Top Dutch Startup Investors: Trends & 2020 Opportunities

The Dutch startup environment is experiencing significant growth, with over $85 million in investment directed towards regional startups in 2019 alone. Amsterdam’s strategic location, neighboring the U.K., Belgium, France, and Germany, positions it as a key access point to these important markets. Recognizing this advantage, the Netherlands developed Schiphol Airport into one of the world’s busiest, currently ranked twelfth globally. In fact, Amsterdam’s logistical and social connectivity is considered the best worldwide, according to DHL’s Global Connectedness Index.

A robust startup ecosystem in Amsterdam is fueled by substantial funding opportunities, a highly qualified workforce, and a thriving entrepreneurial spirit. The implications of Brexit are also contributing to this growth, as the Netherlands offers a welcoming environment for U.K.-based tech founders, with widespread English proficiency and legal frameworks similar to those in the U.K.

Despite the challenges presented by the COVID-19 pandemic in 2020, venture capital investment in startups continued. A study conducted by KPMG and NL Times revealed that startups secured $591.2 million in funding during the third quarter, more than double the $252.4 million raised in the previous quarter.

Understandably, companies demonstrating adaptability to the pandemic received a larger share of investment this year. KPMG’s analysis of the last six months indicated an increase in the total investment amount, but a decrease in the overall number of deals. This trend suggests a potential for consolidation within startup sectors, with fewer investments being directed towards new ventures, a pattern KPMG anticipates will continue.

According to a report from Dealroom.co and StartupAmsterdam, Amsterdam is home to 1,661 tech companies. The city also improved its standing in Startup Genome’s 2019 “Global Startup Ecosystem Report,” climbing four positions since 2017 to reach fifteenth place. The typical seed funding round is $500,000, exceeding the global average of $494,000, while a median Series A round amounts to $2.4 million. Software engineers in Amsterdam earn an average salary of approximately €54,000.

Amsterdam provides a variety of resources for the tech industry, including educational programs at institutions like Growth Tribe, The Talent Institute, and THNK, as well as acceleration programs offered by Rockstart, Startupbootcamp, and Fashion for Good. Numerous co-working spaces, such as TQ, Startup Village, and B.Amsterdam, are available, and the city’s bike-friendly infrastructure allows for quick and easy commutes.

Although taxes are relatively high, Amsterdam avoids the extreme income disparity often found in cities like San Francisco and New York. Wealthy individuals in Amsterdam commonly utilize public transportation rather than private vehicles.

In response to COVID-19, the Dutch government implemented support measures, including tax deferrals, temporary employment support schemes, and other assistance programs. The government also launched TechLeap.NL, a national initiative designed to increase the visibility of the Dutch ecosystem to international investors. StartupDelta, a Dutch startup advocacy organization, actively engages with policymakers to promote the interests of the startup community.

The Netherlands boasts several prominent unicorn companies, including Booking.com, Adyen, Virtuagym, MessageBird, Swapfiets, Backbase, Picnic, and Takeaway, among others.

Adyen, founded in 2006, achieved a valuation of €7 billion during its initial public offering (IPO) in June 2018, marking one of Europe’s largest tech IPOs. Booking.com, established in 1996, was acquired by Priceline Group (now Booking Holdings) in 2005. Elastic, a provider of subscription-based data search software used by companies like Dell, Netflix, and The New York Times, also experienced a successful IPO in 2018.

For the purposes of this analysis, interviews were conducted with the following Amsterdam-based 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 enthusiastic about when considering investments, broadly speaking?
We are particularly interested in opportunities within the digital health sector, educational technology, and B2B SaaS businesses.

What is the most recent investment your firm has made that you find particularly promising?
Our latest and most exciting investment is in Wizenoze.

Are there specific types of startups you are hoping to encounter that are currently lacking in the industry? What currently underappreciated areas present potential?
We see a greater need for diverse founders than untapped opportunities.

