UK outperforms US in creating unicorns from early stage VC investment
21 comments
·November 6, 2025fourseventy
According to the article in the past decade the UK produced 57 unicorns, and the US produced 762. I wouldn't really call that outperforming.
daanbread
They pretty clearly state their metric for performance is "unicorns per $1bn" (3.08 vs 1.22).
They're suggesting dollars invested in UK startups are more likely to create a unicorn than those same dollars put into us startups, hence higher performance.
cjbgkagh
Quite typically the highest return investments are picked first; as such there is a diseconomy of scale, it should be of no surprise that the ROI decreases as investment scales. Perhaps instead of thinking of it as a sign of efficiency it should be thought of as an underdeveloped market with the UK foolishly leaving money on the table.
hshdhdhehd
Also it is not measuring average returns per $ but returns split by company then a vector operation of ceiling (1bn) divided by my 1bn then aggregated.
conductr
If they are able to scale at that ratio it will be noteworthy. It is quite unlikely though.
idle_zealot
Well, yeah. Presumably the way they achieve a good ratio is by being more discerning with their investments. If you try to scale that you get the US's numbers as you throw money at anyone with a pitch deck.
jimnotgym
Presumably because VCs in the UK are so much more risk averse? They only invest in 'sure things', potentially missing out on other opportunities.
FloorEgg
I know nothing about UK investment culture, but I have been building startups for 15 years, volunteered for multiple accelerators, made angel investments and rubbed shoulders with many US VCs.
My impression of the US VC industry, especially near the end of the zirp era and even more especially during covid, the amount of VC capital being deployed far surpassed the number of competent VCs or startup founders.
Many VCs were making decisions based on factors that were NOT correlated with future venture success. Many VCs in fact probably biased companies away from future success, because they didn't understand what they were doing and their instincts from prior industries or investment regimes were directly the opposite of what was needed for an early stage startup.
In other words, there is risk aversion, and there is foolishness. I know for a fact there was a lot of foolishness going on in us VC investing (I even participated in some of it, learned from it, and I know better now).
I'm not just talking about VCs throwing money at anyone with a pitch deck. I'm talking about VCs having a backwards understanding of what makes startups successful and actively pressuring startups that could have worked into doing the wrong things.
There is a core of US VCs that are the world leaders in what they do, exceptionally aware of what makes startups successful and have the track record to prove it - this minority is overwhelming responsible for the industry's ROI. There is also a massive graveyard of fools who tried to replicate that success and failed for a variety of reasons.
nailer
Also if the UK investor says "we'd love to invest, can do the whole round, want you to send us your current cap table, we need to get the deal done before April because we have capital to deploy before end of the current financial year" don't actually expect the funds.
wakawaka28
That might be a case of selection bias. The only reason to put up with UK regulations and other issues is if you have a compelling reason to do so (compared to similar opportunities).
impossiblefork
Yes. If the UK matched the US per capita it'd be ~285 unicorns, so it's actually performing at 37%.
kazinator
But a per capita figure is diluted by how big of a tech sector that country/region has relative to the rest of its economy. The more people work outside of that sector, the lower is any per-capita figure from tech. Fewer lines of code written per capita, fewer bugs per capita, ...
The figure per invested dollar is much better: how many unicorns emerge per billion of investment money.
Those who chase unicorns are mainly investors (plus people who want to join startups that become unicorns). That figure is directly relevant to them.
physicsguy
The tech sector in the UK is pretty big but also massively finance weighted. And salaries a lot lower than the US so a $ investment goes further. At my company a few years ago our one developer in Boulder earnt more than our head of software in the U.K.
tjwebbnorfolk
UK is desperate to have something going for it right now. Just let them have this one.
BrenBarn
I don't really see this as a positive thing.
0xy
Satire?
anon291
The main difference between the US and the UK is that American startups are building platforms for the world, whereas UK ones often consume those platforms. The platform holder holds the strategic keys. The efficiency of the market system is irrelevant to simple dominance. This is the same issue with other startup hubs, like Singapore, Bangalore, etc.
MadDemon
Do you have something to back up this claim?
2 british blokes in a shed doing what an entire team of corporate engineers cant is an incredibly strong part of British culture. They strive to be scrappy. They dont like making a show of things. They dont like to ask for more.
Essentially they draw a hell of a lot of national pride from this 'doing more with less' attribute. It came about out of necessity during ww2.
Is it really surprising that this culture produces companies that manage to do more with less? No.
Germany has a strong safety and reliable robust engineering culture of ensuring things are always done perfectly to spec. Is it surprising their companies have a reputation for making reliable machines? No.
Does British scrappiness and pride in their modesty mean they're somehow better than other cultures that prefer to go all out about things? No.
Sometimes you just cannot do something with 2 brits in a shed taking pride in their modesty and NEED that american exceptionalism and balls to the wall with everything attitude to get things done.
Thats one reason that i believe america produces more unicorns at a faster rate relative to population than the UK, Americans believe in themselves harder and go big or go home more often with less reservations.
As an investor it shouldn't make you consider the UK any less risky, as Brits may go modest and go home just as often as any American company can goes big then home.