December 20, 2022

Dutch tech hammered hardest by the downturn

The Dutch startup scene has seen the largest dip in funding out of all Europe

It’s been a turbulent year for all of European tech — but one country has suffered more than most. The Netherlands has seen the largest dip in funding across all of Europe, down 54% this year compared to 2021. 

A lack of megarounds in the Netherlands this year can partially explain the nosedive in funding. In 2022, five Dutch companies bagged more than $100m — and just one received funding of more than $250m, according to Dealroom data. That’s in comparison to 2021, which saw nine rounds of between $100m and $250m, and five of more than $250m.

Investors Europe-wide are typically holding off on late-stage investments as it is, choosing to invest early in companies that will mature and exit when economic conditions improve. (Last month, we rounded up where investors would place their bets in the Netherlands under the circumstances.)


Dutch startups have started to tighten their belts, as companies have in other European ecosystems.  In the Netherlands, Dutch unicorn MessageBird — which bagged an $800m round in Q2 of 2021 — let go of around 31% of employees last month, attributing the cuts to growing its headcount too quickly. 

“Investors were increasingly looking into new emerging market opportunities — like the Netherlands — that are outside of the more mature ecosystems in the UK, Germany or France,” says Nicolas Brand, partner at VC firm Lakestar, about increased VC, and in particular US VC, interest in Europe in recent years. 

The Netherlands is well-positioned to continue attracting significant VC funding in the coming years

“Although younger markets tend to be more vulnerable to external shocks and can experience stronger funding swings, the current market won’t throw the trend we were seeing in the last years into reverse: thanks to its strong fundamental research, emergent support ecosystem and talented workforce, the Netherlands is well-positioned to continue attracting significant VC funding in the coming years.”

The late-stage funding gap

As the drop in large rounds in 2022 illustrated, growth funding in the Netherlands is in short supply, with domestic investors largely unable to provide large sums of capital at later rounds. The same is true of many other ecosystems in Europe — and means that many of the region’s biggest successes are owned by non-European investors, instead of domestic ones. 

A report released on Tuesday by Lakestar puts the growth financing gap in the Netherlands at €500bn over the next 20 years. (For comparison, Lakestar estimates the gap to be €100bn a year in Germany until at least 2040.)

“One of the reasons for this gap is that the sources of financing for growth companies in the Netherlands have changed significantly,” says Lakestar’s Brand. 

“In the past, growth companies had asset-heavy business models and often relied on funding from banks. While business models in the Netherlands have increasingly shifted towards asset-light and are fast-scaling, the asset allocation towards these types of growth companies in the country hasn’t kept up with that pace.”

Those asset-heavy incumbents include companies like Heineken and Philips, while current asset-light growth companies in the country include fintech Adyen and online fashion outlet Otrium. 

To plug the financing gap, the Dutch economy desperately needs a new wave of growth companies — 3,000 to be exact, according to Lakestar’s report. This would generate €2tn in value over the next 20 years.

Lakestar recommends encouraging institutional investors to shift assets from public to private markets, lowering investment thresholds for investors and removing regulatory hurdles. 


Largest Dutch rounds of 2022

It’s interesting to note that the big international players that backed large Dutch rounds in 2021 were largely absent in 2022 — underlying the importance of also developing domestic growth capital, which Lakestar encourages in its report. This year’s largest round was renewable energy company Perpetual Next’s €320m Series A, led by a Dutch fund, Momentum Capital.

The largest rounds of 2021 included a host of US investors. 

Fintech Mollie’s $800m June 2021 round was led by Blackstone Growth, the growth equity investing arm of US investment giant Blackstone. MessageBird’s $800m April 2021 round was an extension of its Series C, and included participation from Eurazeo, Tiger Global, Owl Rock, BlackRock and existing investors including London’s Atomico. 

The other biggest rounds for Dutch tech in 2022 are:

  • Property management system Mews: $185 Series C
  • Biotech for respiratory viruses Layden Labs: $140m Series B
  • Retail banking platform Backbase: €120m in growth equity VC
  • Enterprise software provider Pyramid Analytics: $120m Series E