What key characteristics are you seeking in potential investments?
Above all, we look for a truly exceptional team.

Which sectors appear overly crowded or present significant competitive challenges for new entrants? What kinds of products or services cause you concern?
We are cautious about investing in businesses related to delivery services, ride-sharing, and scooter rentals.

To what extent does your investment focus center on your local ecosystem versus other startup locations? Is it more than 50%? Less?
We focus less on our local ecosystem.

Which industries in your city and region appear best positioned for long-term success, or conversely, struggle? Which companies, whether in your portfolio or not, and which founders are you particularly impressed by?
The Netherlands appears well-suited for growth in both fintech and deep tech. I am very impressed by Tracy Chou and Diane Janknegt, both remarkable founders.

How should investors in other locations view the investment environment and potential within your city?
The environment is very encouraging. There is a significant amount of innovation, excellent infrastructure, and a strong talent pool.
Do you anticipate a rise in founders originating from areas outside of major cities in the coming years, as startup hubs potentially lose talent due to the pandemic and the increasing appeal of remote work?
Startups have always existed in these areas; investors simply haven’t consistently sought them out. I believe the current situation will change that.

Which of the industry segments you invest in appear most vulnerable or susceptible to changes in consumer and business behavior as a result of COVID-19? What opportunities might startups be able to capitalize on during this unique period?
None of our focus areas are negatively impacted. We concentrate on digital health, education, and SaaS, all of which are thriving in the current environment. Naturally, a broader economic downturn could affect overall spending.

How has COVID-19 influenced your investment approach? What are the primary concerns expressed by the founders within your portfolio? What guidance are you currently offering to those startups?
The pandemic has validated our existing strategy. Our data-driven evaluation of teams is particularly valuable when in-person meetings are limited.

Are you observing positive indicators – such as revenue growth, customer retention, or other positive momentum – within your portfolio companies as they adapt to the pandemic?
We invest at such an early stage that our companies are generally experiencing growth regardless of external factors.

Can you share a recent experience that has inspired optimism, whether professionally, personally, or a combination of both?
Recently, while explaining the concept of racism to my young son, his response – “Mummy, that is just really weird” – gave me hope that future generations may be more equitable.

Stefan van Duin, partner, Borski Fund

What investment trends currently generate the most enthusiasm for you?
We are particularly interested in ventures founded by women that leverage technology.

What is your firm’s most recent and compelling investment?
Our latest exciting investment is in Ziel.

What types of startups would you like to see more of in the industry, and what opportunities are currently being underestimated?
Ventures with female founders, generally speaking, are frequently overlooked.

What characteristics define your ideal next investment?
We would be pleased to make our next investment in either the agtech or edtech sector.

Which sectors are becoming overly competitive for new startups, or present significant challenges for entry? What products or services cause you concern?
The last-mile delivery space is currently quite saturated.

To what extent does your investment focus prioritize your local ecosystem versus other startup locations? Is it more than 50%, or less?
We allocate 75% of our investments to companies based in the Netherlands, and the remaining 25% to other European countries.

Which industries in your city and region appear best positioned for long-term success, or conversely, struggle? Which companies and founders are you particularly impressed by, regardless of portfolio affiliation?
We see strong potential in platforms, marketplaces, healthcare, and edtech.

What advice would you give to investors in other cities regarding the investment landscape and opportunities in your city?
Our city provides a favorable environment for startups, with extensive networks and a strong presence of venture capital firms.

Do you anticipate an increase in founders originating from areas outside major cities in the coming years, potentially driven by pandemic-related shifts and the rise of remote work?
This trend will likely create new investment opportunities.

Which of your investment areas appear most vulnerable to changes in consumer and business behavior due to COVID-19? What opportunities might startups capitalize on during this unprecedented period?
We expect to see a growing trend towards more on-demand and localized production, reducing reliance on countries like China.

How has COVID-19 altered your investment approach? What are the primary concerns expressed by the founders in your portfolio? What guidance are you currently offering to those startups?
We have prioritized our deal flow based on the potential long- and short-term impacts of COVID-19, which has influenced our focus.

