🇸🇪 is #2 global 🦄 factory on a GDP basis, but more importantly also #2 on a $ invested basis
Adding the capital efficiency perspective to the story
Last week, the diagram in the embedded post below flooded all my feeds after being shared by the most vocal advocates for the Swedish startup ecosystem. The Dealroom diagram shows that Sweden is #2 globally in unicorn production on a GDP basis, after Israel. That's impressive! It's obvious to everyone that the Swedish startup ecosystem is now firing on all cylinders. Yet, I asked myself: "Is the GDP lens the most relevant or interesting perspective on this?" As a VC, it's more interesting to consider ROI.
Could the countries and outcomes in the diagram be reframed based on VC $'s invested as a proxy for ROI and capital efficiency? With a little help from my friends (🙏 Gemini and Claude), I did the analysis using the total venture capital $ invested over a 10-year period (2016-2025). See the result below.
Guess what, Sweden is still #2! That’s impressive and important! Some perspectives:
Sweden has produced 1.8 🦄 per $1B venture capital invested (over 10 years) -> a strong indicator of ROI and capital efficiency! 💪 Remember unicorns have valuations >= $1B, and there is also >0 value in non-unicorn startups, while some capital invested will be from outside the 10 years or non-VC sources -> this is not a 1:1 accurate ROI estimate.
Switzerland shoots up the rankings and is #1! 🚀 The Swiss turn out to be not only precise but also efficient.
Israel drops from #1 to last! 😳 That’s surprising to say the least.
Sweden is simply a high-performing unicorn factory on an absolute, GDP, ROI, efficiency and attractiveness basis. It’s also an attractive place to invest. Fwiw is also why Alliance VC set up in Stockholm a few years back. Let the flywheel do its job. It’s an inspiration to all the Nordic neighbors.
Some words of caution:
While I expect this analysis to be directionally correct and fairly correct on a relative basis, I know that the numbers are not accurate in the absolute sense or precise.
Venture capital investing numbers are notoriously inaccurate and vary wildly from source to source. Furthermore, it’s very difficult to allocate capital correctly on a geographic basis as companies expand globally, and to some extent, the lines get blurred. This is a bigger issue in small markets like Israel, Sweden, and Norway, with companies reincorporating as US Inc.
The Dealroom diagram appears to overestimate the number of unicorns in each market and on aggregate. However, it appears to be less of an issue for Sweden than for other markets. The conclusion appears correct at least on a relative basis.
Feel free to check out the data: