The inaugural State of Belgian Tech Report 2024, produced through a collaboration between Syndicate One, Bain & Company, and Sofina, offers an insightful overview of Belgium’s burgeoning technology startup and investment ecosystem. The report, based on data analysis, founder surveys, and interviews with key entrepreneurs and investors, paints a promising picture of Belgium’s startup scene while identifying critical areas for improvement.
Belgium’s tech ecosystem appears poised for significant growth in 2024, as investment into the country’s tech startups in the first half of the year is set to surpass €500 million, nearing the total of €424 million for all of 2023. This signals a potentially record-breaking year for Belgian tech, highlighting the increasing investor confidence in the region.
Notably, AI-driven companies have been the biggest beneficiaries, attracting more than 70% of the capital invested in the first half of 2024. This strong focus on AI reflects global trends and showcases Belgium’s capacity to innovate within cutting-edge technologies.
Belgium has also seen the rise of four unicorns—team.blue, Collibra, Odoo, and Deliverec which are contributing to the maturing of the local ecosystem. These billion-dollar companies provide skills, jobs, and services to the local economy and help foster the next generation of startups. Exit activity has also steadily increased, with 22 exits recorded in the first half of 2024, up from 36 in 2023 and just 13 in 2018.
Belgium’s venture capital (VC) landscape has shown strong growth, with Belgian VCs raising over €200 million in the first half of 2024, on track to surpass the €400 million mark by the end of the year. This signals increasing VC interest in the country’s tech sector, as well as an uptick in the number of funds being raised. Eight new funds were created in the first half of 2024, compared to just two in 2018, underscoring the expanding pool of capital available to early-stage startups.
A key trend within the Belgian ecosystem is the significant role played by business angels and non-institutional investors. Around 49% of surveyed startups reported that business angels participated in their funding rounds, while 34% relied on family and friends. This suggests a strong foundation of early-stage investment that complements traditional VC funding.
While the report highlights many positive developments, it also identifies pressing challenges facing Belgian startups. Talent shortages and Employee Stock Ownership Plans (ESOPs) are the primary pain points for founders, negatively impacting their ability to scale.
Belgium lacks a large pool of experienced serial entrepreneurs and scaling professionals, making it difficult for startups to access the talent they need. Additionally, Belgium’s position as a second-tier city compared to European hubs like London, Paris, and Berlin complicates efforts to attract senior international talent.
The current ESOP framework in Belgium is also problematic. Entrepreneurs cited administrative hurdles and financial risks as barriers to implementing effective ESOPs, which are crucial for fostering a culture of ownership and reinvesting in the ecosystem. The limited exercise windows, uncertainty around exits, and upfront payments required by ESOP schemes discourage employees from fully benefiting from company growth.
Despite these challenges, early-stage funding has been a major driver of growth in the Belgian tech sector. Data from Dealroom shows that capital invested in early-stage rounds has tripled since 2018, particularly in seed rounds, which now attract €10-15 million, compared to just €1-3 million a few years ago. This significant shift highlights the growing ambition of Belgian deep tech startups and their increasing ability to secure the funding necessary for success.
The State of Belgian Tech Report paints an optimistic picture of a tech ecosystem in the early stages of maturation but with the potential to become a European hub. With the support of business angels, incubators, accelerators, and early-stage VC funds, Belgium is making strides toward a sustainable and vibrant tech ecosystem.
Laurens De Poorter, founder of Syndicate One, emphasized the importance of continued efforts to strengthen Belgium’s tech ecosystem, saying: “Pushing the Belgian tech ecosystem further to the next level is Syndicate One’s raison d’être. We provide tools for entrepreneurs, investors, and policymakers to make informed decisions and build a more connected ecosystem.”
By addressing key challenges such as talent shortages and reforming ESOP regulations, Belgium can continue on its path to becoming a leading tech hub in Europe. The report calls for forward-looking policymaking, a stronger support structure, and more exits to solidify Belgium’s position in the global tech landscape.
In conclusion, while Belgium’s tech ecosystem still has room to grow, the 2024 report provides clear evidence of progress and a roadmap for future development. With sustained investment and improvements in the regulatory environment, Belgium could become a powerhouse of European innovation.