Dutch Venture Capital Surges, But Innovation Policies Lag Behind
The Hague, Friday, 23 August 2024.
Recent data reveals a rise in venture capital investments for Dutch deeptech firms, particularly in AI, sustainability, and biotechnology. However, companies are urging the government to enhance innovation policies to ensure long-term growth and competitiveness in the global market.
Current Trends in Dutch Venture Capital
Despite a significant rise in venture capital (VC) investments in Dutch deeptech companies, the total investment amount in the Netherlands fell to €430 million in Q2 2024, representing a 59% decline compared to Q1 2024. The number of deals, however, remained stable, with 87 deals in Q2 compared to 89 in Q1. The surge in investments was driven mainly by substantial deals exceeding €1 billion, though these were more prevalent in the U.S., the UK, and Germany[1].
Key Sectors Attracting Investments
In the Netherlands, significant investments were concentrated in AI, sustainability, and biotechnology sectors. This trend aligns with global patterns where AI companies, in particular, have been prominent in top deals. For instance, Wayve, an AI company focused on autonomous driving, raised €917.6 million, and lender Abound secured €917.3 million[1]. These large deals underscore a growing interest in technological innovations that promise substantial economic returns.
Top Performing Dutch VC Funds
Several Dutch venture capital funds have demonstrated high internal rates of return (IRR), indicating profitable investments. Leading the list is BioGeneration Ventures II with an IRR of 104%, followed by Forbion Capital Fund IV with an IRR of 71.3%. These funds have been instrumental in supporting startups and early-stage companies, particularly in the healthcare and life sciences sectors[2]. BioGeneration Ventures II, for example, has investments in Cristal Therapeutics, a company based in Maastricht[2].
Challenges and Calls for Policy Reform
Despite these promising developments, Dutch companies are advocating for more robust innovation policies from the government. They argue that without supportive policies, the current growth in venture capital investments may not be sustainable in the long term. Companies are particularly concerned about maintaining their competitive edge in the global market, which is increasingly driven by rapid technological advancements and innovation[1].
European Context and Future Outlook
Across Europe, VC deal activity is on the rise, with expectations for continued growth through the end of 2024. The UK and Ireland, traditionally dominant in capital raising, were surpassed by France and the Benelux region for the first time since 2018[2]. This shift indicates a broader European trend towards increasing investments in innovative sectors. For the Netherlands, aligning national policies with this trend could be crucial for sustaining and enhancing its VC investment landscape.