Financing deep tech - a challenge taken up by BNP Paribas at « Hello Tomorrow »
23.12.2021 | Innovation
The 7th edition of the Hello Tomorrow Global Summit, an event dedicated to deep tech innovations supported by BNP Paribas as global partner, was held on 2 and 3 December in Paris. An opportunity to take another look at the investment and financing issues of these specific players.
Build a more sustainable world thanks to deep tech? This is what drives all the participants of the Hello Tomorrow Global Summit. Industrial leaders, 800 start-ups, incubators and accelerators, investors, media, researchers and academics were able to discuss different themes: food, energy transition, regenerative industries and materials, smart mobility and even space exploration.
A booming sector
In 2020, deep tech represented around $ 60 billion in investments worldwide, up from $ 15 billion five years earlier. According to a recent report by Hello Tomorrow and the Boston Consulting Group, that amount could exceed $ 140 billion by 2025..
"Deep tech is characterised by disruptive technologies resulting from scientific research. Bringing a product or a service to the market requires long development periods. Deep tech start-ups spend significant amounts of time on R&D, with growing capital requirements just for moving from the laboratory to the prototype then to an industrial demo, and finally to the plant as such", explains Dorothée Julliand, Director of WAI (We are Innovation) by BNP Paribas .
France has taken the full measure of the situation: deep tech already involves 1,700 start-ups, or 10% of French start-ups. To reindustrialise the country, the France 2030 recovery plan relies heavily on these technological champions, which Bpifrance is supporting through the launch in September 2021 of a dedicated platform to promote networking between researchers, entrepreneurs and investors, in particular.
Deep tech needs high levels of financing
To make a difference, these players need specific financing: “The challenge here is to mobilise substantial resources because there is a high capital intensity over time, since we have a longer time to market” according to Xavier Chopard, Head of Innovation & Digital Marketing Transformation Corporate Banking, BNP Paribas French Retail Banking.
During the roundtable “Financing the future”, Suzanne Fletcher, General Partner at Prime Movers Lab, underlined: “There’s still a dearth of investors when an opportunity is not only financial but also an opportunity to invest with an impact”. Kerry Baldwin, Managing Partner at IQ Capital, added: “We have the capacity to create disrupting innovations: more funding would make the difference.” The global venture capital firm SOSV, represented by Sean O’Sullivan, Managing General Partner and Founder, is a fine example of the investor to follow: every year, it supports 150 start-ups so that their ideas emerge and cause positive change.
BNP Paribas offers specific support to deep tech
“For BNP Paribas, sustainable development is important. It is closely linked to new technologies: deep tech and sustainable development are mutual allies”, explains Pierre Rousseau, Strategic Advisor Sustainable Business at BNP Paribas. BNP Paribas’ long-standing support for Hello Tomorrow demonstrates the Group’s interest in this innovative community.Being alongside this community also means considering the opportunities to create dedicated funds, as has been done with the Solar Impulse Foundation and the Cleantech fund. An idea that is gaining ground among the founders of Hello Tomorrow, BNP Paribas Personal Investors, BNP Paribas Cardif and Investment & Protection Services.
Finally, to guarantee BNP Paribas’ leadership in the medium term, it is essential to be a stakeholder in this ecosystem. Several entities, such as Personal Finance, BNP Paribas Cardif, BNP Paribas CIB and BNP Paribas Real Estate, closely follow developments in deep tech to better anticipate technological breakthroughs in the banking sector.
"These start-ups require high levels of financing, repeatedly, over cycles of almost 10 years. This therefore involves a long-term relationship of trust. They can bring out efficient models in many fields: AgriTech, FoodTech, Biotech, Robotics & IoT, GreenTech or even digital. Their main issue is equity, where we are positioned through funds. We also provide leverage with financing and offer them relevant solutions through our leasing offer, as well as our expertise on IPOs via Portzamparc" explains Alix Gasnal, Business Innovation Manager, Lyon Métropole Business Center, BNP Paribas French Retail Banking.
BNP Paribas at the Hello Tomorrow Summit
In addition to the talk given by Pierre Rousseau, two experts from BNP Paribas spoke at the Global Summit: Olivier Warnan, Investment Director, who shared his investment experience in cleantech VC, and Rim Tehraoui, Group Chief Data Officer & Global ESG Risks Executive, who recalled the positive role of AI in managing a positive impact.
BNP Paribas was also present with a stand, alongside the start-ups supported by the Group, such as: Synapse, Mecaware and BeFC Bioenzymatic Fuel Cells, or Woodlight and FinX.
Renaud Dumora, Deputy CEO of BNP Paribas, Investment & Protection Services, presented the Grand Prize of the 7th edition of the international Deep Tech start-up competition to Atlant3D Nanosystems, a Danish company that has developed a nanoscale 3D printing technology.