And what we can expect from the country where the Prince leads an innovation hub, speaks at startup conferences and manages a €65m project for making a “unicorn nation” out of the Netherlands
By Anastasiya Markvarde for bel.biz
In September 2019 I had an honor to be selected to participate in SoftLanding program where startups and ecosystem builders (like me from Imaguru Startup HUB) enjoy a possibility to get an insider vision on the Dutch startup ecosystem, opportunities for opening a company branch, possibilities of bringing non-EU employees on board and Dutch business culture. Here below you will find practical info on these topics together with some curious facts about the Netherlands.
And before I will tell you more about the Dutch Prince’s involvement in a startup business, I would like you to meet another hero of my story who is not less inspiring than the representative of the royal family himself. Maurice Beckand Verwee, Founder of Crosspring – an investment company that organized Softlanding mission, – agreed to answer some of my questions for this article. Crosspring invests in both European and non-European startups and is based in Zoetermeer, a small city near the Hague (no matter how hard you try to pronounce “Zoetermeer”, the usual answer you get back from the Dutch people is “Sorry I didn’t get that” together with the puzzled look on their face).
– Tell me briefly about the activities and focus of Crosspring.
Crosspring is an investment firm with a focus on early stage digital startups in Europe. We have invested in over 50 companies in the last 10 years. Industries we feel comfortable to invest in are FinTech, AR/ VR, B2B, SaaS, Publishing, Security etc. The important thing is that the core technology would be software. In addition, an international mindset is what we are looking for companies we invest in and here we facilitate where possible because Crosspring is an authorized startup visa facilitator. This means that founders from outside the EU can easily get a visa to work and set up a company in the Netherlands.
Maurice Beckand Verwee (to the right), a founder of Crosspring (Photo – Venture Day Minsk)
– You have many years of investment experience and certainly you could set up your fund / incubator anywhere in the Netherlands or Europe. Why Zoetermeer? What is your opinion on the potential of small cities to become innovation centers?
We had offices in Rotterdam and Amsterdam and have been active in many European cities. There is no perfect place in the world to have your office. What is important to us is the proper balance between growth potential, access to talent, access to relevant networks, costs etc. Zoetermeer is only 15 min from The Hague, 25 min from Rotterdam and 40 min from Amsterdam. We have two airports nearby and the Dutch public transport is also well organized. The city has a University with ICT focus and the balance between the costs of living and available facilities is good. This makes Zoetermeer attractive to us and our portfolio companies.
Obviously, smaller cities are not always attractive to have an office in. It depends on some of the characteristics I mentioned before. I do believe that on the European and country level we need to stimulate activities in the smaller cities. Too much concentration in one city could make the competitive advantage of the whole country weaker. In the Netherlands we are lucky to have different regions with their own verticals. For example, for Rotterdam those would be IOT, Logistics, Fintech. For Eindhoven – semi conductors, for Wageningen Foodtech and AgriTech, for Leiden – Biotech and Zoetermeer ICT and security.
– As I have learned, you are doing business in Armenia and also looking closely into the Belarusian market. What is different for you in making the decision of whether to invest in an Armenian / Eastern European startup versus a Dutch startup? Do you see any specific difference between Dutch startup founders and founders from developing ecosystems?
We have been active in the European market for many years and have seen a shift of potential in the different regions. Until 2014 we received a good deal flow from the Western European founders but somewhere in time it has changed. There is still good deal flow but it is not as big as before.
Due to an abundance of startup and acceleration programs, we see the rise of the Wantrepreneurs. People that want to become an entrepreneur but are doing that not for the right reasons: they are mainly attracted to the life style. What we have seen in the Eastern European countries is an increase of founders that have worked in outsourcing business but now wanting to build their own technology.
The good thing is that they have learned to work on different projects and have strong programming skills. One of the skills that they mostly lack in is marketing and sales. But with the right guidance we believe we can help the companies scale. Another challenge for them is a small and underdeveloped economy in their home country. We therefore help the companies to set up sales offices in, for example, the Netherlands.
– Why Crosspring is organizing the Soft Landing program? Besides obvious advantages for startups-participants, how would you evaluate the outcome for Crosspring?
We have organized 4 Fintech “softlandings” in the last two years. We have invested in one participant and are currently discussing the possibility to invest in 3 others. These are direct outcomes for us.
The indirect value of these programs is that we expanded our network in Europe and abroad. Connecting during a SoftLanding has given us strong business and friend relations which we will further benefit from in the upcoming years. We will not stop with organizing Soft-Landings because our portfolio company uGlobally will continue to further facilitate these missions with the help of their partner network.
Dutch Innovation Factory in Zoetermeer, the Netherlands, where the first day of SoftLanding 2019 took place (photo – https://www.dutchinnovationfactory.nl)
So what exactly did I learn during Soft Landing? I would again stress that the program was loaded with the maximum of practical information:
– Sessions on the conditions for setting up a company / a startup in the Netherlands by RVO (Netherlands Enterprise Agency), Innovation Quarter (regional economic development agency for West Holland) and Baker&McKinsey Law company
I will focus on the part that describes Dutch ecosystem together with the efforts done by the Dutch to attract foreign startups.
It is curios that we use to talk about the UK or the US ecosystems and don’t seem to know that much about the one of the Netherlands – one of the most innovative and developed countries of Europe. If we start naming the Dutch unicorns ad scaleups, we would not probably get much further Booking.com, but there are also Takeaway.com (online food delivery), Picnic (online supermarket), MessageBird (single API for customer communications), Protix (a multinational manufacturer and supplier of insect ingredients raised €45 M in 2017) and Adyen (a global giant, payment system raised $250 M back in 2004).
