Deeptech: government mobilizes 500 million to encourage researchers to launch startups

Posted on Jan 9, 2023, 7:30 am

A little over a year ago, a study by the Institut Montaigne on innovation pointed to the under-representation of researchers at the forefront of French technological nuggets. A notable difference compared to Germany, the country of doctors, or England.

Scientific work in energy, health, artificial intelligence, biology or quantum physics can, however, be the basis for great commercial success, as long as researchers are helped to don the entrepreneurial suit and bet on a good business model.

Aware of this delay, the executive launched a deeptech plan in 2019, led by Bpifrance, and released additional funding in 2022 to help startups industrialize innovative technologies.

These devices began to bear fruit: about 250 deeptechs emerged in 2021, according to a report by the public bank. The government hopes to see 500 new ones born per year by 2030 to participate in the country’s reindustrialization effort and preserve its technological sovereignty.

Development of university innovation centers

To this end, the Minister for Higher Education and Research, Sylvie Retailleau, and Roland Lescure, Deputy Minister responsible for Industry, detailed, this Monday, in Lorraine, a series of measures aimed at encouraging researchers to leave the laboratory for technology deep.

“We want to mobilize research as a lever to transform society, turning it towards innovation”, insists Sylvie Retailleau. “Researchers can provide solutions to all the challenges we are aware of”, continues the man who, before becoming a minister, directed Paris-Saclay, a top research center in France.

This transformation will involve, in particular, support for 20 university innovation centers (PUI), which will join the five pilot sites already implemented. These centers should help to better reveal the potential of innovations, manage intellectual property and contracting issues, facilitate data sharing and intensify relationships between researchers and the economic world. “The 25 PUIs should be labeled by summer,” specifies Sylvie Retailleau.

500 million mobilized

In recent years, more and more researchers have realized that entrepreneurship could be a career path. But there are still psychological barriers to overcome. Aids exist, but sometimes they are difficult to read or little known. Sylvie Retailleau hopes that university innovation centers (PUI) will create a jolt of simplification and stimulate new vocations.

The executive will also create the French Tech Emergence Lab Scholarship, with the support of Bpifrance. The selected projects will come directly from the research laboratories and will receive an envelope of a maximum of 120,000 euros. “We give researchers the means to better imagine and prepare their startup creation project,” says Sylvie Retailleau.

Various other existing mechanisms (deep technology development aid, i-Lab innovation competition, etc.) will also be financially bolstered. Finally, seventeen deeptech pre-maturation/maturation projects will be supported, worth 275 million euros. In total, these measures represent an investment of €500 million and are funded under the France 2030 plan and the research programming law (LPR).

But if private investors don’t take over, deep tech start-ups don’t have a chance to become giants. Seed and Series A projects are certainly getting better funded, but it remains difficult for more mature start-ups to come up with big checks.

train investors

Furthermore, while the potential of deeptech may now be unanimously understood, investors in generalist funds, often from business schools, do not always have the skills to gauge the reach of certain cutting-edge technologies. And, for fear of making a mistake, they usually discard these files.

“We will have to massively recruit and train VCs [experts du capital-risque, NDLR] in deeptech”, argues Xavier Lazarus, doctor in mathematics who directs Elaia. This investment fund has eight PhDs in its ranks and has invested in quantum computing (Alice & Bob), biotechnology (Aqemia), AI (Shift Technology) or semiconductors (Hummink). “We are convinced that deeptech will be as profitable an asset class as the others,” he continues. It is up to researchers to demonstrate this.

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