Dutch startups witnessed a notable funding resurgence in 2024, securing approximately €2.5 billion, representing a 19% increase compared to €2.1 billion in 2023. However, while the overall funding figures reflect a positive trajectory, the landscape remains complex, with certain investment trends showing signs of contraction. The intricate dynamics of funding rounds, declining deal volumes, and lengthier fundraising timelines have underlined the nuanced challenges facing the ecosystem. This blend of growth and difficulties highlights the evolving nature of venture capital and startup financing in the Netherlands.
What explains the drop in deals?
The number of deals in 2024 fell significantly, recording an 18% decline with 342 published investment rounds compared to around 415 annually from 2021 to 2023. A reduction in pre-seed investments also contributed to this trend. Deals under €1 million constituted only 25% of the total in 2024, a decrease from one-third in 2023. Despite the increase in funding volume, the shrinking number of deals reflects a more cautious approach by investors navigating economic uncertainties and market volatility.
Why are startups facing delays in securing funds?
Startups are encountering extended timelines in raising follow-on funding, with Seed and Series A rounds becoming harder to close. The report indicates that many companies now rely on extension and bridge rounds to sustain operations. Venture capital firms are not immune to these challenges, often needing longer periods to raise their own funds, resulting in smaller fund sizes or even the abandonment of fundraising efforts. The constrained fundraising environment is adding pressure on both startups and investors to adapt to shifting market dynamics.
In earlier reports, 2021 and 2022 were marked by record-breaking investments in Dutch startups, driven by strong global interest in technology and innovation sectors. However, the economic slowdown beginning in 2023 dampened this momentum, leading to a decline in both deal numbers and investor confidence. The current findings align with these patterns, showing a lingering hesitance in investment activity despite the recovery in total funding volume for 2024.
Golden Egg Check CEO Thomas Mensink expressed cautious optimism about the current environment:
“After a good start in the first quarter, I had expected and hoped that after almost two years of relative status quo, investment growth would pick up. Unfortunately, that was not the case. Many startups are having a harder time attracting follow-on funding, investors often have to step in with additional capital and they need more time to raise new funds. So there are still many challenges. A better exit market in 2025 can ensure that investments also come on stronger.”
Despite the challenges, the top investments for Q4 2024 show pockets of promise. Citryll secured €85 million, Cradle raised $73 million (€69.5 million), and Meatable attracted €30 million. These large funding rounds indicate continued investor interest in high-potential ventures, particularly those in innovative or high-demand sectors. However, these successes have been overshadowed by a 26% decline in funding during Q4 compared to the same period in 2023 and an overall drop in deal volume.
The Dutch startup ecosystem’s 2024 performance is a mix of cautious optimism and underlying challenges. While the total funding growth is encouraging, the continued decline in deal volumes, particularly at the early stages, signals a need for structural adjustments. A stronger exit market in 2025, as suggested by industry leaders, could incentivize new investments and stabilize the funding landscape. For startups, diversifying revenue streams and focusing on operational efficiency will be key strategies to weather the funding delays and constraints.
