Paris-based deeptech investor Omnes Capital, which has backed big European defence and space startups like drones company Quantum Systems and space craft maker The Exploration Company, has raised €112m in a first close of its second deeptech fund.
Omnes aims to raise a total of €200m by this time next year. The new funding comes from LPs including institutional backers Bpifrance, France 2030, the European Investment Fund via its InvestEU programme’s defence mandate, BNP Paribas, Crédit Agricole Assurances and several family offices.
The firm will invest in up to 25 startups at the early growth stage — which managing partner Michel de Lempdes defines as companies who already have revenue and/or an order backlog and have profitability in their sights in the next 24 months. Omnes Capital will also reserve a good chunk of the funding for follow-ons: for every euro they invest, the plan is to reserve at least one euro for further investment, de Lempdes tells Sifted.
Omnes Capital is on the captables of a number of Europe’s buzziest defence tech and spacetech startups, including German drones unicorn Quantum Systems, German autonomous vehicles startup ARX Robotics, German fusion energy company Proxima Fusion and Franco-German spacetech The Exploration Company.
The ‘new asset class’
According to de Lempdes, “deeptech is really a new asset class.” He’s seeing more and more LPs moving into deeptech.
Defence in particular is hot, and Omnes Capital is looking at doing more deals in the space — including a recent bet on ARX Robotics.
Omnes Capital is eyeing startups in cybersecurity, new space and quantum. In particular the firm likes dual use startups, as well as those with a direct relationship to the government customer: “We don’t want to invest in companies selling to these big, large corporations like Airbus, Thales” because they take a chunk of the margins, says de Lempdes.
But he’s clear: “We are not a defence fund.” De Lempdes senses a bubble forming, and “if everybody starts to talk about defence, it’s because it’s too late” — which is why they’re approaching it with caution.
Outside of defence, the firm is looking into things like nuclear fusion, decarbonisation and AI for industrial use cases.
Deeptech challenges
Despite the frenzy around deeptech, the fundraise wasn’t easy: “Market conditions are tough,” de Lempdes says, adding that LPs are “much more cautious” than they’ve been previously. It took Omnes Capital one year to raise the first close, he says.
Within deeptech specifically, de Lempdes says the main challenges are the scarcity of growth capital as well as the general lack of public orders from governments. For startups, “public orders are increasing, but slowly.”
The firm doesn’t just invest in VC-backed startups; it also invests in private equity, focusing on the energy transition and deeptech with €6.7bn in assets under management. Omnes Capital was originally part of French bank Crédit Lyonnais in 1999, and then became a part of Crédit Agricole. It spun out as an independent firm in 2012. Its first deeptech fund was €130m launched in 2020.
Read the orginal article: https://sifted.eu/articles/omnes-capital-deeptech-fund/
