Belgium vs Germany in the Life Sciences start-up championship

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Germany is one of the leading industrial nations in the world and has 8x more inhabitants than Belgium. However, when it comes to investments in early startups and early stage funds in life sciences, Belgium seems fit to hold the candle.

The vivid Belgian landscape

Belgium represents only 3% of the EU economy but no less than 16% of Europe’s biotech industry and 14% of the European pharmaceutical exports. The pharmaceutical industry in Belgium accounts for almost 5% of the country’s total employment. And despite its size, Belgium has an astonishingly vibrant and prolific life sciences investment scene. Many Belgian life sciences venture capital funds (VC’s) are willing to invest in startup biopharmaceutical companies. A number of established funds like PMV, Gimv, Vesalius Biocapital, Gemma Frisius Fund, Capricorn, LRM, SRIW, and Vives invest in these kinds of startups, but there are also some new kids on the block like Qbic, Fund+, DROIA, Bioqube Ventures, Newton Biocapital, and V-Bio Ventures.

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Germany not quite world champion in life sciences startups

Germany also counts a number of life sciences VC’s, although some of the most relevant funds are actually subsidiaries of funds with a Belgian origin (like Vesalius and GIMV) or Dutch origin (LSP and Forbion). Some remaining truly German funds are Wellington Partners, EMBL Ventures, Creathor, and MIG Fonds.

The High Tech Gruenderfonds (HTGF) specializes in investing in spinoffs and early-stage companies – not limited to life sciences – in many cases in syndicate with other VC’s. However, these syndicates are often very difficult to build for capital-intensive startups in the biopharmaceutical field, as most life sciences VC’s are not willing to step in so early. The same problem also limits the impact of Coparion as well as local funds in Germany such as LBBW, NRW Bank, or Bayern Kapital, whose operating range is restricted to a certain region and who often can only act as co-investors and are not allowed to take the lead.

Family offices and High Net Worth Individuals (HNWI), such as the Strüngmanns and Hopp/Dievini, can invest large amounts of money, but they do this only in very few, selected companies. And hardly any new investments have been made in the last couple of years.

What is Belgium’s secret potion?

Numerous factors contribute to Belgium’s strong life sciences investment scene:

  • A long history of excellent universities such as the KU Leuven and Ghent University, which rank in the top 20 of Thomson Reuters’ ranking of Europe’s most innovative universities.
  • Much earlier dedication to technology transfer, excellence, and application. The KU Leuven R&D, for instance, was established in 1972 as one of the first Technology Transfer Offices (TTO’s) in Europe.
  • Establishment of the interuniversity research institute VIB in 1996 to stimulate excellence and translation in life sciences research, receiving ever-increasing support from the government. The two success factors of this institute are a very strict review process for its scientists and a strong focus on economic and societal return of scientific breakthrough inventions.
  • A strong ambition to turn Belgium into one of the life sciences hot spots of Europe. The regions of Flanders and Wallonia are highly dedicated to attracting new companies and to providing favorable conditions for startup companies to thrive.
  • Implementation of various measures to ensure that a significant amount of the money generated through successful inventions flows back directly to the scientific inventors and is reinvested into their own research projects.
  • Willingness of successful Belgian scientists, High-net-worth individuals (HNWI’s), and companies to reinvest into Belgian startup companies and science.
  • Flanders’ and Wallonia’s governments handing out significant grants for basic research, as well as for translational research and startup companies.
  • Leading role models such as Galapagos, Ablynx, ThromboGenics, CropDesign, DevGen, Biocartis, Mithra, and Ogeda, complemented by more recent promising runner up companies like argenx, Iteos, and Celyad.
  • Beginner’s luck factor: Plant Genetic Systems (founded in 1982), one of the first VC-backed life sciences startup companies in Belgium, was acquired in 1996 by AgrEvo for 750 million dollars, which provided a fantastic ROI for the investors. This obviously promoted the local VC community’s appetite to further invest in life sciences startups.
  • Excellent conditions for clinical studies, created by the government (1).
  • And last but maybe not least, Belgium’s small size and high population density, allowing close interactions among all relevant stakeholders, including pharmaceutical companies located in Belgium like Janssen Pharmaceutica, UCB, and GSK.

Belgium, beware of the pitfalls!

One of the pitfalls is that few of the Belgian life sciences startups have really made it to standalone entities with a positive cash flow generated from their own product sales so far. Galapagos, Mithra, and Biocartis could be among the first to cross this barrier.

Also, in Belgium there are still not enough scientists who dare to found a new company and take ownership in its future development. Thus, it will be important to further stimulate entrepreneurship and educate scientists about what is needed to embark on this adventure. In addition, it will be essential to further decrease the barriers among industry, academia, VC’s, and TTO’s to spur learning and growth.
While Belgium has already made several steps in the right direction, the real challenge still lies ahead. The biotech hype at the beginning of the millennium caught the young VC and biotech scene in Germany off guard and led to a significant consolidation from which few VC’s recovered. With many Belgian VC’s being only in their first or second generation of funds, the real challenge of turning more startups into cash-generating mature companies still lies ahead. Openness, effort, and enthusiasm will be required from all stakeholders to create a sustainable ecosystem.


(1) Regering wil van ons land pharma valley maken, De Morgen, July 2017