The number of new tech startups in the Netherlands fell for the second consecutive year in 2025, while the country's AI sector continues to struggle to convert its world-class talent into globally competitive companies, according to a new report on the state of Dutch tech.
The annual State of Dutch Tech report, published by lobby group Techleap in collaboration with TNO and Invest-NL, shows that just 117 new startups were established last year, down from 188 in 2023, a decline of 38 percent over two years. The report defines startups as companies that have raised more than €100,000 in funding.
"In brief: six years of State of Dutch Tech reveals a picture of stagnation and limited growth, which we can no longer afford," said Prince Constantijn, Techleap's special envoy for the tech sector.
Strong foundations, weak scaling
The Dutch tech ecosystem is not without strengths. With 11,301 verified tech companies and €2.64 billion in venture capital deployed in 2025, an increase of 11 percent on the previous year, the Netherlands has built one of Europe's more concentrated ecosystems. Per capita, the country ranks fourth in Europe for tech investment, ahead of both France and Germany.
However, the report identifies a critical weakness in converting startups into larger scale-ups. Only 21.6 percent of Dutch startups reach scale-up status, defined as raising more than €10 million in funding. This trails the European average of 24.1 percent and is less than half the US rate, where 52.2 percent of funded startups achieve scale-up status.
"The Dutch ecosystem has what it takes to compete internationally at the top level, but then we must address all aspects," Prince Constantijn said.
The AI paradox
The report highlights a striking paradox in the Netherlands' AI sector. Despite having Europe's highest density of AI talent, with 10.9 AI professionals per 10,000 inhabitants, the country's conversion rate to scale-up status for AI companies stands at just 21.2 percent, roughly a quarter of the US rate of 80.9 percent.
AI companies received 27 percent of all venture capital invested in the Netherlands last year, below the European average of 32 percent and far behind the United States, where 60 percent of venture capital flows to AI. Around three-quarters of Dutch AI funding came from abroad, primarily from the US.
"The Netherlands receives only a fraction of the investments flowing into London, Paris, and Berlin," the report states. Growing companies face particular difficulty securing funding.
Prince Constantijn suggested that job security plays a role in the talent gap. "Starting a startup or working at one offers many opportunities, but also brings risks," he told the Financieele Dagblad. Most Dutch AI specialists opt for secure positions at large established firms rather than taking the risk of joining or founding startups.
Deeptech bright spot
The report identifies deeptech as a relative success story within the Dutch ecosystem. Deeptech companies, which focus on capital-intensive technologies such as semiconductors, photonics, and quantum computing, comprise just 12 percent of the ecosystem but deliver 41 percent of all scale-ups, with a scale-up ratio of 39 percent, more than twice the rate of non-deeptech companies.
Deeptech also attracted 41 percent of all venture capital in 2025, well above the European average, reflecting the Netherlands' strong position in areas like chip manufacturing and precision technology.
Diversity deficit
The report also highlights persistent diversity challenges. Companies with female co-founders make up just 8 percent of all Dutch scale-ups. While that number is growing at 22 percent per year, the Netherlands still trails the United Kingdom at 13 percent and Germany at 11 percent.
In Series A and later funding rounds, all-male teams have twice the chance of securing investment compared to mixed or female-led teams.
"That is still shamefully low," Prince Constantijn said. "Companies make technology for all of society. That cannot be done only by white men."
Policy response
The new coalition agreement contains measures aimed at boosting the domestic tech sector, including a multi-billion-euro national investment fund. There are also EU plans to create a "European Incorporated Company" structure that would make it easier for startups to operate across multiple member states.
Prince Constantijn welcomed the increased sense of urgency but expressed frustration at the pace of change. "Many things should have been done earlier," he said. "The ruling on share participations will be here in 2027 and that is 10 years too late."
The share participation issue is significant because startups often lack the resources to pay high salaries but can offer equity to attract talent. Unfavourable tax treatment of employee share schemes has long been cited as a barrier to competing with US firms for top talent.
