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Last Thursday at Berlin’s Radialsystem — an arts centre in an old pumping station next to the River Spree — dozens of academics took to the stage to pitch companies created from their research.
They were there as part of Stage Two, an annual spinout event put on by RWTH Aachen University and HHL Leipzig Graduate School of Management that brings together tech transfer offices, academic founders, corporates and deeptech VCs from some of Europe’s most notable firms. IQ Capital was there, so too were High-Tech Gründerfonds, Earlybird and UVC.
Everyone who took to the stage looked dead clever. And they’re working on things that are the result of heaps of hours spent in labs across the continent.
A couple of themes stood out from the pitches. One was tech that could be used to make drones more efficient. GaltTec — spun out of the University of Tartu in Estonia — is making microtubular solid oxide fuel cells for drones, off-grid equipment and portable devices. It’s targeting drone manufacturers as its first market, with the aim of longer uninterrupted flight times and lower upkeep costs. There was also SunCubes — from Politecnico di Milano in Italy — which has developed a laser-emitting generator and receiver system for wireless charging. Its use cases include re-charging drones during flight.
Other academics who pitched are using their brains to work on flood prevention and risk, pertinent given the devastation caused by flooding in central Europe in September, and more recently in Spain; last week flash floods in the east of the country killed more than 150 people.
Riverkin, a spinout from ETH Zurich in Switzerland, has developed sensors that can measure the health of river systems and spot changes that could indicate a risk of flooding or pollution. Another company, FloodWaive — a spinout from RWTH Aachen — has developed an AI model that acts as a real-time early warning system for flooding risk.
$1bn IP
The companies on stage show why investors have been paying more attention to university spinouts in recent years.
One VC at the event told me they believe the next generation of European unicorns will be founded on rich IP — compared to the last decade or so which has seen software-based fintechs like Revolut and Klarna and mobility giant Bolt become household names on the continent.
Another investor told me the vast networks academics often build while researching and before spinning out can help them find partners for pilot projects or early strategic backers. That’s rare for founders at such an early stage, they added, and attractive to investors.
What’s still missing at the early stage?
One investor told me cap tables can still be a mess. Historically, one big complaint within the tech transfer space has been that universities take too much equity in their spinouts. But this investor said they’ve also seen cases where the principal investigator (PI) — the person in charge of a research project — doesn’t want any involvement in the day-to-day running of the company but still takes a high amount of equity; that’s not ideal, they said.
We also have a lot of great research in Europe, but not enough people who know how to make money from it, another investor told me. There’s more need for sales-minded operators who also get the science — whether academic founders who have commercial nous, or someone external who can be brought in.
One attendee said in Germany they see a big need for more education around entrepreneurship as a viable career path. There are still just two career paths typically presented to students, they said: one is to join an established corporation, and the other is to continue in academia. We also need to become a lot more comfortable with the risk-taking involved in starting a company, they said.
Readers, I want to hear more about what’s going on with tech transfer on the continent. Which countries are worth paying attention to? VCs, which universities are giving you the most dealflow? And do you believe you can find your next fund returner from one of the top research labs in Europe?
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Read the orginal article: https://sifted.eu/articles/investors-scour-europes-universities-for-the-next-unicorn/
