Unveiling our first months of dealflow Paris-Saclay Seed Fund

By Partech Ventures

In Southern Île-de-France, the University Paris-Saclay cluster gathers a large part of the top French Engineering and Business Schools, Universities and deeptech labs. More than 60,000 students and 10,000 researchers are swarming there in an excellence dynamics that produced 2 Nobel Prizes and educated leaders for a lot of major companies in Europe.

The ecosystem has long ridden the wave of entrepreneurship and millennial students, and Paris-Saclay Seed Fund (PSSF) was launched in January as a original initiative to support the most promising startups emerging from this leading research & innovation cluster.

With the eyes of two seasoned VC firms — Partech Ventures and Kurma Partners — we’ve started to look at hundreds of potential seed investments over the last months. After half a year working hard with our partners and meeting impressive young tech entrepreneurs, we must say we are very proud of our first four portfolio start-ups so far.

- DAMAE Medical has developed an innovative technology providing dermatologists with new in vivo imaging modality capable of producing in-depth images of the tissue. They’re from HEC Paris, IOGS and CNRS.

- DESTYGO was founded by HEC and Polytechnique alumni and provides an artificial intelligence technology made to create, deploy and develop chatbots adapted to travel, tourism and urban mobility.

- HOSTNFLY is a Private Rental management company that guarantees a revenue to home owners, optimizes rental prices thanks to its advanced machine learning algorithms and then takes care of all aspects of the relationship and on-boarding of guests. It was founded by CentraleSupélec alumni.

- SENSOME develops a breakthrough remote monitoring technology that can turn invasive vascular medical devices into connected healthcare devices. The startup was founded by a Polytechnique alumni and supported by the school’s incubator.

But we wanted to share more with you. These four investments are the result of a wide screening and sourcing of more than 400 start-ups, and we believe that review of this first months dealflow gives a really good taste of this breeding ground for tech start-up. It shows how promising and deeptech-powered the early-stage companies from this area are.

We’re happy to confirm that PSSF kept its promises: we meet highly prepared and sharp teams, supported by relevant structures and environments, with serious ambitions and wise strategies. And most of all, we think we’re meeting the future of deeply innovative entrepreneurship.

1 — Entrepreneurship starts with a team, and Paris-Saclay is no exception to this rule

PSSF focuses on start-ups from the University Paris-Saclay cluster but this refers to many different situations that are worth analyzing.

It must be said that incubators, accelerators and startup programs, etc. are playing an essential role in the ecosystem fertility in terms of tech projects (27,5%), and that concrete tech transfer situations (10,5%) also occupy a rightful place given the volume of freshly graduate young entrepreneurs.

Plus, we observe that 15,4% of the start-ups we saw are tied to more than one member institutions of University Paris-Saclay, showing perfectible but already functioning synergies.

But the major information is that in more than 75% of the cases, it’s about the founders. We also see quite often that the whole team comes from the same Business or Engineering Grande Ecole. A typical situation is when the founders met in one of the various Entrepreneurship programs.

The most interesting projects are the ones from cross-programs and cross-cursus founders, as we seek complementary and skilled teams. University Paris-Saclay has this promising capacity to mix competencies, and to give birth to strong teams such as Damae’s, Hosntfly’s or Destygo’s.

2 — Paris-Saclay entrepreneurship mostly remains in Paris or Paris-Saclay

We know that the Silicon Valley is fond of French brains from top Grandes Ecoles and Universities and the alumni’s international mobility allows us to have an international scope. Partech Ventures has a European-American network and 3 US-based partners, which greatly helps.

For now however our dealflow is mostly composed of French-based companies and more precisely Saclay-based and Paris-based ones.

Two main reasons here :

- We’ve been focusing on the most obvious sources of dealflow and University Paris-Saclay’s entrepreneurs abroad are still to be reached — if you’re reading this and if you’re concerned, feel free to contact us! 
- More importantly, the Paris area and especially the Paris-Saclay cluster offers really good conditions for early-stage tech start-ups and a majority of the tech projects PSSF is looking at are staying home.

3 — B2B is the predominant orientation in our dealflow, and that’s what we were looking for

Launching a “Campus fund” and targeting young entrepreneurs sometimes still in class could be seen as risky. But we’re not dealing with juvenile and student-centric projects: the split between B2B and B2C shows a majority of business-focused companies.

An explanation to this is that the start-ups born in Paris-Saclay are really into deeptech applications. We also observe that companies are mostly tackling well-defined markets, and very often that founders have sharp insider intuitions despite their young age.

4. University Paris-Saclay gives birth to a wide range of high quality tech project

Even if we have a logical amount of low-tech projects in our dealflow, the volume and diversity of deeptech companies is really impressive and proves that University Paris-Saclay is a leading tech cluster in many domains. In any case, tech-based companies are the ones we’re focusing on and we mechanically turn down most of the others.

Artificial Intelligence is the most represented deeptech category in our first 6 months dealflow, and this applies to the companies we’ve already funded — all four are using machine learning in their solutions.

This info is worth considering because it’s a sign of a global wave in early-stage innovations in many sectors,as well as a sign of France (represented here by University Paris-Saclay) being amongst the pioneers when it comes to AI.

5. Our vision for the future

French deeptech dynamism is enjoying healthy momentum with both entrepreneurship and innovation, and we hope we succeeded in convincing you that the Paris-Saclay ecosystem is definitely one the most reliable spearheads in this domain.

Amongst our investors we have tech entrepreneurs, Business Angels and alumni from one of the cluster’s school. Everyone of them joined us to be part of this thrilling initiative and to help the most promising companies.

We also rely on 9 corporates investors — Orange, RATP, Groupama, JC Decaux, Chanel, BNP, Econocom, EDF and Société Générale — which want to support. As previously mentioned, we connect them with the start-ups we meet to catalyze the synergies. So far we’ve done more than 150 go-betweens and organize two pitch sessions called Saclay Crunches.

The Paris-Saclay Seed Fund is €50M in size and we want to continue to support the best tech entrepreneurs within this wave, and to help this promising French Label to grow worldwide. We aim to make one investment per month over the next two years, and to help University Paris-Saclay rival the best innovation clusters in the world.

To be continued…