Amsterdam Tech Scene--Joining London and Berlin as a Premiere European Startup Ecosystem
The Dutch are old masters of innovation and globalization. In fact, the official launch of Amsterdam Captial Week appropriately took place in the old Amsterdam Stock Exchange, the first stock exchange in the world. The Dutch East India Company (VOC) was the original disruption of global commerce. At a time when trade companies would form to carry out a particular voyage and disband upon its return, the VOC turned the industry upside down by establishing a permanent company that issued shares of its business in order to raise capital. Sound familiar?
Unlike other major European cities which were built by empires, Amsterdam was built by merchants. This entrepreneurial spirit is very much alive and thriving as the city evolved over the past few centuries. In addition to the Dutch history of disruptive companies, there are three main factors that propel the city to join the ranks of London and Berlin. Firstly, Amsterdamers and the Dutch market as a whole openly embrace innovation. This quality makes the Netherlands a great testbed for new products and services. Tesla, for example, has its European headquarters in Amsterdam and has been able to reach the mass market through its fleet of electric taxis that shuttle visitors to and from the Schipol International Airport. The move towards electric vehicles is a part of the airports strategic push to become the greenest airport in the world. However, Amsterdam hopes to lead the world in more ways than just in sustainable transportation. Blippar, an augmented reality company , for example, is working to make Amsterdam the world’s first Blippable City, whereby visitors can interact with the city’s museums and engage with its landmarks through unlocking interactive content on their phone.
Secondly, Amsterdam is strategically positioned for any companies looking to expand in Europe and beyond. The city is located in the middle of what is known as the European Blue Banana and has strong connections with the outlying Scandanavian markets. Amsterdam also has historical ties with other major global markets such as India and Japan; the fact that the Dutch can easily work in English also attracts global businesses. Lastly, unlike the UK, Germany, or even the US, the Netherland’s relatively small size has enabled all of its tech clusters to form a tight knit network. There is a strong ethos here of collaboration and knowledge sharing.
On the top of Amsterdam’s intrinsic characteristics that make it a great place for startups, policy makers are also keen on fostering this ecosystem. The Deputy Mayor of Amsterdam, Kajsa Ollongren, more fondly known as The Startup Mayor, is a pioneer in launching StartupAmsterdam earlier this year. Her belief in the role of technology and innovation in Amsterdam is exemplified through the introduction of coding to the primary school curriculum. StartupAmsterdam is a public-private partnership that connects startups with government resources and the expertise of successful entrepreneurs. This integrated network of support within Amsterdam’s tech ecosystem creates a launch pad for new businesses to achieve scale. StartupAmsterdam also brings in entrepreneurs to tackle challenging societal issues such as waste management, mobility, and connectivity through its Startups in Residence programme. Furthermore, the former EU Commissioner Neelie Kroes, who helped to develop the European Policy for the digitalization of society and economy, was appointed Special Envoy to strengthen the international position of startups in the Netherlands and persuade innovative foreign startups to establish their businesses there. As Special Envoy, Kroes also leads StartupDelta.
[Deputy Mayor of Amsterdam Kajsa Ollongren]
In the Netherlands, attracting and retaining talent is aided by the country’s reputation of a high quality of life. Pieter van der Does, President & CEO of the Amsterdam’s home-grown FinTech unicorn Adyen, explains that the people who helps him grow his company everyday are people who can work anywhere, but have left other thriving tech companies to seek the Dutch way of life. The high calibre of Adyen's employees shows in its latest valuation at $2.3 billion after a new round of investments from Iconiq Capital, which invests behave of clients like Mark Zuckerberg. The Dutch capital also has a relatively lower cost of living as compared with other European capitals like London or Paris. From a policy perspective, the Dutch tax system further supports foreign talent by offering a 30% reimbursement of a foreign employee’s salary if the expat has expertise in an area with a shortage in the domestic labour force.
What Amsterdam still needs in order to compete with London and Berlin- - is investment capital. The first step in addressing this capital gap is by educating the startup community on where and how they may obtain funding. In true Amsterdam style, the organizers of the Amsterdam Capital week led a biking tour of the city where more than 30 investors opened their doors to groups of hopeful entrepreneurs for an afternoon of frank discussions on raising capital. Investors were also challenged to pitch their firms to startups during the Capital on Stage Conference. This diverse group of investors ranged from large international firms willing to invest in hundreds of millions of Euros to a start-up investment firm that officially launched this month. A key characteristic that many investors look for is that the company has some links to the Netherlands. Several investors were successful Dutch entrepreneurs who have returned to the Netherlands from London or the Silicon Valley. But as Robert Jan Galema, the managing director of Dutch VC firm INKEF pitched, “we are not investing in the best of Holland, we are investing in the best of the world that just happens to be in Holland.”