The Netherlands’ ecosystem has been flourishing; more than $85 million was invested in regional startups in 2019 alone. The nation’s proximity to the U.K., Belgium, France and Germany makes Amsterdam a natural gateway to those markets. Long ago the savvy Dutch realized this, and built up Schiphol to become the world’s twelfth-busiest airport. Indeed, Amsterdam’s logistical and social connectedness is ranked number one in DHL’s Global Connectedness Index.
Plenty of good funding rounds, a highly skilled workforce and a strong entrepreneurial culture have given Amsterdam a booming startup ecosystem. And Brexit is helping: The Dutch are highly proficient in English and Dutch law is similar to English law, which means U.K.-based tech founders are welcomed with open arms.
In 2020, the venture industry continued to invest in startups, despite the COVID-19 crisis. According to a study by KPMG and and NL Times, startups raised $591.2 million in the third quarter, more than double the $252.4 million raised in the quarter before.
For obvious reasons, this year has seen more cash go into companies that were able to adapt to the pandemic. KPMG found that while the total amount of investment increased in the past six months, the number of overall investments decreased. New startups pulled in fewer investments, KPMG sees this trend continuing and likely leading to consolidation amongst startups in similar sectors.
According to a report by Dealroom.co and StartupAmsterdam, there are 1,661 tech companies in Amsterdam, while the city ranked fifteenth in Startup Genome’s 2019 report “Global Startup Ecosystem Report,” moving up four places since 2017. The median seed round is $500,000 (above the global average of $494,000) and a median Series A round for a startup is $2.4 million. The average salary for a software engineer is around €54,000.
Amsterdam has tech industry “schools” such as Growth Tribe, The Talent Institute and THNK for educational courses, as well as accelerators like Rockstart, Startupbootcamp and Fashion for Good. Co-working is well-catered for with TQ, Startup Village and B.Amsterdam, and workers can cycle everywhere in minutes.
While taxes are high, entrepreneurs won’t find the staggering income inequality so often seen in cities like San Francisco and New York. In Amsterdam, rich people take public transport, not private buses.
During COVID-19, the Dutch government has also announced support packages such as tax deferrals, temporary employment bridging schemes and other initiatives. It also launched a national program, TechLeap.NL, to boost the ecosystem with more international investor visibility. StartupDelta, a Dutch startup lobby group, keeps the pressure on the politicians.
The Netherlands’ most famous unicorns include Booking.com, Adyen, Virtuagym, MessageBird, Swapfiets, Backbase, Picnic and Takeaway, among several others.
Adyen launched in 2006, and in June 2018, it was listed as one of Europe’s largest tech IPOs with a value of €7 billion. Booking.com started in 1996 and was later acquired by Priceline Group (now called Booking Holdings) in 2005. Elastic, the provider of subscription-based data search software used by Dell, Netflix, The New York Times and others, was another gangbuster IPO in 2018.
For this survey, we interviewed the following Amsterdam-focused investors:
• Janneke Niessen, partner, CapitalT VC
• Stefan van Duin, partner, Borski Fund
• Nick Kalliagkopoulos, partner, Prime Ventures
• Bas Godska, founder, Acrobator Ventures
• Renaat Berckmoes, partner, Fortino
Janneke Niessen, partner, CapitalT VC
What trends are you most excited about investing in, generally?
Digital health, education, B2B SaaS.
What’s your latest, most exciting investment?
Wizenoze.
Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
More overlooked founders than opportunities.
What are you looking for in your next investment, in general?
A great team.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Delivery, taxis, scooters.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Less.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
NL seems well-positioned for fintech, deep tech. I am really excited about Tracy Chou and Diane Janknegt, two incredible founders.
How should investors in other cities think about the overall investment climate and opportunities in your city?
Very positive. Lots of innovation, great infrastructure, good talent.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I think startups have always been there, investors just don’t tend to look at them. I think the opportunity is more that they now will.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
None. We look at digital health, education and SaaS and they all thrive in this climate. Of course an economic crisis will have an impact on spending in general.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
It has confirmed our approach. We have a data-driven approach to teams, which is great when people cannot meet.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
We invest so early that companies are growing regardless.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
When I explained to my little boy what racism is and he answered: Mummy that is just really weird. That gives me hope that the generations after us might do better.
Stefan van Duin, partner, Borski Fund
What trends are you most excited about investing in, generally?
Female-founded ventures who are technology enabled.
What’s your latest, most exciting investment?
Ziel.
Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Female-founded ventures in general are overlooked.
What are you looking for in your next investment, in general?
It would be nice to make the next investment in the sector of agtech or edtech.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Last-mile delivery is very crowded at the moment.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
75% in the Netherlands, 25% in other European countries.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Platforms, marketplaces, healthcare, edtech.
How should investors in other cities think about the overall investment climate and opportunities in your city?
Great environment for startups, lots of networks and multiple VCs.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
It will bring new opportunities.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
More on-demand and local production will be a trend for the coming years; to not be dependent on countries like China.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
We have ranked our deal flow list with the long- and short-term effects of COVID, which shifted focus.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
We just made our first investments. Both companies are temporary shifting the focus to retrieve short-term cashflow, but with the big goal in mind.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
New opportunities for investments in upcoming markets.
Nick Kalliagkopoulos, partner, Prime Ventures
What trends are you most excited about investing in, generally?
