Each Year?
Every year, many entrepreneurs and business owners establish new businesses.Most of them have high hopes for their business future and are pretty excitedabout it. However, for small businesses, statistics show that most of them donot last for more than four years. And this is a sad reality.However, despite their failure rates, there are still a big number of smallbusinesses that get through that critical period and had managed to survive.How many tech startups are created each year? What are the exact numbers ofstartups that are there and what industry have high success rates? In thisarticle, we will show you some gathered statistics of those startups in thebusiness industry.But to start off, let’s first define it.
What Are Tech Startups?
A tech startup is a company that provides technology products or services tothe market. They are companies that deliver either technology products orservices that are new in the market or deliver existing technology products orservices in a different way.By definition, a startup is a company or a business in different forms thatmake development and research about a new thing that is to be introduced tothe market. In history, startups are only limited to tech companies, but asyears go by, technology has become a standard factor, which has made thenature of startups to become innovative and scalable in growth.
London Tech Map 2017
Compass estimates that there are between 3,000 and 5,000 active tech startupsin London, with a combined value of £34 billion, making London the fourthlargest startup ecosystem in the world. For software developers working in themetropolis, London isn’t just about startups – the inner city alone is home toan estimated 40,000 tech companies. A recent parliamentary report estimatesthat the shortage of digital skills costs the UK economy £63 billion per year.Needless to say, software developers in London are in high demand.Honeypot is a developer-focused job platform, headquartered in Berlin,Germany. To celebrate our expansion to London, we created an interactive techmap with over 800 tech companies and 12,000 job postings. The companies aresorted by industry and programming language to judge which developer skillsare most in demand in London.This blog post gives a summary of the findings from the research. For a fulloverview of our research, read our London Tech Map 2017 report.
Where are London’s tech companies located?
Through our research, we examined the most popular locations, by tube stationand borough, for tech companies and the most commonly used programminglanguages in London.Old Street has by far the highest concentration of tech companies in London.For those that know the city, this should come as little surprise. The OldStreet Roundabout, which is located in East London, is also referred to asSilicon Roundabout due to the high density of startups located in the area.The area is also home to TechCity, which began life as Silicon Roundabout, anorganic initiative to support East London’s startups. Since 2011 it has beentransformed. Former Facebook executive Joanna Shields, led the rebranding ofSilicon Roundabout to TechCity. Today, the organization has a budget of £50million and a mandate to make London as attractive as possible for techcompanies.The Northern Line, which stops at Old Street Station, is the most denselypopulated line for tech companies in London.East London’s association with startups may not last however. Research from2015 showed that the number of registered technology companies in the EC1Vpostcode dropped by 227 over the course of 6 months, from 2,480 in the secondquarter of 2015 to 2,421 in Q3 and 2,253 in Q4, a 9.2% fall.Tech companies headquartered in East London aren’t just paying for a hiplocation. They are also paying for proximity to developers. StackOverflowreported that over 80% of developers registered in London live in the east ofthe city.
Where are the majority of developer jobs in London located?
Startups located in the north-east borough of Hackney and the north-westborough of Camden, received the most VC investment in 2016, according toBeauhurst. But the more central boroughs of Islington and Westminster have thehighest concentration of developer jobs.
Developer Salaries in London
According to Balderton Capital, the average developer in the UK is paidroughly £55,000, making developers in the UK the fourth highest paid inEurope, following Switzerland, Norway and Denmark.When looking more closely at the breakdown of salaries in the UK for techpositions, Engineering Managers come out on top, with an average salary ofapproximately £77,000. Following Engineering Managers are DevOps Engineers,Product Managers and Backend Developers. The more creative side of the productrank lower: UX/UI Developers, Frontend Developers and Designers are the lowestpaid positions in tech.Living costs tend to be one of the biggest concerns for people in London.
The Products of London
While programming language and salary are motivational factors for manydevelopers when choosing their new job, others are drawn to the productscompanies are building. We divided our sample companies by industry to showthe breadth of products on offer for developers in London.
