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B69AEA Offices Amsterdam Zuidas. ABN-AMRO Bank HQ on the left. Middle right: Ito Tower with empty IceSave offices on the 11th floor.
Image from Wim Wiskerke

New report ranks Europe's best cities for scale-ups

European ScaleUp Monitor 2020 ranks Amsterdam as a top-10 scale-up city and offers insights, best-practices and advice for entrepreneurs looking to grow their scale-ups in Europe. 

The European ScaleUp Monitor 2020 gives both Amsterdam and the Netherlands high marks. As relatively small entities, both are punching above their weight thanks to supportive economic policies and a strong ecosystem. Packed with interesting insights, the report offers sensible tips to help startups achieve speedy growth in 2021 and emphasises the importance of unlocking the untapped potential of female entrepreneurship.

What is it like for Europe’s fastest growing companies?

“Data and insights about scale-ups are crucial. Scale-ups provide tomorrow’s income, create new jobs and, most importantly, contribute by introducing innovative products and services to solving global challenges,” writes Professor Dr Justin Jansen as a way of introduction to the European ScaleUp Monitor 2020.

With this context in mind, the report gives a candid overview of the scale-up landscape in Europe. Published by Rotterdam’s Erasmus Center for Entrepreneurship (ECE), the report also offers valuable insights into the opportunities, challenges and best practices for those European companies out to attain speedy growth. 

Amsterdam: a “small” scaling powerhouse

The report shows that scale-ups tend to cluster together, with 80% located in the ‘Top 10 Scale-up Countries’ and 44% in the ‘Top 20 Scale-up Cities’. While the UK is the country with the most  scale-ups, “small countries” still do rather well with Sweden at #4 and Netherlands at #7 with Amsterdam ranking #8 as top scaleup city. In addition, the scale-ups and investors driving growth tend to be specialised in areas strongly represented in the Amsterdam region: FinTech, Mobile, AI & Machine Learning and the Life Sciences. 

Amsterdam-based Roamler as scale-up role model

The report uses Amsterdam-based Roamler as a scale-up following best practices. After raising €29 million, the B2B crowdsourcing company is managing speedy growth – even during a pandemic year – thanks to “an impressive international presence with multiple global offices”.

The report states: “The company’s architecture is designed to scale in several verticals and geographies, with first implementations in industries such as field marketing in the retail sector and in-home internet of things installations and repairs, enabling companies to get efficient people who can perform on-demand tasks throughout Europe.” 

How should scale-ups expand internationally?

The report offers concrete advice on how to expand internationally in 2021. While 2020 had its obvious challenges, the tech sector did well with European tech companies increasing in value by 46% over the year – with a fourfold increase over the past five years.

“Internationalising in Europe brings immense potential for scaleups,” the monitor predicts. “Amsterdam, Berlin and Paris are set to hold their positions as the startup super-hubs of Europe”. However, Europe remains a very diverse place: “Success in one European market does not necessarily translate to success in another.” 

Therefore, “understanding the native product-market fit, local nuances, cultural differences in ways of working, selling and building trust: all these elements will be crucial in determining the right market, the right moment and the right way to expand. Setting up a good process and decision tree, is key to expansion success.”

Unlocking the potential in female entrepreneurship

Emphasising the importance of supporting female entrepreneurs, the report applauded the Netherlands’ 29% increase of female entrepreneurs (from 492.000 to 637.000), with a 42% increase for women up to age 35, over the last five years.

However, work still needs to be done. “There are still fewer women than men who grow their startups and young ventures into a scale-up. The number of scale-ups with at least one female entrepreneur in the Netherlands remained more or less stable at around 12% over the last five years.”

Such stagnation is a wasted opportunity, according to the report. “Women entrepreneurs arguably represent the largest untapped entrepreneurial and leadership potential in Europe. When we unlock this potential, this not only leads to a positive economic impact but also a positive social impact by bringing about a fairer distribution of opportunity and prosperity across society.” 

Go Europe!

The Monitor wraps up with a rallying cry for a more interconnected European scale-up ecosystem. While countries such as the UK, France, Sweden and the Netherlands have established economic policies to support their respective scale-up ecosystem, Europe as a whole lags and therefore is not reaching its potential.

“Further coordination within the European ecosystem is needed to organise more coordinated growth programmes,” the study concludes, “that make resources such as talent, capital and (international) market more accessible for European scale-ups.”

Now stay tuned: ECE promises that this report is just the kick-off, with more in-depth reports to follow in the coming months.