The State of the Rotterdam Tech Industry
Monday April 3, 2023
Ten years ago, Microsoft was the only tech company ranked among the world’s five largest companies by market capitalisation. Today, Apple, Amazon, Alphabet (Google), and Facebook have leapt past all non-tech giants to join Microsoft in the top-five list of the largest companies in the world.
In Europe, total capital invested in tech companies exceeded €100 billion in 2022, up from less than €30 billion in 2017. This amount represents an increase of over 230% in the last five years. However, that number has fallen by 17.5% by the first half of 2022. Investments not only by the usual suspects have increased; the number of unique corporate investors and investments in tech companies by non-tech firms have increased between four- and fivefold since 2013. In 2021, Europe saw 105 companies reach the billion-dollar milestone, over two times more than the previous record-breaking year.
The UK, France and Germany account for almost two-thirds of VC funds raised in Europe. Given that their capitals, London, Paris and Berlin, have long enjoyed a reputation as hubs for tech and innovation, this is no surprise. However, the growth of smaller hubs like Amsterdam, Rotterdam, Dublin, Copenhagen, or Madrid denotes an increasingly diversified landscape.
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London and Paris are not just leaders in (venture) capital investment but also the number of startups and software developers. This point indicates the necessary ingredients of a thriving tech hub: talent, entrepreneurship and investment.
Talent is a critical factor influencing founders’ choice of location. The World Economic Forum found that by 2020, the most sought-after profiles included data analysts, AI specialists, software developers, and digital transformation specialists. While in today’s war for talent, cities can (and should) become magnets to attract talent from other regions, they should not forget to adapt their knowledge institutions and equip their younger generations with the necessary tools to be competitive in the near future.
The first pillar, therefore, is talent and education. The second pillar, entrepreneurship, encompasses the network of people, organisations and spaces that foster idea generation and knowledge exchange around innovative and commercial topics. Founders rely not only on their own ideas and mindset, but also on their connections and access to resources (from accelerator programs and workspaces to partners and investors). The third pillar, investment, is needed to scale ideas into companies successfully. Without risk-taking investors who understand and believe in unique innovations, these companies will struggle to level with venture-backed competitors, whether local or foreign.
Rotterdam’s tech scene is gaining momentum too, and the city appears well-equipped across all three pillars. With access to talent from two state-of-the-art universities, an increasing number of startups and startup-focused events and initiatives, and a growing number of success stories attracting capital funds, it feels intuitive to frame Rotterdam as an up-and-coming tech hub. Yet, much of this momentum is judged purely on subjective impressions; there is still no clear overview or measurement of the state of tech in Rotterdam.
The Rotterdam Tech Report is the second documentation of Rotterdam’s complete tech ecosystem. The report places Rotterdam in the context of Europe’s tech scene by assessing the pillars of education, entrepreneurship, and investment.
The aim of the report is to serve as a baseline measurement against which to track future progress and development of Rotterdam’s tech scene. As such, this is the second edition of a recurring report on the state of tech in Rotterdam. However, the sources and methodology used for this report were different from the first edition in 2018, which means the two should not be compared at face value. Nevertheless, the report will provide a thorough overview of the tech startup industry in Rotterdam.
The report’s structure includes four main chapters: Tech Education, Tech Companies, Tech Employment, and Tech Investment.
In terms of geographical scope, the report focuses on the Greater Rotterdam region (“Stadsregio Rotterdam”), including the Hague and Delft. Specifically, companies were found in Rotterdam, Delft, Wassenaar, Vlaardingen, Capelle aan Den IJssel, Rijswijk, Zoetermeer, Schiedam, Ridderkerk, Barendrecht, Maassluis.
Technical degrees comprise science, technology, engineering and mathematics (STEM). Of the 19,000+ students in Rotterdam, namely Erasmus University, in 2021/22 at the University level, 27% were following a STEM course. 
Specifically, 5,319 students enrolled in a STEM degree in Rotterdam in 2022. Technology and industry degrees accounted for 19% of these diplomas, health-related degrees accounted for 51%, and natural science, mathematics, and computer science accounted for 28%. 
With the inclusion of students from the Delft University of Technology, the percentage of students enrolled in STEM courses rises to 68%, with the number of students increasing to 47,000+ per year. As such, TU Delft accounts for 83% of tech talent in Rotterdam and Delft combined. This percentage points to the importance of Delft as a significant source of tech talent.
The four major knowledge institutions at University and Hogeschool level are TU Delft, Hogeschool Rotterdam, Erasmus University and Inholland Hogeschool. While TU Delft is almost focused exclusively on STEM programmes, Erasmus only has two schools, the medical faculty and the University College, which offers majors in STEM, among others. Since Erasmus is the only university (WO-level) in Rotterdam, this underlines the dependency on Delft for highly-educated tech talent. In fact, Delft has an overall larger student population, accounting for 57.5% of all Rotterdam and Delft students when pooled together.
A closer look at the population diversity of STEM students points to the lack of female and international students. For example, in Delft, Female students account for only 31% of STEM-enrolled students, while Males account for 69%. This marks only a minor improvement from 2018, when female students accounted for 28%. International students, on the other hand, make up a sizeable 25% of STEM students in Delft.
At the HBO level, tech education in Rotterdam has increased slightly since 2013. HBO students choose to specialise in STEM at 35%. The number of HBO students specialised in STEM reached over 6800 in 2021/22. 
