The startup ecosystem is highly dynamic with frequent changes. Since multiple cities serve as startup hotspots around the globe, it can be difficult to understand what separates one from another. Startup Genome’s Global Startup Ecosystem 2020 report was released recently to better understand the ever-changing landscape of the startup ecosystem.
The report features a treasure trove of information on the changing landscape of startups due to COVID-19 and other factors. In addition, it also ranks the best startup ecosystems around the globe. In the list, Amsterdam has bagged the third rank in terms of European startup ecosystem in the list with an overall rank of 12.
Amsterdam’s startup ecosystem on a growing trajectory
Back in 2015, Amsterdam ranked 19th in the best startup ecosystem ranking. Since then, it climbed up to the 15th spot in 2019 and now it stands at 12th position globally and 3rd best startup ecosystem in Europe, after London and Stockholm. There are multiple key factors basis which the Startup Genome’s report ranks a startup ecosystem.
One of the key factors contributing to the tremendous improvement is Amsterdam’s ranking is Connectedness. Amsterdam gains from Netherlands’ logistical and social connectedness to the world, which was ranked number 1 in DHL’s Global Connectedness Index. Other factors such as good funding rounds, high knowledge and great talent also contribute to the betterment of Amsterdam’s bustling startup ecosystem.
“In the current crisis, the world is increasingly dependent on digital and technological solutions from startups and scaleups. In the Netherlands, we understand it is more important than ever to empower our leaders in tech to futureproof the world.” says Nils Beers, CEO at Teachleap.nl.
Lucrative opportunities in Amsterdam
Be it an investor looking to invest in startups or an entrepreneur who needs to establish base, Amsterdam has something for everyone. There are multiple reasons why one should set-up a base for their startup in Amsterdam. The Startup Genome report reveals that the median seed round for startups in the Amsterdam-Delta is $500,000 (€441,000 approx), which is above the global average of $494,000 or €435,000. Median series A round for startups stands at $2.4 million or €2.16 million and the average salary for a software engineer is around €54,000.
As per the Startup Genome report, the total early stage funding in Amsterdam is $960 million (€846.3 million approx) and the overall ecosystem value is $22 billion (€19.39 billion approx). The city ranks in the top 20 Global Ecosystem for Funding and Talent. On a scale of 10, Amsterdam has a Funding Growth Index of 4, Exit Growth Index of 9 and Investor Activity Index of 10.
While the numbers do say it all, Amsterdam welcomes international talent. Highly skilled immigrants can qualify for 30% tax reimbursement and international graduates get one year to find a job or start a business post graduation. Entrepreneur visas available as well and startups benefit from access to corporations across every sector. Headquarters of about 200 MNCs are based in Amsterdam.
In light of the recent COVID-19 scenario, the Dutch government also announced some support packages such as tax deferrals, temporary employment bridging schemes, and more.
Amsterdam based companies that made it big
Amsterdam is home to thousands of startups and it’s no surprise that many of them rise to new heights. The online payment processing firm Adyen is one such example. Launched in 2006, the startup went through multiple funding rounds to raise a notable amount. In June 2018, it was listed as one of Europe’s largest tech IPOs with a value of €7 billion. On the first day of trading, the company’s shares shot up 90 percent and the market value of the firm was well over €26.45 billion in June 2020.
Booking.com is another great example of how promising startups can set new benchmarks. The company was launched back in 1996 and was later acquired by Priceline Group (now called Booking Holdings) in 2005. The company set an example for the digital travel market since it recovered from financial position from a loss of €16.7 million in 2002 to €960 million in profit in 2011.
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