‘It is time to show the world that the Netherlands is hot’
5 March, 2021 by
‘It is time to show the world that the Netherlands is hot’
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‘The quality of Dutch ventures is very good’, says Robert Jan Galema, managing director of the venture capital firm INKEF Capital that has €200 million under management. Galema’s statement attests the changing Dutch startup ecosystem echoed by startups raising more than 750 million since 2014 and possibly topping the one billion mark by the end of this year.

But INKEF is not a typical VC firm. It was launched in 2010 by the Dutch pension fund ABP, one of the largest pension funds in the world. Though like any other adroit VC firm INKEF invests in the best in class technology startups its interest is initially focused on startups founded in the Netherlands and in Series A investing. Galema: “When INKEF started 5 years ago our mission was clear and it’s still our focus today: capitalize on the high standard and the high level of technology from the Netherlands.” 

This specific focus on the early-growth stage might be a boon for the Dutch startup ecosystem in general as it has experienced a Series A crunch in the last decade. What’s more, it might propel seed investing by business angels to another level by reducing the risk of seed investing for Dutch angel investors. “With our ‘Angels in Residence’ we reach out to the seed area”, says Galema in this interview with Samir Saberi about the company’s investment strategy and the broader Dutch investment landscape.

Earlier this year you invested in Crowdynews and Shapeways. Your most recent investments are in Bloomon and Audion Therapeutics. Why did you invest in the latter two startups?

We invested in Bloomon because we were impressed by the movement the startup is causing with an entirely Dutch product and an innovative supply chain. The impressive growth during past months gives us great confidence in supporting the company to expand internationally. Audion Therapeutics provides a novel solution to loss of hearing, a devastating clinical condition that impact so many people around the world. The startup’s experienced management team, great technology and close ties with the lab of its scientific founder Dr Edge from Harvard Medical School and MEEI made us decide to invest in Audion Therapeutics.

Next week the ‘Amsterdam Capital Week’ will take place. Why are you supporting this event?

For INKEF it is a pleasure to be actively involved with the Amsterdam Capital Week. It is also logical. The quality and quantity of distinctive business propositions is increasing and everybody is getting aligned to support the many activities that are taking place to make the Dutch startup ecosystem better than it already is. It is time to show the world that the Netherlands is hot.

The Amsterdam Capital Week is a great initiative, but the Netherlands is not been really renowned for its affluence of venture capital.

I think that there is actually quite a lot of seed money, but it’s true that for the last 10 years there has been a Series A liquidity gap in the Dutch innovation pipeline.

How come Dutch VC’s don’t invest in Series A rounds?

This is because as an asset class series A funding didn’t perform well in the last decade. Due to the economic crisis there was more divestment than investment and there were not many trade-sales. As a result people that were actually very knowledgeable in nurturing a startup to a mature company moved their activates from early stage Series A venturing to growth capital.

But Tier-1 international VC’s do invest in Series A rounds in Dutch startups

Yes, but though there are quite a number of pan-European VC firms that focus on Series A funding and have more than €150 million assets under management none of them was specifically looking at the Netherlands. Yet, looking at Europe, big American VC firms also noticed the quality of Dutch startups, moving into the ‘Jordaan’ last year and investing for instance, 1 million in small company of four people. This is exactly the gap in the Dutch innovation pipeline that INKEF aims to mend.

What’s the sweet spot of your Series A round?

The sweet spot lies around 2 million, but initial investments can range between €1 million to well over €3 million. Our intended total investment in a specific company lies around €10 – 15 million. For healthcare startups we may reserve even more.

How does your focus on Series A funding help the underdeveloped angel investment landscape of the Netherlands?

I think that contrary to common belief there are quite a number of high profile business angels active in the Netherlands. The reason for business angels to be reluctant to invest in startups is exactly because of the lack of local investors focusing on Series A rounds.


Because in the absence of Series A funding business angels might be forced to pull their wallet again to keep their portfolio company afloat. Or the focus of the management team of the company tilts to raising capital that could take as long as a year. This could potentially be very harmful, because exactly at the this stage the management team should focus on the very more important metric: traction. Finally, the startup might decide to cross the Atlantic and attract an American VC, which might be considered too early by the angel.

Your ‘Angels in Residence’ program is tackling this problem

Yes, with this program we reach out a hand to the seed area. If we are excited about a startup we try to get a business angel on board on a deal-by-deal basis. The idea is that the angel invests in the seed round knowing that if the startup meets the KPI’s we agreed upon before and additionally actively supports the management team of the venture. This increases the likelihood of INKEF investing in the Series A round. In the end it’s obviously the angels’ own decision to invest and they should not invest only if we do.

What can startups expect from INKEF apart from funding

I think that the most important added value of INKEF Capital as an investment partner is that we understand how to scale a startup to a global technology company and that we are in for it for the long haul, up to 15 years. In addition we will advise on the appropriate funding strategy.

Is scaling an issue?

Organizing to scale is often underestimated. It’s a completely different ballgame to run a 15 people company compared to a 75 people company. If you plan for success you have to organize for success as well.

Most VC’s look for the so-called rebels and misfits. On your website you state that you’re looking for realistic management teams. How come?

Every fantastic business starts with a crazy idea, a spark. This translates itself into a proposition and ultimately in market traction. The crazy person needs the realistic ‘can-do person’ to get things done. You need both.

How do you help your portfolio companies to become global technology companies?

Essentially by becoming a committed partner for the long term. This means that though we invest in the Series A round our investment doesn’t stop there. If the right metrics are met, we will also invest in subsequent rounds. For follow up Series B rounds and beyond we reserve about a threefold of the Series A round. To enable startups to become market leaders we prepare them to expand globally and get a foreign investor on board if necessary.

Why do you get a foreign investor on board?

If you want to expand to the USA or Asia it’s good, sometimes vital, to have a local investor on board. Your funding strategy should go hand-in-hand with your business development strategy. The case of our recent investment in CrowdyNews together with Singapore Press Holdings (SPH) is exemplary. Exactly because of the support of this local investor Crowdynews is currently expanding extremely fast in the Asian market.

The special envoy for Dutch startups, Neelie Kroes, wants to give tax exemptions and ‘discounts’ to international startups and investors that establish here or want to open an office here in the Netherlands. Do you think that’s a good thing?

I think that anything we can do to make it more attractive for startups to turn into mature technology companies is good. I think that compared to the last 5 to 10 years ago the government is already making a very good effort.

How is that?

First of all the Dutch Venture Initiative helps a lot in getting more capital available. Regional development funds like InnovationQuarter, BOM, PPM Oost and others have in addition done more by making more money available for regional startups. Moreover, the coming together of public and private organizations demonstrates that the willingness to advance the Dutch startup ecosystem is huge. Finally, StartupDelta is a fantastic initiative that inspires everybody to focus on the whole country instead of having a quarrel of whether a startup should be in the East or South of the country. The business and not the location should be the leading principle.


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