In 2017, private equity and venture capital firms invested a total of € 4 billion in 411 Dutch companies. This total comprises investments in young and fast-growing companies (venture capital) as well as mature companies (private equity). Owing to this diversity, it is more informative to examine different areas of the market.
All figures shown are so-called market analyses, i.e. investments in and divestments from Dutch companies by domestic or foreign private equity or venture capital firms.
Information from 1989 onwards on the activities of private equity and venture capital firms registered in the Netherlands can be found in the archive's industry analysis. The methodology underlying the research, definitions used and the corresponding data files can also be found in the archive.
In the early phase there are various forms of venture capital (seed, start, or later-stage venture financing); in the mature phase the financing usually involves (management) buyouts and growth financing. A private equity firm can also finance a rescue/turnaround later in a company's life cycle.
The difference between later-stage venture financing and growth financing is that, in the case of later-stage venture financing, there is not yet any fully developed business model or product, but investments are made to bring this into development. In the case of growth financing, there is a fully developed business model and product, and investments are made, for example, for scaling up purposes (scale-ups). See for all definitions the definition list under ''Accountability and Archive''.
In venture capital, in general about 98% of all investments have an equity value of less than € 5 million. This includes very early stage investments.In private equity, about 51% of investments are less than € 5 million. This would typically be for an investment in a fast-growing SME.
Private equity operates in an international context, particularly in the buyout segment. In this context, the classification of investment size is different to the one commonly used in the Netherlands.
For transaction values also debt and equity of investors other than private equity firms (e.g. co-investing LPs) are taken into account. This means the leverage ratio cannot alway be inferred by comparing the equity and transaction amounts.
In the early as well as in the mature phase, Dutch companies are interesting for both local and foreign private equity or venture capital firms. A foreign venture capital firm can, for instance, help a start-up grow in a specific new
Also in the private equity segment we can see that Dutch companies are interesting to foreign private equity firms. Foreign investors are primarily involved in the larger private equity transactions. However increasingly local offices of international private equity firms are in charge of a particular investment. These investments are registered as being done by a Dutch GP.
Corporate venture capital represents a small group venture capital firms that allow larger companies to access innovation in the market better.
Regional Development Fund
The regional development funds* are important for the financing of young companies. Their goal is to stimulate regional economies and they have a government as a shareholder. They do not compete with regular private equity or venture capital firms. They have to focus mainly on riskier early stage small investments and, in a subsequent investment round, they generally cannot co-finance such large amounts as other parties. Because they have to co-invest with market investors, they stimulate further investment rounds.
In 2017 they invested in 140 companies, of which 106 received a form of venture capital. These were a total of 151 separate investments, of which 114 are classified as venture investments. The remaining investments mainly involve growth capital. In 2017 a total of 319 venture investments were made, of which 36% are made by regional development funds. They invested a total of € 89 million, of which € 47 million was venture capital, 15% of the venture capital total.
Private equity or venture capital firms often specialize in specific sectors, especially within the venture capital segment. For this reason, health care and biotechnology are traditionally well-represented in venture capital investments. Large incidental investments in specific sectors can, however, lead to large yearly shifts in venture capital as well as private equity.
By examining the regional distribution of investments, it can be seen that investments concentrate in specific regions. This is partly explained by the fact that certain regions house more head offices (only head offices are registered) and that not all company locations are known, but it does not fully explain this. This is the reason why the regional funds play such an important role. Because the developments can fluctuate considerably from year to year, an average is shown.