Belgium’s startup ecosystem has been flourishing over the past ten years, however, it is still quite challenging for early-stage founders to get a substantial investment in the region. Tenants of good technology talent and innovation, yet many young companies find it hard to grow beyond their early traction because there is not enough pre-seed and seed-stage capital available. KBC Group now is on a mission to change the scene by a very significant new commitment.
Through Start it @KBC, its long-term accelerator program, the Belgian bank is putting up a fund of €100 million to support the journey from very early entrepreneurship to high growth level. A new fund, the Start it Fund, is at the heart of this project to provide graduates of the program with the cash infusion and the necessary support when they come to turning points in their development. This action is a response to the long-time demand of founders who want to get money from those partners who are already familiar with their companies.
The Start It Fund will invest an average of about €300,000 per startup, while there will be room for higher amounts depending on the performance and the capital needs of the company. What is equally important is that Start it @KBC will continue its well-known “no-equity” approach during the accelerator program. The investment decisions will be only after the one-year program and only for the companies that have been top-performing.
The initiative is to consolidate the collaboration between Start it @KBC and KBC Securities, the investment banking division of KBC Group. The two entities are planning to work closely together in providing the whole route to founders from the first steps with the help of a mentor to the potential exit.
Start it @KBC has since 2014 been a source of help to over 1,900 startups and presently, it engages with 150 new founders every year, thus, it is the largest Belgian startup ecosystem. The alumni of the accelerator have in total been able to raise more than 1.1 billion euros in funding and have created over 12,000 jobs. The big European scale-ups like Aikido Security, Loop Earplugs, Segments.ai, Bolt, Conveo, and Crazy Games have their origins in the program.
The extension echoes the bank’s long-standing entrepreneurial culture, according to Johan Thijs, CEO of KBC Group.
“Entrepreneurship is one of our core strengths,” says Thijs. “By creating the new fund, we are in a position to provide support to founders through all stages from idea to IPO — by sharing with them the right knowledge, networks, and capital for their ambitions. Our mission is to offer entrepreneurs all the doors that will lead them to becoming the global players of tomorrow.”
Additional Support and Follow-On Capital
Those founders who get an investment from the Start it Fund will be additionally supported for one more year by the hand-on mentoring and they will also be provided the access to a vast alumni community. This extended support aims at helping startups to smoothly transit the phase where product development is still at an early stage but they are already looking at commercial scaling.
Additional capital might be available for the performance of the most robust teams. KBC Securities will be ready to provide up to €5 million as follow-on investment thus, it will be filling a very important vacuum in the Belgian scale-up landscape.
“After the earliest stage, the number of funds in Belgium for companies that want to grow is limited,” says Tim Derycke, head of Investment Services & KBC Focus Fund at KBC Securities. “We would like to use this new capital to help top-tier startups stabilize as scale-ups.”
Derycke also points out that KBC Securities is more than a financier. M&A advisory, financial structuring, and IPO preparation are among the services it offers—a package integrated and seldom available in one ecosystem in Belgium.
Decision Based On Long-Term Founder Insight
Start it @KBC’s investment strategy is unlike that of traditional VCs. The accelerator keeps tabs on founders for a whole year prior to any funding decision. Such closeness as explained by CTO Andy Gijbels, gives them a view that cannot be obtained from pitch decks.
“Investors frequently let go of chances because they count on surface-level metrics,” explains Gijbels. “We see founders learning, adjusting, and getting over their hurdles. These, in fact, are the true signs of eventual success. Furthermore, this model allows underestimated founders to be given a fair shot.”
Supporting data drawn from over 1,900 startups mentored and with a survival rate of 73% over five years—which is much higher than the global average—are in line with the correctness of the methodology practiced at Start it @KBC.
Helping Out Belgium’s Innovation Pipeline
By pledging €100 million, KBC is effectively a cornerstone investor in the entrepreneurial landscape of Belgium in the years to come. The Start it Fund not only serves as a solution to the problem of lack of money for the very early stages of development but also unites the way for founders to go from idea, through growth, to exit stages.
The project is expected to speed up the transformation of Belgium into a competitive European startup hub. The founders there will have easier access to money, know-how, and international development possibilities.