The Dutch startup scene has been buzzing with activity as demonstrated by the recently published Quarterly Startup Report.
Released by Dealroom.co, Golden Egg Check, KPMG, the Regional Development Agencies (ROMs), Dutch Startup Association (DSA), and Techleap.nl, this report provides a comprehensive analysis of the funding landscape for Dutch startups in the second quarter of 2023.
Here are the key takeaways:
A positive upward trend
The report reveals a positive trend in startup investments with Dutch startups raising approximately €525M in venture capital in the second quarter of 2023.
This marks an increase compared to the first quarter of the year (€420M) and a decrease compared to the second quarter of 2022 (€710M).
While the number of deals remains relatively stable compared to the previous quarter (108 deals in total, compared to 107 in the first quarter of 2023), the increase in investment signifies growing confidence in the Dutch startup ecosystem.
Prominent sectors: Biotech, fintech, and cleantech
Biotech takes centre stage in the second quarter of 2023, with Tagworks securing the largest investment of nearly €60M. Another notable biotech company, VarmX, also made it to the top ten.
The top three are complemented by fintech companies Factris and Fourthline.
Additionally, the cleantech sector, represented by companies like E-magy, HeatTransformers, and Pryme, emerged prominently in the top 10 deals of the second quarter, accounting for a combined total of €33M.
AI-related investments accounted for 10 per cent of the deals and 15-20 per cent of the total investment amount.
Fintech in the Dutch startup ecosystem
The Netherlands has become a fertile breeding ground for fintech startups.
Recently, six fintech CEOs called for more favourable conditions to maintain the Dutch ecosystem’s attractiveness.
The fintech sector plays a crucial role in making financial services more accessible and empowering consumers, thereby contributing to the transition towards a sustainable economy.
Maintaining the Dutch position therefore requires continued commitment to innovation, talent and cooperation, also from the government and regulators, adds the report.
Top Deals in Q2
The second quarter of 2023 witnessed several notable deals, with Tagworks securing the highest investment of €59.5M. Other significant deals are:
Axelera AI – $50M (including a €27M round announced in 2022)
Awaiting Major Financing Rounds in 2023
Despite the positive investment landscape, the first half of 2023 did not witness any major financing rounds exceeding €60M, reveals the report.
However, the coming months are expected to be crucial as many startups and scale-ups, which secured funding during the peak of the market in 2021, are anticipated to initiate new and potentially larger funding rounds later this year.
These rounds will support international expansion, production capacity, and capturing larger market share.
Lucien Burm, chairman of the Dutch Startup Association, says, “Investors seem to be taking a wait-and-see attitude for the time being. The question now is whether the market is recovering and whether we have passed the turning point. This will become apparent in the second half of the year. It will be especially exciting to invest in the growth phases. Despite the challenging economic conditions, the Dutch startup sector remains resilient and the Netherlands seems to be doing better than neighbouring countries, where investments continue to fall.”
Maurice van Tilburg, Managing Director of TechLeap, says, “Although we see positive signals in the market, we notice that it is especially difficult for scale-ups to get the right financing for the next phase in place in the current market conditions. A challenging time awaits these companies in which investors look more at net results, leading to possible cost savings, restructuring or strategic focus. But it is precisely these scale-ups that have the potential to make an enormous social and economic impact by scaling their product.”
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