Are you observing positive indicators – such as revenue growth, customer retention, or increased momentum – within your portfolio companies as they adapt to the pandemic?
We have recently completed our initial investments. Both companies are temporarily adjusting their strategies to secure short-term cash flow, while maintaining their long-term objectives.

What recent development has inspired optimism in you, whether professionally, personally, or a combination of both?
We are seeing new investment opportunities emerge in developing markets.

Nick Kalliagkopoulos, partner, Prime Ventures

What trends are you most excited about investing in, generally?
I am particularly enthusiastic about the concept of “unscaling,” as articulated by Hemant Taneja of General Catalyst. Emerging technologies, notably artificial intelligence, are reshaping traditional economic models, fostering new leadership based on agility and customized offerings. With a background in computer engineering, I am deeply interested in advanced technologies – especially AI and machine learning – and their broad application across various markets. I find the healthcare sector especially compelling, as advancements in computer science can drive significant progress in the life sciences.

What’s your latest, most exciting investment?
Our most recent exciting investment is in Blueground, a company that provides beautifully furnished apartments for monthly rentals in prime locations worldwide.

What are you looking for in your next investment, in general?
We are actively seeking companies and products that are heavily reliant on data, and those that can establish a substantial competitive edge through 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?
The field of general-purpose AI is becoming increasingly competitive, largely due to the involvement of major technology corporations, and will likely remain so.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
As a Pan-European fund, our investment strategy encompasses opportunities throughout 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?
Across the European landscape, I am very encouraged by the potential of smaller cities with access to skilled engineering talent, which often receive less attention from investors. While London is undoubtedly the leading tech hub in Europe, exceptional companies can be established in other locations as well. We have made successful investments in companies based in Amsterdam, Budapest, Athens, and Madrid.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Amsterdam is a highly international, innovative, and entrepreneurial city that should be a key consideration for any technology 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 believe this trend began prior to the pandemic and is expected to continue gaining momentum.

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 pre-existing, long-term trends driven by technology. The digitization of healthcare and education – sectors traditionally reliant on in-person interaction – presents significant 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?
My advice to founders is to maintain a robust balance sheet, demonstrate agility and flexibility, and remain alert for emerging opportunities.

Bas Godska, founder, Acrobator Ventures

What is your most recent and compelling investment?
We’ve recently invested in Miro.com, studyfree.org, respeecher.com, and letsenhance.io.

What currently undervalued areas present promising possibilities?
We believe there’s significant potential in developing a more effective matchmaking platform and a standardized fundraising profile to assist (early-stage) startups in connecting with investors.

What qualities do you prioritize when considering a new investment?
We are particularly interested in exceptional founders originating from the CIS/Benelux region who have ambitions for global expansion.

In what sectors is it becoming increasingly difficult for new startups to gain traction, or which types of products/services cause you concern?
The adtech space is challenging due to the dominance of large corporations. We are also cautious about apps for food ordering within the HoReCa industry, applications attempting to measure clothing size without physical try-on, and conventional e-commerce ventures.

To what extent does your investment focus lie within your local ecosystem versus other startup centers? Is it more or less than 50%?
Less than 50% of our investments are focused locally. Our primary focus, alongside Benelux, is on the CIS region.

Which industries in your city and region appear poised for long-term success, and which do not? Are there any companies, within or outside your portfolio, and founders that particularly excite you?
We are optimistic about the future of AI, ML, deep tech, and marketplace models.

What advice would you give to investors in other cities who are considering the investment landscape and opportunities in your city?
We recommend partnering with a trustworthy local VC to capitalize on arbitrage opportunities between East and West, and to facilitate thorough cross-border due diligence.

Do you anticipate an increase in founders emerging from areas outside of major cities in the coming years, potentially driven by the pandemic, remote work trends, and concerns about major hub viability?
Yes, we project an increase of approximately 25%.