The trend I am most excited about investing in is unscaling (as defined by Hemant Taneja of General Calatlyst). New technologies, mainly AI are changing traditional economies, creating new leaders where their competitive advantage lies on smaller size and personalized products. Being a computer engineer by training, I am fascinated by deeper technologies (especially AI/ML) and its application in numerous markets. The industries that I find the most exciting are healthcare (leverage developments in computer science to create further advancements in life sciences).
What’s your latest, most exciting investment?
Blueground, providing fully furnished, beautiful apartments for monthly stays in the best locations around the world.
What are you looking for in your next investment, in general?
Data-intensive companies and products, companies that can gain significant advantage by leveraging data network effects.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Horizontal AI is an area that is and will keep on being very competitive from the large tech companies.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We are a Pan-European fund, so we are investing all over Europe.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Looking at the whole European ecosystem, I am very excited about the smaller cities that have access to great engineering talent and are sometimes overlooked by investors. London is by far the capital of tech in Europe, but great companies can be built in other cities as well. We have invested in great companies in Amsterdam, Budapest, Athens, Madrid.
How should investors in other cities think about the overall investment climate and opportunities in your city?
Amsterdam is a very international, innovative and entrepreneurial city that should definitely be on the radar of every tech investor.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I think this is a trend that had started way before the pandemic and will keep on growing.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
COVID-19 is accelerating several of the long-term trends that technology was bringing. Digitizing healthcare and education (both markets that were used to physical presence) offer large opportunities.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Advice to founders: Have a strong balance sheet, be agile and flexible, keep eyes open for opportunities.
Bas Godska, founder, Acrobator Ventures
What’s your latest, most exciting investment?
Miro.com, studyfree.org, respeecher.com, letsenhance.io.
What are some overlooked opportunities right now?
Better matchmaking platform and universal fundraising profile to help (early-stage) startups find investors.
What are you looking for in your next investment, in general?
CIS/Benelux-originating extraordinary founders aiming to go global.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Adtech is tough because of the giants’ ability to dominate the sector; HoReCa apps to order food; measuring of clothes size app without putting on the clothes; some classical e-commerce projects.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Less than 50%. We mainly aim on CIS next to Benelux.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
AI, ML, deep tech, marketplaces.
How should investors in other cities think about the overall investment climate and opportunities in your city?
Seek local reliable VC partner for great arbitrage East-West, cross-border due diligence.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes, by ~25%.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Travel (portfolio). Digital transformation, productivity tools/future of work.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
It has affected our fundraising but the new fund’s portfolio sales level is up by ~200% since COVID, and fund I’s miro.com is skyrocketing.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
CAC dropping.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
I found better balance in work-life and founders in the portfolio became stronger and even more resourceful.
Any other thoughts you want to share with TechCrunch readers?
Angels and operator-led emerging funds are showing much better results in early stage; higher IRR!
Renaat Berckmoes, partner, Fortino
What trends are you most excited about investing in, generally?
We are excited about multiple subtrends, but our overarching excitement for the B2B SaaS world is the rise of large-scale cloud-based automation. The openness of corporates to adopting new cloud-based tools has leapfrogged several years as a result of the new reality we are facing during this long, stretched pandemic. Moreover we are strong believers that cloud-based software applications will start to make their way into manufacturing and continuous processing industries.
What’s your latest, most exciting investment?
We are very excited about our recent investment in Oqton, a potential disrupter of the status quo in manufacturing by breaking down silos and integrating the production process from design all the way to quality control. There is no true industry 4.0 innovation to the overall manufacturing process as long as the different components are not connected and act/communicate as standalone piece. Oqton is an example of our commitment to cloud-based automation across sectors and verticals.
What are you looking for in your next investment, in general?
In general, as an early-stage investor, we are looking for great founding/management teams and immediately internationally scaling companies.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Even oversaturated markets can bring about great new startups that, for example, bring about a significant shift in user experience, e.g., think of Superhuman and email.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Our main focus is on nurturing the Benelux ecosystem, which we serve with both offices in Amsterdam and Antwerp.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
In general B2B and B2C SaaS companies are well-positioned to thrive. Teamleader has developed into the SME Benelux CRM and workflow management platform. Under the inspiring leadership of Robin van Lieshout, InSided is emerging as the reference self-service customer success and customer engagement platform for U.S. and EU B2B software companies.
How should investors in other cities think about the overall investment climate and opportunities in your city?
Amsterdam has a huge strength in attracting talent from all around the world. This is partly because of the city’s charm but also because of very significant tax advantages for expats hired from abroad. As a result, startups are able to keep the cost low whilst being able to attract and compensate top talent from all across the globe.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
We do see a trend of more remote-first teams in the very early stages, however startup hubs and university clusters will still play a significant role of pooling all kinds of resources for the startup community and being a place to meet like-minded people.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
B2B, people taking their work home will now feel an even stronger urge to have the same strong UX/UI at home with their business apps as they have with their B2C applications. The lines are getting blurred.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Did not change our investment strategy, rather reinforced it.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
So far the COVID impact on our portfolio companies has been mixed. The offerings that are competing with brick-and-mortar models have been surging whilst companies that rely on long and intensive (on site) implementation tracks have been suffering from delays.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
The accelerated adoption of SaaS solutions in general is giving a lot of our portfolio companies ample opportunity to an increased growth pace.