According to EU-Startups, Dutch venture capital firm henQ has launched its fifth fund with €67.6 million to back early-stage B2B software startups across Europe. The fund will make initial investments of €1-10 million in 8-12 companies over five years, focusing specifically on markets other investors consider “boring” or “too small.” Fund managers Mick Mackaay, Coen van Duiven, Rob Rousseau and Jan Andriessen will maintain the firm’s concentrated portfolio approach, investing in only 2-3 companies annually while prioritizing founder execution over market trends. The fund notably raised capital without institutional or government backing despite these sources comprising nearly half of their previous fund, reflecting their commitment to independent decision-making focused solely on long-term returns. This contrarian approach stands in stark contrast to the broader European VC landscape where firms like Notion Capital and Evantic Capital are raising significantly larger funds targeting AI and enterprise tech.
The European Scaling Reality Most VCs Ignore
What makes henQ’s strategy particularly compelling is their understanding of a fundamental truth about European B2B software scaling that many investors miss. As Partner Jan Andriessen noted, European companies face fundamentally different scaling challenges than their American counterparts. The European market isn’t a single market—it’s dozens of distinct markets with different languages, regulations, and business cultures. This fragmentation means that simply throwing more capital at European startups often creates more problems than it solves. Many European B2B companies reach profitability and sustainable growth with far less capital than comparable US companies because they’re forced to develop more efficient business models from the outset.
Why Founder Execution Trumps Everything
henQ’s exclusive focus on founder execution represents a radical departure from the typical VC checklist approach. Most venture firms evaluate markets first, then teams—henQ reverses this entirely. This approach allows them to identify exceptional operators who can create value in markets others overlook. The “boring markets” strategy isn’t about avoiding innovation; it’s about finding founders who can dominate niche markets with strong fundamentals but limited competition. This execution-first philosophy enables faster decision-making and positions them to capitalize on temporarily undervalued sectors that larger, more bureaucratic funds would dismiss.
The Concentration Advantage in a Distracted Market
While other European VCs are building massive portfolios hoping for a few breakout winners, henQ’s commitment to just 8-12 companies per fund represents a fundamentally different risk profile. Their goal of making every investment “have an interesting return profile in and by itself” suggests they’re avoiding the power law dynamics that drive most venture returns. This concentrated approach allows for deeper founder support and more strategic guidance—resources that get diluted in larger portfolios. In an era where many VCs are becoming asset managers rather than true partners, henQ’s model preserves the hands-on support that early-stage European founders desperately need.
Why Independent Capital Matters Now
henQ’s decision to forego institutional and government capital for their latest fund speaks volumes about their confidence in their strategy. Government-backed capital often comes with strings attached—geographic restrictions, sector mandates, or pressure to follow trendy investment themes. By building a fund entirely from entrepreneurial LPs, they’ve created alignment with founders who understand the realities of building businesses rather than meeting bureaucratic objectives. This independence becomes particularly valuable during market downturns when government programs might pull back or change focus, leaving dependent funds stranded.
Where European VC Is Headed Next
henQ’s approach may signal the beginning of a broader specialization trend in European venture capital. As the market matures, we’re likely to see more funds develop distinct philosophies rather than chasing the same AI and fintech trends. The Amsterdam ecosystem that henQ helped build demonstrates that specialized, founder-focused capital can create outsized returns without following Silicon Valley’s playbook. Their success with portfolio companies like Formulate and Mendix suggests that backing exceptional operators in overlooked markets may prove more sustainable than chasing hyped sectors where competition drives up valuations and diminishes returns.
The Long Game in European Tech Investing
Looking ahead 12-24 months, henQ’s strategy appears particularly well-positioned for the current market environment. As larger funds face pressure from their LPs to show returns in crowded sectors, henQ’s focus on fundamental business building in stable markets provides insulation from market cycles. Their lean team structure and concentrated portfolio mean they can move quickly when opportunities emerge, without being burdened by the overhead that plagues larger organizations. For European founders building sustainable B2B businesses rather than chasing unicorn status, henQ’s model represents exactly the kind of patient, focused capital the ecosystem needs to mature beyond its current hype cycles.
