Amsterdam wants to take on Silicon Valley

Youngsters dressed in T-shirts and jeans make their own sandwiches and drink water out of mugs in a makeshift canteen. This might sound like a college dorm room, but it's far from it – this is Amsterdam's biggest start-up accelerator, Rockstart.

The Dutch city, known more for its marijuana cafes and penchant for bicycles than cutting-edge technology, is looking to change its image and put itself on the map as an innovation hub alongside London, Berlin and Silicon Valley.

Arjun Kharpal | CNBC

But the task won't be easy. Venture capitalists invested just $792.75 million into the whole of the Netherland start-up scene in 2014, according to consultancy EY -- firmly behind the $2.85 billion poured into Germany and $2.7 billion pumped into the U.K. (Tweet this)

So why has Amsterdam been left behind?

"The mentality is just not crazy enough. It's so different to American culture, where there were people who believed more in my company than I did," Tim de Kraker, CEO of BarDoggy, told CNBC. BarDoggy is an Amsterdam-based app which directs users to bars and includes special offers if they are within a certain distance of a venue.

And according to the City of Amsterdam, there is a "shortfall of technical and entrepreneurial talent to satisfy the demand of start-up businesses."

Changing mood

Still, the mood is changing fast, with investors and founders bullish about the prospects of Amsterdam producing the next big thing. They point to the success of Adyen, a Dutch payment services company that recently became the country's first unicorn - a company with a valuation of $1 billion.

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"Success breeds success and if you have people building successful companies and making sure money goes back into the ecosystem, that is where you have that culture of money attracting money and I see that happening," Oscar Kneppers, founder of the Rockstart accelerator, told CNBC in an interview.

Major U.S. companies, such as Netflix and Uber, have also opened their European headquarters in Amsterdam, and founders hope this will give the city credibility as a tech hub and draw in much-needed developer talent.

Ultimately, Amsterdam's success will be judged on whether it can attract investors to pour money into its burgeoning start-up scene. Adyen raised $250 million at a $1.5 billion valuation in December, and Dutch venture capitalists said they had no doubt that more international investors would start to come.

"If more companies raise big rounds, the ambition level of all entrepreneurs will be affected by that and more money will come," Sake Bosch, managing partner at Prime Ventures, told CNBC by phone.

Rockstart's Kneppers is hoping to drive this trend through Rockstart. The hub picks 10 companies to run through its accelerator program -- an intensive three-month bootcamp that ends in a "demo day" where the start-ups pitch to investors.

Occurring several times a year, Kneppers said around 80 percent of the companies end up with some form of funding. As well as the accelerator program, Rockstart, which is based in the city center, houses over 50 start-ups and is looking to expand into Singapore and Latin America to connect Dutch companies with international investors and peers.

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The government is heavily backing the efforts by Amsterdam's entrepreneurs and it has also launched a special visa to allow non-EU residents to come over to the Netherlands and begin business.

In December, Neelie Kroes, the European Union's (EU) former digital chief, was appointed as "special envoy" for Netherlands start-ups to help new businesses establish themselves in the country.

And she's thinking bigger than just Amsterdam. The former politician said that there are several hubs around the Netherlands -- such as Rotterdam and Eindhoven -- that could help turn it into a national tech center.

"It is not a huge country, it's a small country, but with a lot of potential and...one of our targets to connect all those hubs in the Netherlands and the distance between the hubs is never ever more than 90 minutes," Kroes told CNBC at The Next Web conference in Amsterdam.

Amsterdam ascendency?

All of this effort seems to be having an effect, working with a number of start-ups telling CNBC that interest from international investors was increasing.

"It's changing already. Last year I saw a lot of events where investors from the U.K., Germany and Silicon Valley came here, organizing drinks and dinners to meet start-ups here. The world is seeing great companies being raised in the Netherlands," Daan Weddepohl, founder and CEO of Peerby, told CNBC. Peerby lets people borrow things like bikes and shovels from their neighbours -- much like an "Airbnb for stuff," Weddepohl said. The company has raised $3 million since starting in 2012.

The view of Amsterdam is also shifting in the mind of investors, according to Bram de Zwart, founder of 3D Hubs, which connects people who have 3D printers with those that want to print something. It recently raised $4.5 million in a funding round led by the U.K.'s Balderton Capital.

"I talk to investors and they really tell me that they are starting to look differently at Amsterdam and are putting it in the list with London and Berlin. In the last half year, the amount of visits from foreign VCs is increasing," de Zwart told CNBC.

- By CNBC's Arjun Kharpal