Surprise, surprise… AI dominates Belgian software investment 

Zooming in on the type of Belgian tech companies attracting funding in recent years, 52 per cent fall into the software category, compared to 48 per cent for hardware (slightly more exposed to the latter in comparison to Europe).

 AI companies accounted for more than 70 per cent  of the capital invested in the first half of 2024.

According to Olivier Rousseaux, Director of Venture Development, Imec:

“When we first ventured into the deep tech scene in Belgium, the funding landscape was extremely limited. Raising just €1-3 million for a seed round was the norm, far below what was needed for success.

Today, we’re seeing a significant shift, with seed rounds now attracting €10-15 million, which is a crucial step towards building successful deep tech ventures.”

However  while experiencing unmistakable growth, the Belgian Tech ecosystem is still firmly in its early maturation phase. Over the last six years, early-stage financing rounds accounted for around 77 per cent of capital raised by Belgian tech start-ups, compared to 42 per cent in Europe over the same period.

Talent shortages and ESOPs limit Belgian founders

The startup founder survey reveals that Talent and ESOP schemes are the main pain points of Belgian founders: both have a negative impact on founders’ ability to scale their business and the latter limits the reinvestment power of opera- tors in successful start-ups.

All startups need experienced staff to grow and scale, especially who’ve done it before. The rport highlights a shortage of local serial entrpreneurs and staff personnel with vital experience scaling a company.

Further, attracting senior talent abroad is necessary, confirms Adrien Roose, CEO and co-founder of Cowboy.  Whilst Belgium has a high standard of living and a strategic location, it’s is not always the first choice destination of foreign talent:

“For our CMO and CFO roles, we were able to secure great candidates from overseas who believed in our proposition and flexible working; they spend a lot of time in Belgium but haven’t relocated.”

“Brussels is often seen as a second-tier city by international talent when compared to London, Paris or Berlin, increasing the difficulty to convince people to relocate.”

ESOPs (Employee Stock Ownership Plans) generally give employees the right to purchase company stock at a predetermined strike price after a certain period of time, which aims to foster a culture of ownership and enhanced engagement as employees share in the company’s success, and provide significant financial benefits for both employees and employers.

The current social and fiscal approach in Belgium increases the risk for employees and companies and the administrative regulation puts Belgian companies at a disadvantage.The significant challenges for the implementation of ESOPs were raised by many entrepreneurs and investors interviewed for this report.

Willem Delbare, CTO & founder, Aikido shared:

“The current system is suboptimal, with a lot of elements creating friction: short exercise windows, uncertainty at the moment of exit, limited information, upfront payment which can force people to take loans, … it’s a lose-lose-lose.

While having employees benefit from company growth, results in more people reinvesting in the ecosystem, creating an additional growth driver.”

Accoring to Laurens De Poorter, Founder of Syndicate One:

 “Pushing the Belgian tech ecosystem further to the next level is Syndicate One’s raison d’être. Besides strengthening the connective tissue in our ecosystem by uniting existing players and investing in new ones, we provide tools for anyone who aims to improve it.

We believe this report can be a map of the ecosystem for entrepreneurs, investors and policymakers to make better, more informed decisions. We are honored to partner with Sofina and Bain & Company to present it to you.”