€ 100 Million Announced as Bridging Funding for Dutch Startups and Scaleups
Because of COVID-19 impact on businesses, the Dutch government takes additional measures to support entrepreneurs in the Netherlands
As of the 29th of April 2020 companies can apply for a special bridging loan, the so-called Corona-Oververbruggingslening (COL), via an online portal built by Techleap.nl, Regional Development Organisations (ROMs) and Invest-NL.
This bridging loan program was announced by the government earlier this month to the amount of EUR 100 million for all non-bank funded companies: startups, scaleups and innovative SMEs by the government. The COL was developed by the Ministry of Economic Affairs and Climate Policy, in close cooperation with Techleap.nl, the ROMs and Invest-NL. This scheme is executed by the ROMs at the request of the government.
Invest-NL doubles the available support by allocating another € 100 million
Besides the € 100 million available thorugh the COL, Invest-NL is allocating €100 million to the Temporary Bridging Loan Program for innovative Start-ups and Scaleups (TOPSS). This program has been set up in recent weeks in close cooperation with Techleap.nl and the Regional Development Agencies (ROMs).
With the €100 million for TOPSS, Invest-NL wants to ensure the availability of venture capital for innovative high-potential startups and scaleups impacted by the Covid-19 crisis. Funding from TOPSS is aimed at continuing activities in anticipation of a long period in which fundraising will be difficult. TOPSS offers funding from €2 million with the involvement of professional investors and applications can be made via the same online portal as fo rthe COL.
In principle, Invest-NL finances up to 50% of the financing round. Financing is provided in the form of a convertible loan. Invest-NL applies specifically for applications under TOPSS an accelerated investment process of 3-5 weeks. Propositions with social impact are given priority. For that, Invest-NL looks at FTE (number of jobs related to the investment, CO2 (reduction as a result of R&D investment) and R&D (expenditure on R&D, patents, etc.).
A helping hand from regional development agencies
Startups and scaleups usually have no banking relationship yet. For this reason, the regional development agencies play an important role in providing the announced credits. The bridge funding for startups and scaleups is expressly intended as an emergency tool to ensure a temporary bridge to break-even or to a follow-up investment round. In the coming weeks, more information on criteria and application procedure will be shared.
Bridge funding against financial distress
A recent survey of TechLeap.nl showed that 80% of Dutch startups expect to get into financial difficulties due to the COVID-19 crisis. 67% are looking for bridging financing due to liquidity problems. Dutch regional development agencies are annually involved in about half of the early investments in innovative companies. Therefore, the regional agencies are by far the most active investors in the Netherlands. An in-depth analysis of the investment portfolio of the regional agencies shows that a large proportion will be in acute financial distress in the upcoming period.
Nils Beers, CEO Techleap.nl: “With this first confirmation of a broader approach, the government shows it is taking startups and scaleups struggles seriously.”
Extensive measures for Dutch businesses
The Dutch government already announced measures to help businesses that have been affected by the COVID-19 crisis. However, startups, scaleups and other innovative companies were initially partly outside the arrangements. Though this category of entrepreneurs is crucial for the innovative strength of the Netherlands. The Dutch government now makes it possible for these startup companies to apply for a bridging fund.
Please find an overview of key websites that provide up-to-date information and guidance on COVID-19 related matters in the Netherlands here.
The Invest in Holland Network stands ready to help
The Netherlands Foreign Investment Agency (NFIA) extensively works together with several large cities and the regional development agencies in the Invest in Holland Network to support foreign companies in the Netherlands. In addition to that, regional development agencies stimulate innovation among SMEs in their region. By boosting partnerships between entrepreneurs, knowledge institutions and governments, the regional development agencies can strengthen the ecosystem. Together the Invest in Holland networks provides free and confidential assistance.
Source: Techleap.nl9 April 2020