Investments in Dutch startups fell over economy concerns, military conflicts

The amount invested in Dutch startups fell by a massive 27 percent to 1.9 billion euros last year, the Dutch Startup Association (dSA) reported. Uncertain times, particularly the high interest rates and multiple wars, made investors hesitant, Lucien Burm of the dSa told NOS.

Large startups, in particular, noticed the drop in investments. “You really had to make sure you had a view on profit,” said Burm. “Startups started downsizing, sometimes preventively, in the hope that they could survive longer. It varies per company, but sometimes it involved tens of percent of the workforce.”

Newer startups had an easier time. “It has actually turned upside down. Investments are now going to young companies. If people think that things will remain uncertain in the coming years, then this is a good investment because it will take years before these companies become big. Then the market may be different again,” Burm said.

Despite the drop in the investment amount, the number of investments increased last year, as it has done continuously for years. “That structural growth has been there for a long time,” Burm told NOS. There is still good hope for the future. “We are now also experiencing calmer conditions. Interest rates have stabilized, there is a lot of enthusiasm from people with assets, and a lot of money is available.”

During the coronavirus pandemic, many investors pushed money into tech companies. Last year’s amount was still above the pre-pandemic levels. Burm expects another wave of investments focused on AI companies. “AI exploded last year, but the major investments have not yet materialized. We expect that wave, which is now starting to swell, to come at the end of the year or next year.”