Average Growth Rate For Startups in 2025

Most startups set revenue targets by gut feel—or simply copy the hockey-stick curves they see in pitch decks. The result? Forecasts that wildly under- or over-shoot reality, making it hard to plan cash needs, hire judiciously or win investor trust. With revenue expectations creeping earlier and earlier in the startup lifecycle, it’s more important than ever to get this right from day one.

There’s very little data available about startup financial projections, making it difficult to set expectations and benchmark the future. Equidam, through its valuation platform, took into account the financial projections for a sample of more than 140.000 early stage ventures across the globe. Companies providing forecasts have an intrinsic incentive in being accurate one possible, receiving a fair valuation.

Benchmarks to estimate the growth rate for startups

Forecasting revenues really comes down to a growth rate. No matter if the company starts from scratch or not, the final outcome is the growth rate and the argumentation that makes it achievable.

In our analysis, we look at the latest year of financials (YTD) plus the next three years of forecasted revenues. From these, we are able to study the annual revenue growth coefficients for the upcoming 3 years.

The average company forecasts a growth rate of 522% in revenue for their first year, 236% for the second, and 136% for the third.

This means that a company that grossed $100,000 Year to Date (YTD) will forecast roughly $622,000 for the next year, $2,089,000 for the following and $4,927,000 for the third.

Growth rates for startups however vary widely by stage of development of the venture. Companies that start from scratch will of course find it easier to grow their revenues at higher percentage rates; a smaller number is easier to grow than a large one.

To benchmark the companies against the size factor, we divided them into 2 classes of TTM revenues: companies with lower than $250,000 in starting annual revenue compose the “small” group, and above $250,000 the “large”

On top of this, different sectors have different setup times, adoption speed, sales cycles and market opportunities. Finally, countries have different home-market sizes, access to funding and talent etc. We’ll also explore those differences below, looking at small cap and large cap companies by regions and industry categories.

• The US leads in small cap growth, likely due to a favorable startup ecosystem.

• India and the Middle East also show strong early-stage growth, reflecting emerging markets’ momentum.

In the small companies subset the country leading for projected growth is by far the United States with 1840% on the first year and followed by the Middle East with 1648%. It’s also notable how much the variance flattens out in year three for all except Africa which remains more conservative, which may represent a different balance of industries – more on that later.

The large group tells a different story. The growth rate projected by large companies is structurally slower than the one projected by smaller companies. We can see India taking a lead in growth for this category in year one, which it loses to Europe in year 2, and resumes in year 3. The United States stays in second place until year 3, at which point it falls to the back of the pack.

• While India‘s large companies are growing faster than in other regions, the overall rates are still well below their small cap peers.

The sector with the highest growth expectations is …

What about different sectors then?

Across all companies, the sector that projects the highest growth rates is Personal & Houshold Products & Services, with a strong 719% average growth in year 1, 156% in year 2, and 54% in year 3, while the industry projecting a slower growth is Cyclical Consumer Services, with 226% in year 112% in year 2 and 83% in year 3.

Among companies in the Small class, Banking & Investment Services has the leading projected growth in year 1, but falls to second place in year 2. The Software & IT Services industry does predictably well, moving steadily from third place up to the lead in year 3. This is supporting the general characteristics of the two industries, with the progressive digitalization of financial services allowing for faster expansion, while products are more limited by challenges with logistics/distribution.

In general, Banking & Investment Services is the industry forecasting a higher growth in large companies as well, though again it doesn’t manage to maintain the lead in year 2, but regains it in year 3. The Software & IT Services industry again forecasts fairly strong and steady growth, and starting in second place it finishes in second place for year 3 with forecasted growth of 229.20%. Indeed, all of the industries project a relatively similar growth rate in year 3, at an average of 54%, with just Cyclical Consumer Services and Food & Beverages slipping below the 100% mark

• Banking & Investment Services leads in both small and large cap segments, highlighting fintech or tech-enabled finance firms that may be scaling rapidly.

• Food & Beverages and Cyclical Consumer Products also demonstrate strong, consistent performance—these sectors may be buoyed by recurring consumer demand and scalable product models.

• Cyclical Consumer Services showed the lowest growth, especially in the large cap segment. This may reflect challenges in scaling service delivery models or reliance on variable consumer discretionary spending.

Comparison with 2023: increased optimism

In general, the expected growth by entrepreneurs grew from 2023, most obviously in year 1 and reducing in impact down to a more modest increase in year 3. It is possible that we see a greater impact from digital technology, a better understanding of scaling internet enabled companies, allowing for much more rapid growth of revenue in the earlier days of a company.

While India led amongst small class companies by a large margin in 2019, it is scaled back into a less precarious feeling second place in 2023, where it remains today. Another change since the original publication in 2019, which continued since 2023, is in the relationship between Europe and the United States. Previously, the two were remarkably close across all three years, with Europe maintaining a marginal lead. In recent updates, we’ve seen US startups extending a significant lead in year 1 (1840% vs 1038%), which diminishes up until Europe again leads in year 3 (154% vs 175%).

For the large class companies, the most striking difference might be the acceleration of the projected growth of Indian companies in year 3, now at 128%. It isn’t clear what might have caused this, nor why their year 1 growth might have increased from  – aside from the overall optimism at that stage.

About The Data

The data used in this article comes from the Equidam database. Equidam is the pioneer in online automated valuation for startups and private companies. As part of its activity, Equidam collects financial projection data from users, that can never be shared unless aggregated, and uses it to accomplish its mission of increasing valuation objectivity and accessibility.

The dataset surveys more than 25,000 companies in 90 countries, spanning from very early stage and pre-revenues startups to VC backed or more traditional companies.

Editor’s note: This post was originally published in November 2016 and has been updated with latest data for accuracy in April 2025.