Brussels is in the news for all the wrong reasons, but the threat of terrorism and total lack of public transportation shouldn’t delude anyone into thinking there isn’t a a lot of innovation transmitting through the city. Since last year, the country’s startup ecosystem has exploded — in the good way. In 2014, 525 startups were founded, the biggest year yet for the country.
And who is the master of that information? Why Omar Mohout of course. Mohout recently updated his Belgian Startup Landscape map and analytics database, called Sirris.
The updated map is impressive, especially since it purports to cover only 40% of the local scene. Zooming in on pin-heavy locations will find you the popular incubators and tech centers across the country, such as ICAB, EEBIC, and BLSI in Brussels. Specifying data by industry is also telling, showing a massive concentration of adtech companies in Ghent, for example.
“There were two peaks: 2010, the year that anyone could launch a web- or app startup; 2014, the year that the number of accelerators and support programs exploded in Belgium,” Omar Mohout, the compiler of Sirris, tells Geektime. “There’s no excuse anymore not to launch a startup.”
Mohout says The Social Network‘s release five years ago was actually a big motivator in the country. In 2014, co-working, mentoring, and grants proliferated.
A solid majority of 53% of startup activity is in the Flemish-speaking Flanders region (Flemish is a dialect of Dutch, but you didn’t know that so we had to go all explanatory), followed by Brussels at 28% and French-speaking Wallonia at 19 percent. The top city list is predictably led by bahn-nope Brussels followed by Gent, Antwerp, Leuven, and then Liège.
While Brussels isn’t Europe’s economic capital by any means, it holds slightly more than a quarter of the country’s startups even though a mere 11% of the country’s overall economic activity takes place there, according to Mohout. The wealthier Flanders region (61% of all economic activity; 53% of startups) easily overtakes the capital and Francophone Wallonia.
Forget Brussels – Antwerp’s got this
The analytics part of the database is sophisticated, tagging companies as startups, scaleups, acquisitions or “deadpools” (not the murderous, entertaining, mutated kind, but the not-so-active-anymore kind). The combination of startups and scaleups gives each city its power ranking.
Mohout tell us that, “Ghent has a more mature ecosystem compared to Antwerp. Ghent has a strong adtech cluster: It is the city where Netlog got launched, the Facebook of its time that had 100 million users at its peak. Also Engagor and Showpad, two trending Belgian startups, are from this city as is the popular dating-site Twoo and the only Belgian unicorn we’ve had: Tele Atlas (acquired by TomTom).”
Other cities are becoming hubs for certain verticals. Leuven is big on healthtech and manufacturing while Brussels has taken over on Belgian fintech and HRtech. Antwerp has picked up steam thanks to a number of government initiatives. The new Startup Village, an initiative to buy from local SMEs and divvy out resources to the city’s accelerators turned the city around in a matter of 18 months, according to Mohout. Antwerp’s IT department, Digipolis, has promoted buying from startups and actively sought out tech from local companies. Two other local projects include City of Things and Innovation Boulevard.
It’s the only Belgian city with a “Startup Manager” he says, and the city whose mayor grabbed the “Startup Policy Leadership Award” last week from Startup Nation at the Global Entrepreneurship Network Summit in Mexico.
The national government has also stepped up, providing various innovation grants, funding for accelerators, and tax incentives. Even the VCs receive government investments, such as PMV, Hummingbird Ventures, Arkimedes, LRM, Capricorn, and GIMV.
Beyond waffles: Belgians need to internationalize
Mohout says the average seed round is actually pretty large and growing: from €2.2 million in 2014 to €3 million in 2015, impressive for a country where only 11% of the startups have representation outside the country. That number is down from the 31% who did the last time we reported on Sirris, but that is explained by the explosive number of new companies who haven’t scaled yet. Most VC deals, 63%, were from Belgian investors.
“In other words, despite the fact that we have a similar number of startups like the Netherlands, Paris, London, and Berlin, the number of scaleups is significantly lower in Belgium,” Mohout summarizes. But the explosive 2014 is carrying over well. Grabbing a total of €100 million in venture capital in 2014, that number has rocketed to €212 million so far this year. That includes huge rounds from miDiagnostics (€60 million), Collibra (€20.5 million) and Take Eat Easy (€10 million).
Mohout also notes that, “The number of startups going public is low. Materialise [finally] went in 2014 to NASDAQ. It had been 17 years since a Belgian tech company had done an IPO on NASDAQ (Icos Vision).”
“Compare that to the number of NASDAQ listings from Netherlands (10 companies) and Israel (63 companies). That is simply a shame,” he adds.
The government has stepped up. There are now assorted innovation grants, funding for accelerators and a number of tax incentives. Even the VCs are receiving government investments, such as PMV, Hummingbird Ventures, Arkimedes, LRM, Capricorn and GIMV.
Mohout is optimistic about the country’s prospects, as he knows exactly what problems Brussels will have to tackle to make sure it keeps its startup surge going.
“There is enough talent in Belgium. The country has a highly educated population and there is enough (risk-averse) capital available (€300 billion is locked in savings accounts). But, international scaling experience is limited as is the amount of venture capital that flows to startups.”