The Quarterly Startup Report for Q1 2023 is out!
This quarter, Dutch startups raised more than €420M in venture capital, reveals the quarterly data analysis.
The Quarterly Startup report is published in partnership with Dealroom.co, Golden Egg Check, KPMG, the Regional Development Companies (ROMs), Dutch Association of Participation Companies (NVP), Dutch Startup Association (dSa), and Techleap.nl.
Here are key insights from the report.
Raised €420M in VC
In Q1 2023, Dutch startups raised more than €420M in venture capital.
While this represents a decrease from the previous quarter’s investments, which totaled nearly €600M, it is consistent with the trend observed over the past year of increased early-stage investment, reveals the report.
Climate tech and sustainability take the cake
The report says that the investors find climate tech and sustainability sectors particularly appealing, with 27 per cent of the capital invested in the past quarter directed towards these industries.
Examples of such companies include Fairphone (which produces circular electronics), BYBORRE (sustainable textiles), Source.ag (AI-powered indoor farms), and Triple Solar (which specialises in heat pumps and solar panels).
These companies were able to raise a combined total of €115M.
“We still see challenges for startups in the later phase. The startup ecosystem seems resilient for the time being,” says Lucien Burm, chairman of the Dutch Startup Association.
“We expect investment activity to pick up again in the year and the available ‘dry-powder’ to be used somewhat more against more balanced valuations for growth,” Burm continues.
“A positive development is that it is a good time to start a startup. The current circumstances provide many opportunities for innovations and early-phase investments are structurally growing,” adds Burm.
Top deals in Q1 2023 included Creative Fabrica, Fairphone, EFFECT Photonics, Xeltis, Source.ag, BYBORRE, SafeSize, Vitestro, and NextKidney.
Number of deals is increasing
Total investments in Q1 2023 were just over half of the €811M in the same quarter of 2022, while the number of deals has increased to 107 deals in Q1 versus 88 in Q4 2022.
This is mainly due to the number of early-stage investments, shares the report.
It is still less than in the same period last year when 123 deals were closed, it adds.
The distribution in the number of deals versus deal size in the first quarter of this year is very similar to that of 2022, with slightly more deals between €1M and €4M and fewer deals above €15M.
“International and macroeconomic conditions, such as high-interest rates and uncertainty in the financial sector, are making VCs (and their investors) more cautious and hesitant and are still not fully up to speed with their initial investment pace,” says Maurice van Tilburg, Managing Directorof Techleap.nl.
“At the same time, there are many opportunities for investors due to the greater choice and lower valuations. This year will be a crucial year; we expect startups that raised capital earlier, in 2021 or 2022, to enter the market for another round later this year as they are not yet profitable. The question is whether investors will go along with this or not,” he adds.
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