You've heard of Ericsson, Skype, and Spotify. But Stockholm has nurtured many other soon-to-be household names.

The Swedish capital is home to 134 of the fastest-growing private companies in Europe, according to the 2017 Inc. 5000 Europe. The third annual tally--which is based on private-companies' three-year revenue growth--finds that five of the top 10 companies hail from Stockholm. These include Daniel Wellington, a global watch manufacturer with sales of more than €155.8 million in 2015 ($169 million), and Star Stable Entertainment, a game developer that grew revenue by more than 3,000 percent between 2012 and 2015.

So what exactly is in Sweden's water, you might ask? Here are a few things that have helped Stockholm's entrepreneurial ecosystem thrive:

An educated work force

Analysts point out that all great startup hubs benefit from their surroundings. "The location provides resources for you as an entrepreneur," says Zeke Hernandez, an assistant professor of management at the University of Pennsylvania's Wharton school, where his research centers on entering global markets. In particular, he notes that Stockholm has some of the best "starting conditions" for entrepreneurs. "There was a big investment in human capital made by the Swedish government," he adds.

Read the full story at inc.com.