What are the consequences of the Corona virus for startups in the Dutch ecosystem? To get insights, TechLeap.nl conducted a survey with over 445 startup participants (8% of the total startup population) and a material number of investors.
The impact of COVID-19 on startups is clear, 50% of startups have lost significant revenue and are expected to run out of money in the coming 3 months. Most founders indicate the need for short term (1-3 months) bridge funding with the amount needed most ranging from €100,000 to €400,000.
While support measures are being developed by many countries, including The Netherlands, currently the support measures do not provide the required funding and support:
1. There is a need for short term bridge funding, helping companies with working capital to survive the atypical market situation that was caused by the COVID-19 outbreak
2. VC investments are slowing down and 27% of startups need structural funding. There’s a need for new measures that incentivise new capital to be invested.
Techleap director Nils Beers: "We are working on an arrangement to help companies in acute financial distress. Including companies whose turnover has collapsed, and companies that suddenly cannot attract new investment. Many companies now face both problems at the same time.”
Additonal support measures
This research shows that startups face specific challenges from COVID-19. Therefor, Techleap.nl uses the inventory to think along with the ministries, Invest-Nl, Regional economic development agencies and other parties in the ecosystem about which emergency measures are needed for startups and scaleups to overcome their challenges in these hard times. The highest priority is a short term bridge funding, to ensure the liquidity of companies until the beginning of July.
Read the article in FD for more information (in Dutch)
Read the TechLeap Report