(Editor’s note: In the editing process, Eindhoven economic-development leader Fancy van de Vorst was inadvertently omitted from the post. That mistake has been corrected. Also, Bambi Medical was founded by Dutch entrepreneurs, not a team of Italian entrepreneurs as previously reported.)
There’s a great scene in the otherwise overwrought “Jobs” biopic (above) where young venture capitalist Mike Markkula pulls up in his Corvette and offers $90,000 (1977 dollars) in initial funding for Apple Computers while it’s still in Steve Jobs’ garage. That really happened. And that could never happen in Europe.
Because while Europe has lots of Steve Jobs, it has very few Mike Markkulas.
In the United States, there’s too much capital chasing too few great ideas, so everything down to the virtual lemonade stand app gets funded. In Europe, the technical talent is stunning, but there’s a huge void where early-stage investment should be. So nothing gets funded except by big corporations looking for the new new thing.
In the nine months since we founded Dispatches Europe, our expat-focused media company, in Eindhoven, Netherlands, we’ve talked with local entrepreneurs, investors and economic-development officials and they all agree on one point: Angel funding simply doesn’t exist here in any meaningful way.
But we have a plan we’re putting into play during the first quarter of 2017.
Our first initiative will be to bring American investors to Eindhoven, the low-profile, ultra-high tech capital of the world.
Dispatches already is working with Dutch startup officials to bring American VCs and angels to the Netherlands from the Midwest and South – starting with Eindhoven – to fill the funding gap. Later, we’ll take Dutch startups to Midwest cites such as Columbus, Cincinnati and Louisville for demo days.
I’ll be in the U.S. from 12 January to 26 January for meetings with potential investors. If you’re interested in the concept, email me at: [email protected]. Then I’ll report back to economic development officials in Eindhoven and The Hague.
Why the Midwest/South and Eindhoven?
Obscured by the tech world’s fixation with The Valley, Boston and Austin is the fact there is a lot of under-deployed capital in cities such as Louisville, Nashville, Columbus and Cincinnati, which are all within a few hours of one another.
We know from creating our first pure-play digital media company in Louisville that angel investors in these cities typically don’t see the sort of world-class talent there is here in Eindhoven.
Eindhoven is a Silicon Valley-level destination for Europe’s top technical talent.
There are already 37,000 knowledge migrants such as engineers and physicists here. Eindhoven economic-development officials want to double the number of internationals to 80,000 from 40,000 during the next three-to-five years.
That 80,000 goal is basically the projected skills gap derived from the student population in the Netherlands, the number of people retiring and estimated job growth and talent requirement for companies.
Eindhoven is unique in that it has four innovation pillars bringing in the smartest people in the world – ASML, Technical University Eindhoven, NXP and Philips. As we’ve seen at startup events, a significant portion of those people are perfecting high-tech products outside of work.
And that’s who we want you to meet.
Later, we want to facilitate the creation of Tech Sister Cities that would link, say, Eindhoven and Louisville, the medtech-focused cities of Nashville and Groningen and the established capital centers of Columbus and Amsterdam.
Our plan has potential risks and rewards for both sides of the Atlantic. But it also has the potential to bolster both regions’ profiles as innovation centers. The goal, of course, is to get as much publicity for this effort as possible.
Here’s what we mean:
The truth is, until Europe can get more early stage capital, it will be an R&D lab for American companies.
American tech giants with billions in cash-on-hand on their balance sheets go shopping regularly for Europe’s most innovative companies, from Skype to NXP. More than 40 percent of venture-back European startups were acquired by American companies in 2015, though that trend has moderated lately. Still, American companies alone make as many acquisitions (122) of European companies as the next four most prolific countries combined — Germany (40), the UK (33), France (30), and Spain (19), according to Tech.eu.
Due to conservative cultures, centuries of war and economic turmoil, risk tolerance has been bred out of Europeans. Some might argue the European startup and innovation system and the American system are just different … that one’s not superior to the other.
In the Netherlands, for example, the Dutch government gives out SME subsidies and funds incubators and accelerators. In the U.S., outside the Department of Defense and Central Intelligence Agency, all early stage investment comes from the private sector, and incubators and accelerators typically are run by capital firms, local economic development authorities or universities.
