Strong research bodes bright future for Dutch venture

The Netherlands’ excellence in the fields of ICT and Life Sciences is driving dealflow up and prompting optimism for the future. By Francinia Protti-Alvarez

The Dutch venture sector is in rude health, with high quality academic research and strong entrepreneurship likely to lead to a surge in quality investment opportunities in the future, according to Daniel Mulder, adviser at the Netherlands Venture Capital Association.

Mulder especially stresses the importance of the information technology and life sciences sectors, areas in which he asserts the Netherlands shows particular excellence.

Investment activity into the country would seem to bear this out: unquote" data reveals that approximately 60% of transactions in the Dutch early-stage segment in 2009 came from investments in the software and computer services sector and biotechnology. This, in a year when the country bucked the wider European trend and scored its highest total for venture deals in a decade, recording 20 transactions.

The largest reported deal was the €12.5m series-A round of funding for biotech firm arGEN-X. The investment was initially a €9.5m financing co-led by Life Sciences Partners (LSP) and Forbion Capital Partners, which was topped up with a further €3m from investors including Crédit Agricole Private Equity later in the year.

Notwithstanding the positive figures, the Dutch market does remain small compared to its peers and Mulder concedes that there has been an issue in the past with commercialising some of the research being produced. "The conversion from academic research to commercialisation requires a bit of work," he notes, "but the entrepreneurship that characterises the Dutch business model and upcoming government stimuli are likely to improve this process over the next few years."

The track record is there: according to figures from Life Sciences & Health -a combined initiative for and by all parties active in the health-related life sciences in the Netherlands - there are a total of 935 companies operating in the life sciences sector, generating a turnover of €15.9bn.

With these many companies active in a sector that is this cash generative, Mulder is understandably bullish about the future. "We are likely to see activity really pick up over the next couple of years as investors have money to spend, though of course this is based on the current outlook remaining the same."