FinTech in London
FinTech is the most common segment amongst London’s tech companies (15%).London’s largest industry is finance and the city is the largest financialexporter in the world, making it a prime location to establish a FinTechstartup. FinTech refers to companies who use technology to offer existingfinancial services at lower costs or to offer new tech-driven solutions.The UK is the fastest growing region for FinTech investment in the world. UKFinTech firms raised £4.1 billion of venture capital between 2010 and 2015,compared to £3.4 billion raised across the rest of Europe combined.The FinTech industry in London benefits from strong government advocacy.Recent initiatives include a “regulatory sandbox” implemented by the FinancialConduct Authority (FCA), which allows businesses to test new financialproducts without having to comply to normal regulation.FinTech startups are popular with consumers because they offer cheaper andfaster online services. Household names in the city include Y Combinator-alumni GoCardless and money transfer service TransferWise. A whole host ofcompanies are offering new solutions for lending. LendInvest enables peer-to-peer mortgage lending, Iwoca offers small business loans, and RateSetter andZopa allow people to lend to others from their savings.Other companies are challenging more traditional financial services providers,such as DueDil, a financial information provider akin to Bloomberg, and eTorowhich allows you to automatically copy trades of top traders. For developerslooking for a challenging tech product, perhaps one of the most interestingcompanies located in London is Blockchain, the world’s most popular bitcoinwallet and bitcoin software provider. Their recent article on blockchaintechnology covers everything from how it works to things that can go wrong.InsurTech, which is sometimes classified within FinTech, is one of London’sfastest growing industries. The insurance industry has been slightly slower toreact to digital disruption than other industries, but over the last year ithas picked up pace significantly. Venture Capital investment in insurancetechnology companies doubled in 2016 to almost £1 billion.For more insight into London’s industries and products, check out our researchreport.
The Future of London’s Tech Scene
It is widely accepted that Silicon Valley’s tech dominance comes from itsability to attract the best talent from around the world – 70% of softwaredevelopers working in Silicon Valley in 2013 were born outside of the US.Currently, 53% of employees in startups in London are foreign-born. Withuncertainty surrounding the right to work in the UK due to Brexit, manyEuropean developers are hesitant to count London as a destination of interest.However, London’s community of entrepreneurs have been unwavering allies inensuring UK companies have access to a diverse workforce. In 2015, a number ofcompanies joined together and sent a a letter to David Cameron to urge him notto cut immigration to the country. The Tech Nation Visa scheme and ExceptionalTalent Scheme allow companies to hire skilled non-UK born technical talent.Currently, the Home Office allocates just 200 and 1000 spots respectively toeach program. In a post-Brexit world, tech companies will continue to lobbygovernment for more access to international talent. These schemes will likelybe extended and other special conditions established for skilled Europeantechnical workers, as the UK seeks to protect one of its most valuableindustries.London is one of the most attractive locations in the world to build asuccessful career. Developers interested in the city will find a diverseselection of open positions with a huge variety of products. Outside SiliconValley, London is the most likely place to birth the next unicorn.
Why Tech Startups Do Very Well In NYC
The NYC tech industry is quickly catching up with Silicon Valley. There seemsto be the right mix for startups to grow and prosper in NYC. Here are somefactors that are propelling tech entrepreneurs to open doors in Silicon Alleyand why they’re choosing to launch here instead of anywhere else.
The world fastest growing tech startup ecosystem
NYC has the fastest growing tech ecosystems in the world. In NYC, startupshave self-supporting communities, that prop each other up during theirdevelopment. This means that the skills and services that the startups needare found within the local ecosystem.New York is also home to world-leading universities that provide opportunitiesfor entrepreneurs to research their ideas and refine them to make functionalsolutions. Moreover, tech startups in New York City also have access tomultiple European and South American startup centers.The Tech Cornell campus on Roosevelt Island will be opening this year. Oncampus, tech entrepreneurs will gain skills in areas that are in high-demandto help them take their startups to the next level.
Leadership is committed to helping tech startups expand
The city’s leadership, including the mayor and the local authorities, aredevoted to providing an enabling environment for tech startups to thrive. Theyhave been championing for the growth of coworking environments as well as taxcuts to make it possible for startups to get their footing in the early stagesof their business.