Well, in Europe, the ambitious, unconventional and unorthodox don’t get money. Which is why there are no European Facebooks, Amazons or Googles.
We want to change that, starting with Eindhoven
Why Eindhoven? After months here, we know there are few places with a comparable concentration of talent.
The Netherlands is home to some of the smartest companies in the world. Eindhoven, where Dispatches is based, has some of the most sophisticated firms in the high-tech hardware and medtech categories. But it’s all because of a 115-year-old company: Philips.
Philips is the General Electric of Europe, a company that started out making lightbulbs, morphing into a global lighting and consumer electronics conglomerate. Founded in Eindhoven and now headquartered in Amsterdam, the company provided the capital and talent that helped launch several current high-tech sector leaders here including ASML, which dominates photolithography, and Shapeways, a leader in 3D printing now headquartered – you guessed it – in the United States, because they couldn’t get A-round investment in the Netherlands.
And that’s where the U.S. and Europe diverge … capital. If Philips hadn’t been there, it’s likely neither ASML nor Shapeways would have ever happened. Now, Philips is a shadow of the dominant consumer electronics company it was as recently as the 1990s, when it created the CD and CD player, down from seven divisions to one after recently spinning off lighting.
The irony is that in a city such as Eindhoven, which has more tech and engineering talent than any other city in the world, there are just a handful of angel investors. We read a lot about government officials signing blue-sky proclamations. We rarely read about serial startup investors willing to put actual skin in the game.
That said, there is more and more foreign direct investment here. BUT, that capital generally goes to established companies, not startups.
The players in Eindhoven
(Editor’s note: This section will be updated with new people, companies and organizations.)
Additive Industries : AI is a cutting-edge 3D printing firm developing technology for the aircraft industry. Last year, Additive Industries received a major contract from Airbus for a Beta version of a new 3D printer.
Amber Mobility: This is a new “mobility as a service” startup that will offer access to a car when and where you need it. Think Uber without the driver. “The freedom to go everywhere. The freedom to not own a car.” This is one of the rare consumer-facing startups coming out of Eindhoven.
ASML: As we stated above, ASML is the global leader in photolithography. But ASML’s biggest contribution to Eindhoven’s tech eco-system is the network of high-tech suppliers that have coalesced around it.
Bambi Medical: A recent graduate of HighTechXL accelerator, this mostly Dutch team of entrepreneurs has created technology allowing doctors to monitor infant vital signs without using needles or adhesive electrodes, eliminating all discomfort.
Brainport Development: Brainport Development is the regional economic-development effort, working with representatives from industry, universities and government.
Sjaak Deckers: Sjaak Deckers sold his deep brain stimulation technologies startup Sapiens to Medtronic in 2014 for $200 million. Now he’s raising $150 million for his Dutch/Swiss startup G-Therapeutics, which is developing an implant that allows paralyzed people to walk.
The Dutch Mountains: Eindhoven already has one of the largest high-tech campuses in Europe. Now, a new group of developers is planning “Dutch Mountains,” an ambitious plan to create the next-generation smart work and living space, focused on the Internet of Things. A development group includes 7 partners: AAFM / Asito, BLOC, Dell Technologies, Honeywell, SPIE Netherlands, SMV and Urban XChange. Arup, TU Eindhoven, the Foundation for Smart Building and Twice Eindhoven are the knowledge partners. The project was initiated by Brainport Development.
Guus Frericks: Guus Frericks is founder and CEO of the HighTechXL startup accelerator and the major force behind Eindhoven’s push into hardware startups. He’s been advocating a higher profile for Eindhoven for years. Now, Frericks is taking tangible steps to get the world to sit up and pay attention. Dispatches is part of that effort.
G-Therapeutics: This is Sjaak Decker’s new effort in partnership with Swiss researchers. The new approach to spinal-cord injuries uses an implantable neuro-stimulation system for the spinal cord with real-time motion feedback, and intent-driven rehabilitation. The system gives patients the ability to walk again by delivering electrical pulses to the correct nerves at the appropriate time, letting paralyzed patients raise and lower their legs and feet.
Health Innovation Campus: HIC is part of Brainport. Máxima Medical Center, together with partnersPhilips Healthcare and TU/e, are part of the health-care/medtech campus.
