Sustained fund raises by Belgian VCs and a continued inflow of foreign capital is a cause for optimism.
According to the respondents of the Syndicate One survey, around 49 per cent indicated one of their funding rounds was participated in by business angels, and another 34 per cent by ‘friends & family’. Consequently, a significant portion of capital in the early start-up stages is provided by non-institutional investors.
Consistent with the prevalence of early-stage investment within the Belgian Tech ecosystem, there has been a notable increase in the number and activity of business angels on the one hand, and accelerators/incubators on the other hand, albeit both more pronounced in Flanders and Brussels compared to the Wallonia region.
The report really celebrates the fact that Belgium is seeing an unmistakable rise in value-adding angel investors, incubators, accelerators, startup studios, physical hubs, industry events, network initiatives, support programs, sector-specific communities, ambassadors, and more.
Early-stage funding drives Belgian tech growth
Dealroom data indicates that capital invested per round have steadily increased in the period 2018 to 2024 to date, with tripling at seed stage and more than doubling at Series A stage.
According to Olivier Rousseaux, Director of Venture Development, Imec:
“When we first ventured into the deep tech scene in Belgium, the funding landscape was extremely limited. Raising just €1-3 million for a seed round was the norm, far below what was needed for success.
Today, we’re seeing a significant shift, with seed rounds now attracting €10-15 million, which is a crucial step towards building successful deep tech ventures.”
However while experiencing unmistakable growth, the Belgian Tech ecosystem is still firmly in its early maturation phase. Over the last six years, early-stage financing rounds accounted for around 77 per cent of capital raised by Belgian tech start-ups, compared to 42 per cent in Europe over the same period.
Talent shortages and ESOPs limit Belgian founders
The startup founder survey reveals that Talent and ESOP schemes are the main pain points of Belgian founders: both have a negative impact on founders’ ability to scale their business and the latter limits the reinvestment power of opera- tors in successful start-ups.
All startups need experienced staff to grow and scale, especially who’ve done it before. The rport highlights a shortage of local serial entrpreneurs and staff personnel with vital experience scaling a company.
Further, attracting senior talent abroad is necessary, confirms Adrien Roose, CEO and co-founder of Cowboy. Whilst Belgium has a high standard of living and a strategic location, it’s is not always the first choice destination of foreign talent:
“For our CMO and CFO roles, we were able to secure great candidates from overseas who believed in our proposition and flexible working; they spend a lot of time in Belgium but haven’t relocated.”
“Brussels is often seen as a second-tier city by international talent when compared to London, Paris or Berlin, increasing the difficulty to convince people to relocate.”
ESOPs (Employee Stock Ownership Plans) generally give employees the right to purchase company stock at a predetermined strike price after a certain period of time, which aims to foster a culture of ownership and enhanced engagement as employees share in the company’s success, and provide significant financial benefits for both employees and employers.
The current social and fiscal approach in Belgium increases the risk for employees and companies and the administrative regulation puts Belgian companies at a disadvantage.The significant challenges for the implementation of ESOPs were raised by many entrepreneurs and investors interviewed for this report.
Willem Delbare, CTO & founder, Aikido shared:
“The current system is suboptimal, with a lot of elements creating friction: short exercise windows, uncertainty at the moment of exit, limited information, upfront payment which can force people to take loans, … it’s a lose-lose-lose.
While having employees benefit from company growth, results in more people reinvesting in the ecosystem, creating an additional growth driver.”
Accoring to Laurens De Poorter, Founder of Syndicate One:
“Pushing the Belgian tech ecosystem further to the next level is Syndicate One’s raison d’être. Besides strengthening the connective tissue in our ecosystem by uniting existing players and investing in new ones, we provide tools for anyone who aims to improve it.
We believe this report can be a map of the ecosystem for entrepreneurs, investors and policymakers to make better, more informed decisions. We are honored to partner with Sofina and Bain & Company to present it to you.”
Overall, the report provides valuable data-driven and first-hand personal insights into the Belgian tech ecosystem.
While smaller start-up and investment ecosystems, including Belgium’s, require more time, forward-looking policymaking, exits, increased media attention and other elements to reach the next level, there is a growing appetite in startup investment from business angels, incubators, accelerators and early-stage VC funds alike, along with deepened and broadened access to government subsidies and other types of support.
By strengthening the support structures neccessary , Belgium can further solidify its position as a thriving tech hub in Europe.
Download the report today.
Lead image: Yaroslav Danylchenko.
Source link : https://tech.eu/2024/10/09/belgiums-tech-ecosystem-maturing-key-findings-from-the-2024-state-of-belgian-tech-report/
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Publish date : 2024-10-09 07:19:00
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