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On 8 December, the Minister of Economic Affairs and Climate presented Dialogic's interim evaluation of Invest-NL, conducted in collaboration with Professor Peter Roosenboom (RSM-EUR), to the First and Second Chamber and accompanied by a policy response.
Invest-NL in brief:
With the establishment of Invest-NL at the end of 2019, the Netherlands now has a National Promotional Institution (NPI) for financing and development again. According to the Empowerment Act Invest-NL, the aim of Invest-NL is to contribute to financing and achieving societal transition tasks by companies, and to provide access to business financing when the market does not adequately provide for it. Invest-NL has a Financing Task and a Development Task, which are respectively housed in the private enterprises Invest-NL Capital and Invest-NL Business Development.
For the Investment Task ("Capital"), Invest-NL had a budget of €1.7 billion at inception. By the end of September 2022, Invest-NL had committed €605 million to investment volume. Of this, 37% had been invested directly through equity stakes and loans (€225 million), while 63% comprised indirect investments through fund mandates (€380 million). The share of direct investments has thus increased from 15% in 2020 to the mentioned 37% in 2022, with expectations for this percentage to further increase. As of 21 September 2022, a total of 52 investments had been made in funds and companies. For the Development Task, the Ministry of Economic Affairs and Climate annually provides a subsidy of approximately €10 million. The activities related to the Development Task ("Business Development") include: 1) Market research and development aimed at increasing knowledge of specific submarkets and the financeability of innovative companies; 2) Advising and supporting entrepreneurs/companies in solving challenges and scaling up innovative companies (proposition guidance aimed at enhancing financeability), and; 3) Developing new financing instruments (financial product development). Invest-NL has progressively narrowed down its focus to specific themes, namely: 1) Energy/Ventures; 2) Energy/Projects; 3) Bio/Circular; 4) Agri-food; and 5) Life Sciences & Health. Within these themes, Invest-NL primarily focuses on circular and CO2-neutral transitions. Deep Tech and enhancing the supply of risk capital for innovative start-ups and scale-ups are identified as (broad) themes 6 and 7.
Between April and September 2022, Dialogic investigated how Invest-NL had fulfilled the tasks outlined in the Empowerment Act, the results achieved by Invest-NL, and the added value of Invest-NL. This interim evaluation took the form of a "peek under the hood" of Invest-NL. For the evaluation, alongside desk research, project data were analysed (e.g. to reconstruct the funnel of Invest-NL Capital as Invest-NL Business Development), a modest dossier analysis was carried out, and 40 individuals (stakeholders, experts) were interviewed.
One of the conclusions drawn is that the mandate given to Invest-NL at the outset provides sufficient manoeuvring space. At the same time, it was also concluded that there is some room or an operating window for Invest-NL to make investments contributing to societal transitions, but that this room is limited. To determine the actual space (operating window) for Invest-NL to make direct and indirect investments, three perspectives on market conformity were distinguish...