Although the number of Corporate Venture Capital funds investing in the Netherlands has doubled over the past 5 years, the share of scaleup investments by corporates in The Netherlands is lower than in the rest of Europe, the US and Asia. There is also less investment per deal. As a result, the Netherlands is missing the opportunity to be future-proof and to build the companies of the future.
This is evident from the report The next chapter for Corporate Venture Capital in the Netherlands by Deloitte and StartupDelta. The report was launched recently in the presence of Special Envoy of StartupDelta, Constantijn van Oranje.
The Dutch startup ecosystem has become a lot more mature in the past 5 years, with more incubators, accelerators and government support. There has also been strong growth in the Dutch Corporate Venture Capital fund investments.
Focus of investments is on early stage startups
These funds focus mainly on early-stage startups. For example, more than 80% of the Dutch Corporate Venture Capital funds surveyed indicate that they invest in this group. In addition, compared to the United Kingdom, Scandinavia, Germany and Israel, Corporate Venture Capital funds participate significantly less in late-stage funding rounds of Dutch startups. As a result, in 2018 the median transaction size in Dutch startups by Corporate Venture Capital funds, at 4.7 million euros, was also significantly lower than the European median of 11.8 million euros.
European trend more towards scale-ups
In 2018, a total of $5.5 billion was invested in European start-ups through 468 Corporate Venture Capital deals, an increase of 72% compared to 2017. The number of investments in late-stage scale-ups in Europe increased by 20 percent, while the number of transactions in early-stage startups decreased by 19.1%.
Nils Beers, director of StartupDelta, considers it a missed opportunity that so few Dutch corporates invest in scale-ups. “It is precisely these scale-ups that are needed to keep the Netherlands competitive in the future. Corporate Venture Capital plays a major role in scaling up startup companies to scaleups. It is not only an effective way for young companies to attract venture capital but also offers an opportunity for corporates to enter into innovative business partnerships.”
The researchers, therefore, argue that Dutch companies should step up their Corporate Venture Capital initiatives. Daan Witteveen, partner Deloitte Disruptive M&A: “Many Dutch companies currently see their Corporate Venture funds as an innovation tool, but they should make these activities part of their core corporate strategy so that the investment can make a direct contribution to the transformation of the company.
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