Reflets #154 devotes a feature to deeptech. In his introduction, Nicolas Landrin, Executive Director of ESSEC's Entrepreneurship & Innovation Centre, explains how this sector, with its often misunderstood boundaries, will change the world. You have free access to the article...subscribe to read our upcoming issues!  

Reflets Magazine: How can we define deeptech?

Nicolas Landrin: Deeptech covers all so-called disruptive technological innovations based on scientific discoveries, often from public or private research laboratories. This concept of breakthrough is not so much characterised by the discovery or invention in itself, however major it may be, as by its potential for application. A solution is considered deeptech when it offers a response without precedent or equivalent to a major problem and when it opens up new market perspectives. The term can therefore be applied to all sectors, as demonstrated by the activities of ESSEC deeptech entrepreneurs such as Tristan Maurel (E20) in agronomics with Umiami, Hélène Peyro-Saint-Paul (EXEC MBA 99) in healthcare with HalioDx, Philippe Andreucci (E02) in energy with Injectpower, Camille Bouget (M17) in artificial intelligence with Scienta Lab, and Nicolas Heitz (M13) in aerospace with Exotrail, to name but a few. The truth is that we all use deeptech products and services on a daily basis, often without realising it: LEDs, messenger RNA vaccines and 'vegan meat' are just a few examples. 

RM: Given these conditions, what elements converge to make us see deeptech as a homogenous whole?

N. Landrin: Firstly, deeptech players all aim to solve complex global challenges, such as the energy transition or medical advances. Secondly, they take the long-term view needed to move from prototype to industrialisation and large-scale marketing. Thirdly, they build up robust patent portfolios so they can stand out from the competition, create strong barriers to entry, set prices to their advantage or obtain better valuations when raising funds or transferring to a large company.

RM: What is the current state of deeptech in France?

N. Landrin: France is one of the European countries, along with the UK and Germany, which is creating the most deeptech start-ups – 1,500 since 2019! Admittedly, there has been a slowdown over the last two years, but high-potential projects are still finding funding, as shown by the In Extenso Innovation Croissance survey, with which ESSEC and France Angels are associated. Verkor raised a record €2 billion to become the leader in electric batteries. Mistral AI raised €700 million to position itself as a credible alternative to American giants such as Open AI. Not to mention Sipearl, founded by Philippe Notton (EXEC MBA 08), which has raised €100 million to provide Europe with the microprocessors it needs for its supercomputers, and Electra, co-founded by Augustin Derville (E19), which has raised €700 million to roll out its network of fast-charging stations for electric vehicles throughout France and beyond. 

RM: What are France's main strengths in deeptech?

N. Landrin: France has cutting-edge academic research, solid and massive public support, and a fertile collaborative ecosystem between start-ups, laboratories and industry, which makes it particularly easy to get started.

RM: And what are its weaknesses?

N. Landrin: There are still many of them, although they are improving thanks to the government's proactive approach. Researchers, especially young ones, are not sufficiently aware of, interested in or trained to promote their work and set up businesses. Its ability to industrialise and attract private capital does not compare favourably with the United States and China, or even with Israel, Korea or Japan – in this respect, there is often a difference of a factor of 5 to 10 between Europe and these countries. Lastly, France's big companies need to learn how to work better with deeptech start-ups and find the funding to buy them out at market price to compete with our international rivals, who are more used to paying high prices for technologies of the future, so that they can scale up!

RM: What about the European Union's role?

N. Landrin: Mario Draghi's recent report on Europe's competitiveness is unequivocal. I quote: 'The problem is not that Europe lacks ideas or ambition (...) but that innovation is blocked at the next stage: we are failing to translate innovation into commercialisation.' This observation is especially applicable to deeptech. The stakes are existential: the future of our industries and jobs is at stake, as well as our public health, sovereignty and defence, since many of the technologies concerned have both civilian and military applications, such as drones and artificial intelligence. However, the European Union has already begun to react by launching schemes such as Horizon Europe, which aims to harmonise funding and partnerships between Member States in this area. 

RM: Why are France's competitors ahead of us?

N. Landrin: The United States and China are benefiting from colossal investments and more direct access to world markets. The UK has an extremely effective system for creating start-ups, particularly in Cambridge and Oxford, and a network of venture capitalists and business angels that is unrivalled in Europe. Germany has a strong industrial culture, both in its universities and among investors, and its industry players are used to working with start-ups. Switzerland also benefits from one of the world's most successful ecosystems around its universities in Zurich and Lausanne.

RM: Is France succeeding in retaining its deeptech talent?

N. Landrin: France, like other countries, has always faced a talent drain – which is not a problem in itself, insofar as this phenomenon exposes some of our best brains to other environments and gives them a global vision of the industries in which they work. On the other hand, we need to encourage them to come back! And attract the best foreign talent to come here, as well. The 'French Tech Visa', a simplified procedure dedicated to tech players, fulfils this function well.

RM: What are France's prospects in the deeptech sector?

N. Landrin: France needs to address four major problems. Firstly, bring in talent at every stage in the life of a start-up, among founders and employees, but also on boards of directors and advisory boards. Secondly, increase the number and size of dedicated venture capital funds, including 'growth' funds that are large enough to support major fund-raising campaigns. Thirdly, expand public procurement for deeptech start-ups, as the Americans are doing with their Small Business Act. Finally, improve cooperation between start-ups and large companies and increase acquisitions of start-ups by large companies, at the same level of valuation as that offered by international competitors. 

RM: More generally, what are the prospects for deeptech worldwide in the years ahead?

Interview by Louis Armengaud Wurmser (E10), Content Manager at ESSEC Alumni 

Translation of an excerpt of an article published in Reflets Magazine #154. Get the next issues (in French)