7 key takeaways about the Dutch tech startup ecosystem you need to know

The Dutch tech startup ecosystem has been steadily flourishing over the past five years, establishing itself as one of Europe’s most vibrant hubs. Yet, there are still hurdles the Netherlands needs to overcome in order to reach its full potential and successfully compete on a global scale.

That’s according to the annual State of Dutch Tech report by TechLeap, a non-profit organisation which helps quantify and accelerate the ecosystem in the Netherlands.

Here are seven key takeaways from the report you need to know about:

The Netherlands houses the EU’s most successful ecosystem

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In 2022, the Amsterdam-Delta region was the leading ecosystem in the EU, overtaking Paris and Berlin. Globally, it ranks on the fourteenth place, behind cities in the US, Asia, and the UK.

However, the combined valuations of Dutch startups stagnated, with

the tech sector in the country dropping from the fourth to the sixth position globally at €0.4T in aggregate public market cap. The Netherlands is still the leader in the EU thanks to tech giants ASML, Prosus, and Adyen.

Fintech and healthcare were the dominant startup sectors in the country, with the first producing the greatest number of scaleups as well. The Netherlands also welcomed one new unicorn in 2022, bringing its total to 1.4 unicorns per million inhabitants. This places it above France (0.7) and Germany (0.5), but below Sweden (2.4) and the UK (1.7).

The tech sector is also growing outside the Amsterdam-Delta

Although the North Holland region remains the largest startup centre in the country, generating 38% of startups jobs, other local hubs are also growing thanks to regional specialisations and mutual cooperation.

For instance, North Brabant showed a 27% year-on-year growth in deeptech jobs, Utrecht increased its numbers of startups by 900, and Gelderland has become a leader in foodtech.

Job creation increases, but attracting talent remains a challenge

In 2022, startup-generated jobs reached 135K, rising from 109K in 2020 and 130K in 2021. Attracting tech talent, however, presents to be challenging for many startups.

Specifically, the percentage of hard-to-fill tech jobs has increased to 59%. On average, these types of vacancies stay open for more than 60 days.

This phenomenon occurred in other ecosystems as well, including Sweden, Germany, France, and the US.

Dutch startups struggle scaling up mainly due to lack of funding

The startup to scaleup ratio in the Netherlands (22%) is lower compared to other European hubs, such as Germany (37%), the UK (30%), and France (26%). That’s mainly because of insufficient capital.

In 2022, total VC funding in the Netherlands was €2.6 billion with the average funding being €0.26 million per startup. This was significantly lower than other major EU startup ecosystems. For reference, Sweden’s average was €0.9 million per startup.

Despite the Netherlands’ prowess in scientific and academic research, deeptech is amongst the underinvested sectors with €0.7 billion in funding in 2022 and a 23% startup to scaleup ratio.

On the brightside, investments on impact startups are on the rise with over €1 billion raised in 2022. And investments in all sectors overperformed pre-pandemic levels.

The gender gap

The gender gap is still a problematic issue within the industry. Just 10% of Dutch tech startups are run by women, and funding for female entrepreneurs is similarly insufficient. Only 0.7% of venture capital investments have been raised — since 2019 — by businesses with female founding teams, lagging behind the UK (2%), Germany (1.5%), and France (1.2%).

The potential for further growth

According to the report, the Dutch tech ecosystem has a massive potential of growth. In particular, it could add 250K jobs and €400 billion in value by 2030. This could be done by supporting the growth and impact of university spin-offs, bridging the talent and diversity gap, and cultivating a more resilient and internationally-embedded VC market.

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