Growth in the Dutch tech sector has stalled, and there is an “alarming decline” in the number of startups, according to sector association Techleap in its latest report on the state of the domestic technology industry.

The number of Dutch startups successfully scaling up to become larger companies also remains low, Techleap said in the report, published on Wednesday.

“The growth and development of the Dutch tech sector is stagnating. This is worrying because technology is becoming increasingly decisive in international competition,” said Techleap’s special envoy Constantijn van Oranje.

“While other countries are investing in a healthy growth climate for tech companies, the Netherlands is falling behind. Our tech companies are suffering from regulatory pressure and need more growth capital, better access to talent, and global markets.”

Venture capital

In total, Dutch tech companies raised €3.1 billion in venture capital over the past year, a 47% increase compared to 2023, putting the Netherlands in fourth place after Britain, Germany, and France.

However, European investors played a more prominent role in larger funding rounds, with Dutch investors contributing just 15% of venture capital raised (down from 61%).

Securing early-stage investments (up to €15 million) remains one of the biggest challenges for startups, Techleap said.

Only 104 startups raised more than €100,000, a 23% decline compared to 2023, when 172 startups managed to do so. The number of deals also decreased by 20%.

In addition, investments in AI in the Netherlands significantly lag behind those in other countries, such as Switzerland and Britain, Techleap said.

Politicians

“I am not going to tell politicians what they should do, but if you opt to be a knowledge-based economy, you have to get it right from the beginning,” Constantijn told broadcaster NOS.”The best universities create the best talent.”