The investment landscape for Dutch startups in Q3 2024 remained stable compared to the same period in the previous year, with approximately €424 million invested. Despite a small decline from the previous quarter’s €427 million, the overall investment for 2024 has exceeded €1.9 billion, surpassing the total for 2023. This financial trend highlights the resilience of the Dutch startup ecosystem despite challenges in securing early-stage funding and a broader global market that continues to be cautious. The data was compiled by Enschede-based Golden Egg Check in collaboration with Dealroom.co, KPMG, the Regional Development Companies, and other partners.
Earlier reports had indicated a similar trend of fluctuating investments in the Dutch startup market. While the total capital inflow showed consistency, the number of deals has seen a downward trajectory, contributing to concerns about the long-term sustainability of early-stage startups. The focus on larger investments has been noted in previous analyses, emphasizing a shift towards mature startups and scale-ups while early-stage funding dwindles. This pattern is not unique to the Netherlands, as global markets show similar behavior.
Are Early-Stage Investments Declining?
Yes, the Quarterly Startup Report highlighted an 8% drop in the number of deals during Q3 compared to the same quarter in 2023, with a noticeable reduction in early-stage (Seed) investments, which comprised 40% of the total deals. Lucien Burm of the Dutch Startup Association voiced concerns over the decreasing angel investments, suggesting that an incentive scheme could alleviate this trend. He emphasized the importance of nurturing early-stage companies to sustain technological growth and economic stability.
Which Industries Received Major Investments?
Cleantech and deeptech sectors were prominent in Q3, with companies like Battolyser Systems, Quatt, and Carbyon securing substantial funding. High-tech firms also saw significant investments, as evidenced by Nearfield Instruments’ €135 million funding round. Despite these advances, the Netherlands lags behind the UK and France in AI investments, reflecting a potential gap in the emerging technology sector.
The data showed that while the overall investment amount remained significant, the number of larger deals (Series B+) decreased, contributing to challenges in sustaining startup growth. Noteworthy deals in the quarter included Payt (€55M) and Avidicure (€37M). However, the total number of deals remained one of the lowest since Q1 2021, raising concerns among industry players about the potential for a long-term decline in investment activity.
Thomas Mensink of Golden Egg Check noted that while the third quarter typically sees a lull due to the summer, the persistent decline over three consecutive quarters indicates a worrying trend. Myrthe Hooijman of Techleap echoed these concerns, stressing the need for strategic investments in deeptech and AI sectors to bolster the future of the Dutch tech industry.
For the Dutch startup ecosystem, these findings highlight the need for strategic interventions to stimulate early-stage investments. As larger investments continue to dominate, a balanced approach is essential to ensure the viability of emerging companies. Policymakers and investors must consider long-term strategies to nurture startup growth amid fluctuating investment trends.
