In third place Messin Bliiida, the fourth edition of the Digital Day, organized by the network of incubators Grand Est Quest for Change, brought together 70 start-ups. The opportunity to take stock of the economic health of the young shoots of the territory, which managed to raise more than 100 million euros in 2021.
One carries a plastic recycling solution, the other designs medical decision support software for skin lesions. As for this entrepreneur, it is from private sales in the world of video games that he designs his business. A total of 70 digital innovation prodigies were at Bliiida on Thursday, June 9, for the fourth edition of the Digital Day organized by the Grand Est incubator network called Quest for Change (which brings together The Pool in Metz, Quai Alpha in Épinal , Semia in Strasbourg and Mulhouse, Innovact in Reims, Rimbaud’Tech in Charleville-Mézières). The opportunity for young entrepreneurs to discuss their daily problems, establish partnerships with each other, but also participate in the two conferences planned around cryptocurrencies and fundraising.
A total of 234 start-ups make up the network and generate a global value of 12 million euros in turnover. Weak for such a large number of companies? Whatever it is. Because what counts in the first years of a start-up’s life is its valuation, its ability to raise funds and enter the commercialization phase, after industrialization. There, the numbers are eloquent: in 2021, the start-ups of the Quest for Change network raised €102 million, are worth more than €250 million and involve 400 project leaders and 700 jobs.
“We are at the level of an ETI (midsize company, editor’s note) distributed by the Grand Est”, summarizes Stéphane Chauffriat, director of Quest for Change. Also because the most interesting is yet to come: according to the director, the support offered by the network, combined with that of the incubators, should allow innovative companies to multiply their activity by three, four or even five in three years. …Exponential growth that would make it possible to surpass the barrier of 3,000 people involved in start-ups in the Grand Est region. “Being united means having a common legal framework, organizing days like this Digital Day and pushing Parisian investment funds to cross the ring road to come to us. The possibility of seeing 234 start-ups at once is an added value”, explains the director. “This networked organization also allows us to take the best out of each incubator and duplicate it in all territories. The research potential is objectively stronger in Alsace, but this benefits the entire Grand Est,” admits the mayor of Metz, François Grosdidier.
What start-ups in the Grand Est?
If we expand the 102 million euros raised in 2021 by the network’s start-ups, 43% of the envelope was used to finance projects focused on biotechnology, 13% on medtech and 11% on e-health. Healthcare startups also account for two-thirds of the value of the entire Quest for Change ecosystem. “We speak of Boston as the world’s capital of healthcare innovation, but the Grand Est is also extremely advanced in these matters”, celebrates François Grosdidier. Quest for Change is also the first healthcare incubator in France.
Digital startups are also performing well and managed to raise 9% of the value, while industrial startups, 7%. The network of incubators estimates that they will need 407 million euros of investment over the next five years to finance their future production lines, factories and manufacturing processes. “This reinforces the strategic character for the development of new local industrial jobs, as long as they are accompanied in the industrialization phase, which remains risky”, comments Stéphane Chauffriat.
In total, for all start-ups, 55% of the funding was diluted (which implies loss of independence and equity participation by going public to business angels, seed funds, venture capital, family office, etc.). The remainder, non-diluting (no loss of shares to participants and which includes honor loans, bank loans, grants, etc.), is provided in particular by Grand Est and Bpifrance.
Thanks to support and access to funding, Quest for Change start-ups achieve a sustainability rate of 89% three years after creation and 84% five years. The start-up world is far from as fragile as it is sometimes thought.
How to succeed in fundraising?
In the waiting room, the pressure inevitably increases. Behind the door, the line of investors who will decide the future of the start-up, choosing whether or not to release funds, sharpens their questions. Sharp. How is the competition positioned? What market? What are the means of market access? What is your reaction to this problem? And the export? During this Digital Day, Quest for Change hosted a conference dedicated to fundraising mechanisms to understand subtlety. “You have to prepare like you would for a job interview. Repeat several times”, recommends Stéphane Chauffriat, director of the Quest for Change incubator network. “Exactly like a top athlete,” adds Marc Berthold, founder of gamingprivé.com. “We are not looking for the perfect project. Either way, there will always be a start-up that does better. The project leader’s worst enemy is certainty. We must accept criticism and propose solutions to the problems raised by investors even if they cannot be solved immediately”, highlights Nicolas Ivaldi, from the EY consultancy. “A business angel takes risks with his money, but he also likes to participate in the creation of the company. It must therefore be integrated”, adds Catherine Arbez, director of the Innovact incubator.
If the designs may not reach perfection, it is necessary, on the other hand, that the bearers seduce. Before pressing the button, potential funders will mainly want to ensure the consistency of the team leading the project, the complementarity of profiles and charisma. A brief presentation of each person’s background would be welcome. “You have to tell a story at all costs. A business angel primarily relies on their intuition. In 30 seconds he can know if he is going to invest or not,” recalls Catherine Arbez. “Investors bet on a team before a project”, Nicolas Ivadi abounds. Knowing the background of the investors you know is also a way to promote exchanges.