High Tech Campus Eindhoven: The High Tech Campus is a large Silicon Valley-style campus with an R&D ecosystem of more than 140 companies and 10,000 researchers, developers and entrepreneurs. The campus was founded by Philips Research, and all the world’s largest advanced tech firms are there including IBM, Intel and Medtronic. Shimano just moved its European headquarters to HTC.
HighTechXL: is Eindhoven’s hardware accelerator, helping startups progress from idea to prototype to scale-up by connecting them to a top-tier community of entrepreneurs, corporates, and investors. HighTechXL has offices at the High Tech Campus.
Holst Centre is an independent R&D center that develops technologies for wireless autonomous sensor technologies and flexible electronics.
Ioniqua Technologies: This spinoff from Technical University Eindhoven invented a cost-effective way to depolymerize PET polyester waste to their original raw materials so it’s reused, not burned in incinerators as trash.
Betsy Lindsey: Managing Director, Investor Relations at HighTechXL. Before becoming an expat, the Seattle native was at Silicon Valley Bank helping startups and later-stage companies obtain venture investment and debt financing.
Maxima Medical Centre at the Health Innovation Campus develops startups in the health-care sector MMC Incubator. MMC Incubator offers space for 30 startups. The building is linked to the hospital, near the training center MMC Academy.
Medical Robotic Technologies: TU/e professor and entrepreneur Maarten Steinbuch leads a team of engineers who’ve developed robotic AI technology to sense and remove the tremors and enables surgeons to do far more precise surgery.
NanoLabNL: TU/e has one of four national nanotechnology labs supporting long-term and short-term research.
NXP Semiconductors: This chipmaker, which began as Philips Semiconductor, was recently acquired by San Diego-based Qualcomm for $47 billion. NXP makes chips chiefly for the auto industry. NXP has 44,000 employees in more than 35 countries and posted total revenue of $6.1 billion for 2015.
Preceyes: is a medical robotics company focused (so to speak) on ocular surgery. Preceyes technology supports surgeons in performing high-precision procedures, including high-precision drug delivery. Last year, Preceyes tech allowed surgeons to operate inside the eye and restore sight … a world first. Preceyes is a spin-off of TU/e, located at the new TU/e Science Park.
Maarten Steinbuch: is one of the most versatile and connected people in the Eindhoven scene. Formally, Maarten is distinguished professor in Systems- and Control at TU/e. But there’s so much more to his story. He’s also CEO of Medical Robotic Technologies which includes Preceyes, the medical robotics company. His son Yuri developed the STORM Wave electric motorcycle project, riding the machine around the world last summer to prove its practicality.
Technical University Eindhoven: TU/e, along with ASML and Philips, is why Eindhoven is so talent-rich. One of the gee-whiz products just now coming out of TU/e is research on a luminescent solar concentrator that works like a leaf, using sunlight to produce chemicals. But instead of only chlorophyll, the leaf could produce any medicine anywhere. Graduates and professors, such as Maarten Steinbuch, are constantly creating new high-tech startups. Victor Donker and Benjamin Tchang with Usono are TU/e graduates.
TNO: The Netherlands Organisation for Applied Scientific Research is the largest non-profit research company in the Netherlands. It has research facilities at the TU/e campus and the Automotive campus in Eindhoven.
Usono: recently graduated from the HighTechXL accelerator. Founded as Medacc by Benjamin Tchang, Victor Donker and Jori Verbeek, the three changed the name to stress the importance of freeing ultrasound medical testing from current limitations. In its brief existence (about 1 year) Usono has gotten commitments from six Dutch hospitals to use/test Usono’s new advanced sonogram-based products as they come on the market in multiple iterations.
Fancy van de Vorst: Fancy van de Vorst is an economic-development executive with both the City of Eindhoven and StartupDelta, the Netherland’s overall startup effort. She has connections to all facets of the local and national startup ecosystem and is one of the people you must know here.
Peter T.F.M. Wennink: is CEO of ASML. And ASML is Eindhoven’s most advanced business, making the equipment that makes the digital world possible, from computers to smartphones. Early in 2016, analysts for Wall Street ratings agency Fitch stated ASML has claimed at least an 80-percent market share of photolithography revenues.
Bert-Jan Woertman: Bert-Jan Woertman is Marketing & Communications manager for High Tech Campus, and one of the most visible startup players.