90% of startups worldwide fail; but data for South-east Asia incomplete
ABOUT 90 per cent of startups worldwide fail, and over two-thirds never even give investors a positive return.
Yet in South-east Asia, the numbers behind startup failure remain a mystery. Isolated figures and the occasional startup post-mortem provide an incomplete picture, and Tech in Asia (TIA) has also found no comprehensive regional summary to date.
As South-east Asia’s startup ecosystem continues to evolve, TIA has put together this piece to help you keep track of macro-level startup failure trends in the region.
Here are a couple of caveats about the data:
- Startups are deemed to be inactive if their web domain returns an error message, a for-sale advertisement, or redirects to an inactive social media page.
- All charts and visuals in this piece refer only to startups that have either publicly disclosed or have verifiable operating status.
Our analysis kicks off with a look at how failure rates vary over a startup’s last year of funding.
The key causes of startup failure have been documented in a variety of studies.
A 2021 CB Insights analysis listed the inability to raise new capital, lack of market need, and competition as the top three startup killers. A separate commentary in the Harvard Business Review cited pursuing “wrong opportunities” and having too many hands on the steering wheel as reasons why startups fold.
While less significant, ecosystem maturity may have a more influential role to play in South-east Asia, given the varying levels of development across countries in the region.
Does a startup’s funding stage also tell us anything about its odds of failure? Early-stage companies are naturally more unstable, but does their relatively smaller size contribute to this fragility? Here’s how startup failure rates compare across company sizes.
As industries boom and go bust, here’s how startup failure rates compare across verticals. TECH IN ASIA
