French deeptech VC Elaia has closed the first €60m of its third seed fund to invest in academic spinoffs and startups born from research.
An early backer of Nasdaq-listed Criteo and French unicorn Mirakl, Elaia hopes to close at €120m by the start of 2025 at the latest.
The French VC likes backing startups that have “a link of any kind with research”, says managing partner Anne-Sophie Carrese. That includes private and public research lab spinoffs, startups founded by researchers and companies that have gone through an incubator linked to a lab or an academic institution.
Elaia can write tickets ranging from €300k to €3m at pre-seed and seed.
Academic partnerships
Since its first deeptech seed fund, which launched in 2017, Elaia’s investment strategy has involved strong partnerships with academic institutions.
The VC teamed up with Paris-based research university PSL for its first fund (of €76m) and with Inria, France’s national institute for research in digital science and technology, for its second fund (of €77m). It renewed its partnerships with both organisations for its third fund — along with signing new deals with (undisclosed) academic institutions in Spain and Germany.
“We now cover research across Europe, which enables us to access more dealflow,” says Carrese.
The partnerships enable Elaia to monitor new projects emerging within research institutions and to provide support and feedback to researchers who are thinking of launching a business.
“We help them… turn a research project into a business use case that could lead to a startup,” says Carrese.
It’s a win for the academic institutions — and for the VC. “When they create that startup, they quite naturally come to us as their first investor,” she adds.
Elaia’s previous funds have backed, for example, quantum computing startup Alice & Bob and biotech company Aqemia — which both came out of PSL’s labs.
Partner institutions have also invested in Elaia’s new fund, alongside institutional investors like banks and insurers, and family offices.
A focus on GenAI
The new fund will focus on companies in the fields of computing, industry and the life sciences. This includes a strong focus on generative AI.
It’s a scene that’s becoming increasingly busy across Europe, with many GenAI startups raising large seed rounds at high valuations. In just six months, France’s Mistral raised just under €500m to a reported €2bn valuation. More recently, Paris-based Adaptive raised a €20m seed round at a €100m valuation.
Carrese says Elaia intends to remain competitive by targeting these companies before they hit the spotlight thanks to its academic partnerships.
“This is where our very small tickets of €300k will be useful,” she says. “We offer very flexible models like non-dilutives, convertible options or SAFEs.” SAFEs provide investors with rights to future equity in the company and are similar to a warranty.
“It’s a very quick tool to deploy that enables us to be on the lookout for anything new and to be part of it very early on,” she adds.
The fund plans to make up to 40 investments over the next five years and has already backed three undisclosed startups.
