France has become increasingly focused on 2 important pillars for the French Tech ecosystem: Deep Tech and Tech For Good. But what happens when these two themes intersect?
That was the subject of a recent discussion at the French Tech edition of Sesamers On Tour. The featured speakers included Benjamin Joffe, a partner at SOSV, which is a global early-stage fund that is focused on deep tech; Alexandre Tisserant, CEO of Kineis, which is democratizing access to satellite connectivity to connects millions of objects simply and cheaply anywhere on the planet; and moderator Sarah Pedroza, COO of Hello Tomorrow, a global organization that is aiming at accelerating deep tech solutions that tackle worldwide issues.
Joffe explained that SOSV is a global fund that invests in France, the U.S. & Asia. It has about 1,000 companies in its portfolio and he estimated that about half fall into the deep tech category. A smaller subset of that group could be described as, "Deep Tech For Good," he said.
SOSV runs accelerator programs as entry points where the firm supports startups at the very earliest stages in the hardware and biology spaces. Programs include Hacks for Hardware and Indiebio. "We help them do this very difficult step from going from the lab to prototype to market," Joffe said.
The firm doesn't attempt to cover the full spectrum of deep tech. Instead, it focuses on areas such as mobility, energy, and food. "There are some sectors in which we feel we don't have enough knowledge or we don't have enough capabilities to actually support the companies," Joffe said.
Joffe said that most founders in deep tech come from a research or science background, and so their motivation tends to be with the technologies they have been researching for years. At some point, those founders have to choose what kind of impact they want to have with those technologies: positive, neutral, or negative.
"I think these days it has become really difficult to finance negative things," Joffe said. "But in terms of how positive things should be, the challenge is to figure out what should be the first applications. Generally, you have a lot of choices for technologies and what you can do with them. And sometimes the one that has the most long-term impact is not the easiest to start with."
To overcome that hurdle, founders look for pragmatic ways to test their technology with markets that have early adopters who can finance the development until it's ready to reach larger markets. The good news is that the markets do indeed seem to be expanding.
"What's mattering a lot in deep tech, and in particular Deep Tech for Good, is the growing public interest," Joffe said. "That public interest means that there are customers that are more ready to pay for novel solutions. There are corporates that feel that they have to incorporate those into their offering. And the limited partners that invest in VC funds like ours also feel that they have to be paying more attention to the impact of the innovations they finance indirectly. So those are all really good signs."
But having a good mission is one thing. Scaling a Deep Tech For Good is another. Joffe said while he's optimistic that barriers are falling for Deep Tech businesses to scale, this remains one of the most fundamental challenges.
Alexandre Tisserant, CEO of Kineis, said his space tech company is now confronting that scaling challenge.
Kineis was created in 2019 by CNES (the French Space Agency) and CLS (Collecte Localisation Satellites) which specializes in processing satellite data. That data is used via the ARGOS System primarily for environmental monitoring and resource management.
Kineis inherited the ARGOS System, which means it had Deep Tech For Good baked into its DNA. The firm has raised €100 million from public and private investors to help expand its low-earth satellite network. The company has 20,000 devices connected to its satellites and plans to launch 25 new nano satellites.
"Our ambition is to be able to connect anything, anywhere on the globe with cheap, small autonomous devices," Tisserant said.
Tisserant said the company is still tracking birds, polar bears, penguins, and other wild animals. This allows researchers to gather information on animal behavior as well as collect evidence of climate change. Kineis also tracks fishing boats to help institutions and governments to monitor the quantity of fish caught to ensure the resources in fish will be still enough in the coming years and decades.
But as it commercializes the service, Kineis must choose among different opportunities and weigh the impact of each one. And when speaking with potential commercial partners, Tisserant said it's not always easy to understand the impact.
"It's not an easy process because when you say, okay, no I will not accept revenues, it's kind of hard to justify to your shareholders," he said.
That's why he believes the public sector has to continue playing an essential role in funding and encouraging the creation of Deep Tech For Good startups. Not only do public sector agencies have expertise that allows them to understand the potential for such technologies, but they don't necessarily need immediate financial returns.
That said, Deep Tech For Good companies still must make those tough commercial choices in search of a sustainable model. Tisserant advised entrepreneurs in this sector to stay true to their mission. Don't "forget what drove you in the first place to this project," he said. "When entrepreneurs start companies and make them grow, they have something in the guts that pulls them and that gives them all that necessary energy to grow and to do the business. At some point, you will always have pressure on one side pressure or the other side to do the things that you don't want to. You have to resist the pressure, or at least play with it in a way that is good for you and that you are comfortable with."
The Long Road Ahead
Joffe said another big challenge for these startups includes having a long, tough road, more so than most startups. They also must combine the skills of a lot of different people while trying to get a product to market.
"I think one of the challenges, in addition to finding financial capital, is also finding the intellectual capital very early on, that will help you identify markets that maybe you might not be familiar with, and also identify the right milestones. Sometimes the tendency for scientists and engineers is to pursue mostly technical milestones. But those are not necessarily the ones that are a good fit for the next funding round. So I'd say keep in mind that it's not just capital. It's really also about having a broad view of the sectors you could be playing in."
To work through that, Joffe advises founders to surround themselves with people who will help them learn. One way to do that is to connect with other founders to exchange information and experiences.
"In some sectors, it's actually not that easy to find people you can exchange information," Joffe said. "Sometimes you can find them in France and sometimes you need to find them somewhere else. It's always good to be inspired by public figures and heroes like Steve Jobs on Elon Musk. But the people who can actually give you advice that immediately is useful are generally people who have done what you're trying to do."