Fewer fast-growing startups in the Netherlands

The number of startups in the 250 fastest-growing companies in the Netherlands ranking has halved. Fewer companies are able to scale up and grow quickly, mainly due to the circumstances in the financial markets, professor Justin Jansen of the Erasmus Center for Entrepreneurship (ECE) told Telegraaf.

The ECE’s annual survey of the 250 fastest-growing companies shows an increasing trend in the age of the companies due to the decreasing number of startups. In 2022, the average company in the top 50 was 11 years old. In 2023, that increased to 13.4 years, and this year it’s 16.4 years.

According to Jansen, the current circumstances in the financial markets, such as the increased interest rates since Russia invaded Ukraine in February 2022, have put pressure on investments in start-ups. Companies increasingly have to stand on their own feed because financing is more difficult to obtain. “Mature companies are often more resistant to these fluctuations.”

“The days of quick money and scaling up within a few years are behind us. That doesn’t necessarily have to be negative. It leads to more realism and less inflated ambitions that turn out to be unachievable,” Jansen said. “After an initial growth spurt, many companies fall back because they are insufficiently able to scale up the organization. They pay little attention to restructuring the organization, such as establishing and improving processes and obtaining sufficient resources such as financial and human capital.”

The ECE ranking measures growth based on turnover and employees, not necessarily profitability. This year, 113 of the top 250 are newcomers on the list. 26 weren’t on the list last year but were in previous years. And the remaining 93 were also in the top 250 in 2023.

For the first time, three NGOs have also made it into the top 250 fastest-growing companies. Jansen called that a positive sign. “It shows that scaling up and rapid growth is not only for commercial companies but also for social enterprises that want to make an impact. These companies often have the same challenges as commercial companies, with the added hurdle that it is more difficult for them to obtain external financing.”