Can a small team stimulate innovation, investment, and internationalisation in a regional economy? Well, that’s the remit of ROM InWest in North Holland.
Regional Development Agencies or Regionale Ontwikkelingsmaatschappijen (ROMs) in Dutch were originally established as the initiative of the then Ministry of Economic Affairs and Climate.
The ROMs in the Netherlands were tasked with stimulating the economy in their region. Today, there are nine ROMs in the country, each representing a region and operating under the umbrella organisation of ROM Nederland.
In North Holland, the task falls under ROM InWest and with a small team, it is showing how to create an innovative and strong entrepreneurial climate.
An investor with dual objective
ROM InWest is unlike any other investor. On one hand, it works to strengthen the regional economy while on the other hand, it also facilitates pivotal transitions including energy transition, circularity, food transition, and digitalisation.
Kostas Mamalingkas, Head of Team Investing at ROM InWest, calls this dual objective of the regional development agency.
“Many startups and scaleups in North Holland endorse our mission and are well aware of our presence,” says Mamalingkas.
He also describes ROM InWest as a generic investor since the regional development agency “can only invest when there is market failure.”
In order to support startups in North Holland working on energy transition or circularity, ROM InWest often collaborates with a lead investor.
This clear and dynamic approach has earned ROM InWest a lot of praise in North Holland while also building trust in the market.
“We started with a small team of investment managers and strived to reach the initial transactions as quickly and carefully as possible in the two funds at our disposal,” explains Mamalingkas.
Room to invest
ROM InWest recently closed its tenth investment with the backing of high-tech startup UbiOps, which offers a powerful MLOps platform for deploying and managing ML models.
In the past year, ROM InWest has funded startups like Supersola, Quicargo, Woon Duurzaam, YourCampus, URC, tex.tracer, Agurotech, Solarix, and Biyu.
These funding have come at a crucial juncture where venture capitalists have taken a step back to focus on profitability over growth.
Mamalingkas says there is more room to invest. “Even after our first ten investments, we still have plenty of room to invest in new companies and continue investing in existing portfolio companies,” he says.
ROM InWest has two funds with one focussed on energy transition, circularity, and food transition and arguably the most important fund.
Mamalingkas says, “These are significant issues at present, not only in North Holland but worldwide. With this fund, we aim to create a direct impact on these transitions.”
The second is SME fund, where ROM InWest is concentrating on more innovative startups and scaleups.
This fund will back startups in the field of life sciences and health propositions or AI platforms.
For the second half of the year, Mamalingkas says ROM InWest is trying to shape its portfolio around KPIs such as impact, transition, maturity of investments, diversity and inclusivity.
“These considerations will guide our portfolios in the coming years,” he adds.
Invest and Innovate
For many startups, the investment alone is not enough and they also seek guidance from their backers.
As a regional development agency, ROM InWest is uniquely built to not only fund startups but also guide them towards innovation.
After completing five or six investments, Mamalingkas says they organise a session with ScaleUpNation.
The idea of this session is for startups backed by ROM InWest to gain more insight into what ScaleUpNation can offer them. It also helps networking between them.
ROM InWest also has a strong connection with several other business-building entities in the market and it refers its portfolio companies to them for specific inquiries.
Mamalingkas says, “In some cases, our own business developers can also assist with certain challenges faced by the companies.”
When it comes to innovation, Mamalingkas says ROM InWest is mostly focussed on life sciences and health.
“Often, we see a combination with AI in this field, which intersects with digitalisation,” he says, showing how companies are increasingly overlapping in terms of business.
When asked how can a startup or a scaleup get funding from ROM InWest? Mamalingkas says they want to see a product or service demonstrated in a testing environment or meeting Technology Readiness Level 6.
Once the technology readiness is there, ROM InWest then looks at the team leading the startup followed by market validation.
While startups and scaleups need to demonstrate how their product or service will make a difference, Mamalingkas says ROM InWest’s business developers can support entrepreneurs find the earning potential.
Regional Impact
It is now becoming increasingly common to find investors making a huge impact in a particular industry or sector but ROM InWest’s impact extends to an entire region.
This is possible because of its dynamic approach where it not only invests but also remains engaged with the entrepreneurs to further support them.
For ROM InWest, success of every startup in North Holland is also success for the entire region.
Through its transition fund, ROM InWest also helps the entire region create an environmental impact.
Mamalingkas says for startups within its transition fund, they look at only one criteria for impact: the minimum amount of CO2 reduction.
However, for startups within its SME fund, he says the regional development agency looks at criterias such as employment, degree of innovation, and social impact.
With 10 investments under its belt, Mamalingkas says it will remain special the speed in which we accomplished this, considering ROM InWest began investing in startups and SMEs two years ago.
“I’m delighted that we have already invested in several female founders and have built a diverse portfolio,” he adds.
It is important to understand that entrepreneurs often have a good understanding of what they want.
ROM InWest, however, sees its impact on entrepreneurs through its ability to help them refine their propositions and connect them with leaders that can assist in sharpening their plans.
“When raising funds from investors, especially in this market, ensure you have sufficient runway and start talking to your least favourite investors,” Mamalingkas says when asked for advice to entrepreneurs.
He says entrepreneurs should learn from feedback offered by their least favourite investors to refine their plans.
Read the orginal article: https://siliconcanals.com/news/rom-inwest-regional-impact-kostas-mamalingkas-interview/