There are also international startups based in the Netherlands that are Quicargo (use of excess space in trucks), Airsquire (construction verification through 3d verification), CricketOne (supplier of food ingredients, specialized in extracting proteins from crickets) and Publishizer (crowdfunding publishing platform raised €376K). Currently, there are around 200 foreign startups per year coming on startup visa to the Netherlands.
The areas of startup development (as well as economic and research development) are mostly regionally focused in close relation to the focus of the leading university of the area. Even though the Netherlands is quite small, certain parts of the country are stronger in a certain technology – a curios and a great fact in my opinion. One of the good examples is Eindhoven – technical university manufacturing and machines where such corporates as Phillips are based. Another example is Delft with Delft Technical University focused on space and mechanic engineering and Yes!Delft – a hardware-focused accelerator. By the way, YES!Delft is a non-profit governmental incubator that doesn’t take equity and has a reputation of opening all the doors to Dutch investors if you get in (if – because from 800 applications YES!Delft only selects a couple of startups).
Here you can see the map of Dutch accelerators and incubators that are also the authorized startup visa facilitators (as Crosspring).
Dutch incubators and accelerators authorized as startup visa facilitators (source – RVO)
Another institution worth mentioning is StartupDelta, an independent public-private partnership that collaborates with the Netherlands’ primary innovation hubs to speed up innovation, attracts startups, corporates and investors to the Netherlands, and facilitates the dialogue between a startup community and policy makers. Apart from being notable for playing the role of an accelerator for the Dutch startup ecosystem, it also attracts attention for another reason: StartupDelta is led by Constantijn van Oranje, the Dutch Prince, a brother of King Willem-Alexander (yes, I am getting back to the promised story about the prince). Constantijn is also a regular speaker at national and international tech conferences (like Websummit, Slush, South Summit, The Next Web).
Constantijn van Oranje, the Dutch Prince (photo – StartupDelta)
And here it gets even more exciting: Constantijn leads the project of turning the Netherlands into a ‘unicorn nation‘. StartupDelta is now being renamed to Techleap.nl and given new funding of €65m up to 2023. The budget will be used to help young startups grow into large sustainable companies and to make it more attractive for foreign startups to set up in business in the Netherlands.
Anyway, we all know that one thing is a quality PR and another thing is real life. That’s why here is a story from Rodrigo Olmedo, our host from Crosspring portfolio company UGlobally who is Brasilian and came to the Netherlands on startup visa.
– 2 years ago I was looking for a country to go to and I ended up on the website of the Immigration and Naturalization Department of the Netherlands. I remember I had some question so I left my contacts and the description of my project on a “Contact form” page where you never ever expect someone to reply to you. I was sure I wouldn’t get any help so I just thought “okay, at least I tried”.
The next day I get a call on my mobile saying “Hello, we looked into your project, it looks pretty cool, how can we help you with moving to the Netherlands?”. And I was like “Wow, is that really Dutch government calling me?”. The thing is I was in the middle of a presentation so I had to ask them to call me back later in one hour. And then I thought “well, now I lost it for sure, it is gone forever”. But they still called me back in one hour to help with the explanations about Dutch startup visa.
And in general, will all the support from our facilitator, Crosspring, the whole visa application process was really very easy and in around 2 months after the application I already had my visa.
Rodrigo Olmedo opening one of the sessions of SoftLanding 2019 (photo – Crosspring)
This should be enough to persuade you in the easiness of getting the Dutch startup visa, but what about the rules for non-EU startups and recent updates on them? (I am focusing on non-EU workers because the EU nationals don’t need a visa).
If you are a non-EU startup, you will need to find a facilitator that I talked about before and then you get a full support on all the questions. I will not go into the details on that because it is easy to find them here. There are certain conditions you will need to meet like the “innovativeness” of your product or having a business plan, but you get most the support from the facilitator.
If you like to hire non-EU workers as a startup, then it gets more interesting. You need to have a status of a recognized sponsor (which is extremely complicated to get for a startup) and meet quite high salary threshold on Highly Skilled Migrant (HSM) program which is around 4500 euro in monthly wages. If you don’t have a recognized sponsor status than your employees could try applying for the European Blue Card where the threshold is even higher (around 5300 euro in monthly wages).
However, the government of the Netherlands decided that if you like to hire non-EU employees there might be an actual reason for that. That’s why the Dutch authorities are introducing the startup immigration pilot expected to be launched in Summer 2020. The pilot duration is set as 3 years but it may be prolonged afterwards.
What is it about? Dutch or foreign startups based in the Netherlands will be not required to have an authorized visa sponsor status and the salary threshold to meet will be set at 2400 eur monthly wages. The startups will be allowed to invite up to 15 employees under condition that these employees will have a participation in the company – stock options. Quite a tricky condition as well, but still a really good opportunity for a startup. In any case, the pilot demonstrates that the government is really focused on the growth and development of startup companies in the Netherlands.
There us the insights that I wanted to share though there were a lot of other things that I learned during SoftLanding program. I hope you are really inspired by the Dutch ecosystem and unless you are already buying the tickets to the Netherlands to go and check it out I have another tip for you: you can meet Maurice Beckand Verwee, a Founder of Crosspring, at Imaguru Startup HUB in Minsk on 29-30 of October 2019 at our Business Angels Bootcamp!