French VC firm Elaia has today announced the final closing of a €77m deeptech fund in partnership with France’s National Institute for Research in Digital Science and Technology (Inria), a public research body focused on computer science, which also has a startup studio with a goal of creating 100 deeptech startups per year by 2023.
Where will Elaia’s money be spent?
- The fund intends to invest in 30 to 40 pre-seed and seed startups across Europe.
- The fund is open to a few deals outside of Europe, but most deals will be on the continent with the majority of investments in France.
- It will have a specific focus on AI, data science, digital health, cybersecurity, digital infrastructure, enterprise software, industrial IoT and embedded hardware systems.
- Ticket sizes will range from €200k to €2m.
- It's already made 14 investments from the new fund, including in local ecommerce startup Kheops, cardiac imaging company inHeart and healthtech i-Virtual.
- LPs include VINCI Concessions, Inria, Bpifrance, National d’Amorçage 2 (a national French seed fund), Covéa Finance, BNP Paribas, L’Oréal and insurance company Malakoff Humanis.
How does the partnership with Inria work?
- The plan is to commercialise IP coming out of Inria: Elaia will help create companies, matching scientists or researchers from Inria with business people to found companies. This is the case with several of the investments already made.
- Elaia will also invest in other startups that it hasn’t helped create.
- Inria won’t receive any equity in the startups funded by Elaia and the team won’t be involved in investment decisions. There also won’t be anyone from Inria sitting on company boards.
Elaia’s track record
- This is Elaia’s second deeptech-focused fund.
- Elaia also has a €120m fund which invests in tech B2B startups from seed through to Series B.
- The firm currently has offices in Paris, Toulouse, Barcelona and a presence in Belgium and Tel Aviv.
Growing deeptech startups in Europe is a priority as the continent tries to compete with the dominance of the US and China, and things seem to be moving in the right direction. The European Commission has a bold new plan for deeptech startups and the fact that funds like Elaia’s are being raised is a good sign.
But backing early-stage deeptech startups is the easy part. It’s scaling them where Europe falls down. Europe needs more potency at Series B and beyond.
Elaia’s partnership with Inria is also interesting, as it’s rare for traditional VC firms to be directly involved at the research institute or university level. But when it comes to the commercialisation of IP at this level, founders don’t always have the best experience, which is something the Elaia team will need to be wary of.
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Tom Nugent is Sifted’s digital editor. He tweets from @TJNugent92