While defining “tech” is always a blurry, partly subjective task, we have based our analysis on three criteria to select tech companies. First, tech companies are entities that either produce technological goods or services or rely (heavily) on technological processes internally. The second criterion is the combination of industry and business model. Third, this report excludes corporate, multinationals, as well as companies older than 1990. Similarly, definitions for startups and scaleups are widely inconsistent. Due to the unavailability of data on revenue or employee growth per company, this analysis classifies smaller companies (fewer than 50 employees) into startups and larger companies (more than 50 employees) into scaleups.
We have identified 475 tech companies in the Rotterdam-Hague greater region. The ICT sector, mainly including software companies, accounts for 17.4% of Rotterdam-based tech firms, making it the largest sector. Deep Tech (10%) is the second-largest identified category, and Energy (9.6%) is the third-largest sector.  Note that this report includes certain companies in multiple sectors, and some similar sectors are combined. Below is the breakdown of grouped sectors into their subsectors. One category, “Other”, didn’t fit in any of the other categories but was still included in the Tech Industry, and these companies accounted for 13.6%.
This report classifies 91.1% of the tech companies identified as startups (<50 employees). Only 8.8% are considered scaleups (>50 employees). This distribution also changes from sector to sector. The chart below shows the number of startups and scaleups in each sector. Note that certain companies are part of multiple sectors. The relative proportion of scaleups is highest in Transportation (15.6%), with Food and Health & Wellness being the two categories with the second higher percentage, both at 14.3%.
Excluding corporations, companies older than 1990, and multinational companies, approximately 9,295 employees work in the 475 tech startups and scaleups.
Energy is the largest sector, with 20% of these employees. Deeptech and Engineering (10.3%) and ICT 9.8%) are the second and third-highest employing tech sectors.
Startups represent 91.1% of Rotterdam’s tech companies but employ only 47.2% of workers, with just under 4,400 startup employees.
Scaleups, in turn, may only represent 8.8% of tech companies but account for 52.7% of the jobs in Rotterdam-based tech companies, employing almost 5,000 workers. The biggest employer by far is the energy sector.
Similarly to employment data, many investments are either undisclosed entirely or disclosed without financial figures, making it hard to reach precise estimates of annual funding and accurately value companies and the whole ecosystem. Yet, valuations for a (limited) number of companies from the analysis in the figure below point to a steep increase in the total amount of investment capital each year in Rotterdam tech companies.
A closer look at the annual funding since 2017 indicates that 2022 has been the strongest year to date. Both 2021 and 2022 have vastly surpassed the trend of previous years. A closer look at the individual funding rounds points to the strong impact of a few big funding rounds. For instance, of the €287 million raised in 2022, Geophy alone accounts for 77.2 million.
The below table outlines the largest (disclosed) investment rounds in Rotterdam technology since 2020. In each year, the majority of total investment came from just a few, albeit substantial, investments.
|2022||EUR M||2021||EUR M||2020||EUR M|
|Retail Rocket||21.82||Nearfield Instruments||17.5||DGB Group||5.6|
|Dawn Aerospace||20||Hardt Hyperloop||15||Innatera Nanosystems||5|
|Amber Implants||8.8||Ampyx Power||7.5||Qblox||2.5|
Whether the state of tech in Rotterdam suffices to brand the city a tech hub is subjective, but its ecosystem is certainly prospering. Growth is seen across all three pillars– education, entrepreneurship and investment. The number of tech students is growing year after year, the number of startups and scaleups has seen a solid increase over the past decade, and the total valuation of the ecosystem, carried by large individual investments in recent years, has risen steeply. These were promising trends from 2018 and are continuing in 2023. Rotterdam’s large student population, particularly when considering the access to technical talent from TU Delft, represents an opportunity to further brand Rotterdam as a student and talent magnet, leveraging its proposition as an international city with a competitive cost of living and high-quality life.
Similarly, the number of startups has grown year after year. However, both employment and investment statistics point to the dominant contribution that selects high-growth scaleups make to the overall ecosystem and economy. The most suitable opportunities thus lie in helping startups grow beyond their initial stages and accommodating the most successful and promising companies as best possible. Nevertheless, capital is a weakness of Rotterdam, with too few rounds and too little total funding in recent years, even relative to its size.
Tech Education: Rotterdam produces a significant number of STEM graduates, with Erasmus University alone having 27% of its students enrolled in STEM courses. TU Delft, located nearby, one of the largest universities in the country, focuses on STEM education and is the prime source of STEM students in the Greater Rotterdam region, making up 83.6% of the total STEM population. The city’s focus on education and its production of skilled workers is crucial to its tech industry’s development. However, the student population still needs to diversify, as right now, male students and Dutch nationals make up the majority of students.
Tech Companies: Rotterdam is home to diverse tech companies focusing on sustainability and innovation. The city’s startup scene is growing, with startups receiving support from the government and the private sector. The largest share of companies works within the ICT sector. However, Transportation, Food, and Energy & Recruitment seem to be the most successful sectors, having the most scaleups at ~15%.
Tech Employment: Rotterdam’s tech industry employs over 17,000 people, with the majority working in the Energy sector. The city’s high qualities educational institutions and the availability of skilled workers have contributed to the growth of its tech industry.
Tech Investment: Rotterdam has seen a significant increase in tech investments, with almost €300 million invested in tech companies in 2022. Each successive year has seen larger investment rounds, with 2021 and 2022 vastly surpassing previous years. The city’s focus on sustainability and innovation as well as its educated population has attracted local and international investors. However, there is room for improvement concerning access to capital for startups, as the investment is concentrated only around a few key companies each year.
The report highlights the city’s growing tech ecosystem and its potential for further growth and development. With a focus on education, entrepreneurship, and investment, Rotterdam is well-positioned to become a leading tech hub in Europe. However, continued efforts are needed to ensure the sector’s sustainability, diversity, and diversified growth.
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