Although the Netherlands provides little capital for start-ups, there are many online platforms settling in the area. According to a recent report by Silicon Valley research agency Startup Genome, Amsterdam is in third place as a start-up city in Europe, partly due to the 433 IT companies in the region, reports the Financieele Dagblad (FD) newspaper.
Stockholm is at the top, since Sweden is similar to the Netherlands in terms of market opportunities. “The Swedes are more familiar with software and technology than the Dutch and the early successes with Spotify and the payment services Klarna and IZettle attracted talent and money to Sweden. Our ambition must continue to take over that number 1 position; that is feasible,” says Jay Andriessen, from venture capital fund HenQ, in an interview with FD.
Therefore, in order to get to the first spot, investors say the market must do better. One example is investing in conquering markets in an ‘American’ way during the early years of the start-up. Once the customers are in, the early loss is eliminated by expanding the number of services. Thomas Vles, director of the Dutch Startup Association, tells FD: “Professional seed capital does not really exist in the Netherlands. The startup association is working on positive legislation to stimulate start-ups and investments.”
However, Johan van Mil of Peak Capital, an investor in young tech companies, says: “There have been more investors in the last five years, mainly because of the successful stories of Adyen and Booking.com. Five years ago we started our first fund with € 12 million. Last year we raised € 66 million with our second fund.”
The tech players in the Dutch market
An advantage over foreign competitors is that Dutch players are often relatively economical, with low costs and high profits. Besides, the Netherlands has a long tradition of being a trading country. Dutch companies such as Adyen, Booking.com, Takeaway and WeTransfer are now well-known worldwide. On the other hand, names like Mollie, Zivver, Siilo, Channable, Creative Fabrica, Relay42 and Studocu are still looking to break through, dreaming of becoming the next big thing in the industry.
Another Dutch player in the spotlight is Messagebird. The platform brings together 15,000 companies, such as ABN Amro and Uber, with their customers via a chat service. The company wants to go public next year and is expecting a revenue of $ 300m in 2020. The first five years’ growth were paid for from the founders’ money and cash flow, before an external injection $ 60m that allowed it to really grow.
The Netherlands has fifteen young tech companies worth more than € 1 billion, out of a total of 190 such unicorns in Europe. Forty Dutch tech platforms raised more than € 10 million in their last financing round, out of 758 in Europe.
The Netherlands is a hot spot for fin-tech companies
Research from the Ministry of Finance showed the number of fin-tech companies in the Netherlands has tripled in three years, with more than six hundred such companies in existence last year. According to the Volkskrant, one third of these companies are in the capital and one out of ten is in the Utrecht and The Hague area. The Dutch number is far behind Great Britain (1,600 fin-tech companies), but close to Germany (800) and France (775).
Usually, fin-tech companies aim for speed and ease of use for their services. Other reasons for the fast growth of these companies in the Netherlands include the wide range of professional talent in Amsterdam, the fact that many international companies have their head offices here, the proximity to the airport and the well-functioning case law.
A giant Dutch fin-tech company in Amsterdam is payment provider Adyen. It will even get its own metro entrance, as a tunnel will be built from Rokin station to the new headquarters of the company. The company hopes that it can take up residency in the former buildings of failed department store Hudson’s Bay by Christmas. Investors say the company is worth over 40 billion euros. Its most important competitors are major bank ING at just under 26 billion, and ABN Amro at less than 4 billion.
Another fin-tech player in Mollie, which will move to a beautiful location at the Keizersgracht in August. This company is smaller, but wants to do big things, and the new office will have a game room, cafe, plush sofas and brainstorming rooms with huge whiteboards. Nearby, there are the offices of investment platforms such as Bux, international bitcoin company Bitfury, booking service Bidroom, digital bank Bunq, investment platform DeGiro, and IMC, Optiver and Flow Traders, high-tech flash traders in shares. Fin-tech is clearly booming in Amsterdam and this is expected to remain the case in the foreseeable future.
Written by Raphael Perachi Vieira