Which of the industry segments you invest in appear most vulnerable or susceptible to changes in consumer and business behavior as a result of COVID-19? What opportunities might startups be able to leverage during this unprecedented period?
Our travel-related portfolio has been impacted. However, we see opportunities in digital transformation and productivity tools/the future of work.

How has COVID-19 altered your investment approach? What are the primary concerns expressed by the founders in your portfolio? What guidance are you currently offering to startups in your portfolio?
The pandemic initially affected our fundraising efforts, but our new fund has experienced a roughly 200% increase in portfolio sales since COVID began, and Miro.com, from fund I, is experiencing substantial growth.

Are you observing positive indicators, such as revenue growth, improved retention rates, or other positive momentum, within your portfolio as companies adapt to the pandemic?
We are seeing a decrease in customer acquisition costs (CAC).

Can you share a recent experience that has inspired optimism, whether professionally, personally, or a combination of both?
I’ve achieved a better work-life balance, and the founders within our portfolio have demonstrated increased resilience and resourcefulness.

Is there anything else you would like to share with TechCrunch readers?
Early-stage investments led by angel investors and operator-led emerging funds are demonstrating superior performance, with higher internal rates of return (IRR).

Renaat Berckmoes, partner, Fortino

What trends are you most excited about investing in, generally?
We are particularly enthusiastic about several developing areas, but our primary focus within the B2B SaaS landscape is the increasing prevalence of extensive, cloud-based automation. The willingness of businesses to integrate new cloud tools has significantly accelerated due to the current circumstances and the prolonged pandemic. Furthermore, we firmly anticipate that cloud-based software solutions will increasingly be implemented within manufacturing and continuous processing sectors.

What’s your latest, most exciting investment?
We are very pleased with our recent investment in Oqton, a company with the potential to fundamentally change manufacturing by eliminating isolated systems and unifying the production process from initial design through to quality assurance. Genuine Industry 4.0 progress in manufacturing requires interconnected components that function and communicate as a cohesive unit, and Oqton exemplifies our dedication to cloud-based automation across diverse industries.

What are you looking for in your next investment, in general?
Generally, as an investor concentrating on early-stage ventures, we prioritize exceptional founding and management teams, alongside companies demonstrating the capacity for rapid international expansion.

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 in highly competitive markets, innovative startups can emerge by delivering a substantial improvement in user experience, as demonstrated by companies like Superhuman and its approach to 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 primary emphasis is on supporting the Benelux ecosystem, which we serve through our offices located in both 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?
Generally, B2B and B2C SaaS businesses are favorably positioned for sustained growth. Teamleader has become the leading CRM and workflow management platform for SMEs throughout the Benelux region. Furthermore, under the inspiring direction of Robin van Lieshout, InSided is establishing itself as the go-to self-service customer success and engagement platform for B2B software companies in the U.S. and Europe.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Amsterdam possesses a significant advantage in attracting talent from around the globe. This is attributable to the city’s appeal, as well as substantial tax benefits offered to expatriates. Consequently, startups can maintain lower costs while simultaneously attracting and compensating highly skilled professionals from across the world.

We are observing a trend towards more teams operating on a remote-first basis, particularly in the initial stages. However, startup hubs and university networks will continue to be vital for consolidating resources for the startup community and providing a venue for networking with like-minded individuals.

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?
Within the B2B sector, the shift to remote work is creating a greater demand for business applications that offer the same intuitive and user-friendly experience as B2C applications. The distinction between these types of applications is becoming increasingly 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?
COVID-19 has not altered our investment strategy; rather, it has reinforced our existing approach.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
The impact of COVID-19 on our portfolio companies has been varied thus far. Companies offering alternatives to traditional brick-and-mortar models have experienced significant growth, while those reliant on lengthy and intensive on-site implementation processes have faced 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 accelerating adoption of SaaS solutions in general is providing numerous opportunities for increased growth for many of our portfolio companies.