The Dutch startup/scaleups ecosystem is in a great position, according to the Quarterly Startup Report.
Dutch startups and scale-ups have raised €1.5B in venture capital in Q3 2021, bringing the total for the first three quarters to €4.5B. Foreign investment has also increased sharply in proportion, but Dutch investments lagged far behind, says the report.
The Quarterly Startup Report was published in collaboration with Dealroom.co, Golden Egg Check, KMPG, the Regional Development Companies (ROMs), Dutch Association of Private Equity Companies (NVP), Dutch Startup Association (DSA), and Techleap.nl.
Raised €1.5B in Q3
According to the report, total growth capital raised for startups in Q3 was lower than in the previous quarter, due to several mega-deals in that record quarter.
Around €2.48B had been invested in 68 Dutch startups and scaleups in Q2, 2021. The investment secured in Q2 was tenfold higher than Q2, 2020 (€0.25B) and Q2, 2019 (€0.22B).
There is a clear increase in the financing of these innovative companies this year compared to previous years.
Compared to the first three quarters of 2020, the increase is almost 200 per cent and stands at 270 per cent when compared to 2019.
Foreign investment increasing
Although more venture capital is available from the Netherlands, the increase in investment to €1.1B in the first three quarters of 2021 from €690M in 2019 seems to be mainly due to foreign investments.
The share of total investments in Dutch startups by foreign funds has increased from 10 per cent to 55 per cent since 2019.
On the other hand, the share of total investments by Dutch funds in Dutch startups declined from 62 per cent in 2019 to 19 per cent in 2021.
The findings also reveal continuous growth in financing of startups in the later phases.
The past quarter saw many large investment rounds from Picnic (€600M), Sendcloud ($177M), and VanMoof ($128M), among others.
One concern, however, is the trend for VC funds to withdraw from investments up to €1M. Since 2018, their share of early-stage investment has halved, concludes the report.
“We can safely conclude that Dutch startups and scaleups are now internationally recognised as attractive investments. It’s just a shame that Dutch investments are still lagging behind,” says Lucien Burm, chairman of the Dutch Startup Association.
“Investors are working hard to catch up given the number of new funds this year and their size, but more is needed to make this sufficiently competitive,” he says
“Maurice van Tilburg, Managing Director of Techleap.nl adds, “We have to sustain the growth and be internationally competitive in a few years’ time. However, the declining investment trend at the bottom of the market may prove worrisome. It is important for the Dutch economy of tomorrow that startups that are at the beginning of their growth are helped, in which Dutch investors also have an important role to play.”