E525 | Jean Schmitt (Jolt Capital ) & Rob Blackie (Crampton Blackie): The State of RNA in Europe & the TechBio Opportunity

0:00Europe invented the science behind RNA breakthroughs. So why are our companies fleeing to scale elsewhere? Only 12 % of the investment in RNA globally last year came to Europe. An RNA company in Europe is getting one-tenth of the investment that its North American counterparts would get. The numbers tell a brutal story, but the real killer isn't just money. It's the maze we've built ourselves. Europe is a set of countries with different cultures, different barriers. Everything's different. So when you want to sell from one country to another, we created a hell to do business across Europe instead of heaven.

0:36Yet the fix isn't complex. It's right in front of us. There is a fast track to whatever is biocontrol. And that fast track will allow companies to open the file within the next three months, not five years. Because we've been here before and paid the price. We invented GSM in France, by the way. And guess what? A few years later, we pay 15 % royalties to Qualcomm and now to Chinese. Does it make any sense? This time, we can choose differently. So we have great R &D. We have cheaper workforce. So we can scale those companies in Europe. So we don't want to lose them. We can scale them here. We need to keep them on board.

1:17How do we stop the exodus and keep RNA innovation where it belongs? Join us for an urgent conversation with Gene Schmidt from Jolt Capital and Rob Blackie from Crampton Blackie as they reveal what's silently pushing Europe's world-class RNA innovators to scale everywhere except Europe and the concrete steps that could change everything.

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4:11Let's start acting. This show is not investment advice and the hosts of this episode may be invested in the funds and companies featured. Welcome back to another UVC episode. We hope you know by now that this is the go-to place for connecting and championing European venture. Today, we have an episode where we're zeroing in on a topic that sits right at the crossroads of science, tech, and sovereignty, which is RNA. Our mission, as you know, is to make European venture stronger, are more globally competitive and more independent. And few fields better illustrate both the promise and peril of our ecosystem than RNA, which I am looking forward to dive into because I'm doing actually a small gathering, an unconference for people in tech bio here in June.

4:58So I'm looking forward to dive into this. Joining us today are the authors of the landmark report, State of RNA in Europe 2025, Sean Schmidt from Jolt Capital and Rob Crampton from Crampton Blackie. Together, they've mapped the company's patents, funding gaps, and policy hurdles defining Europe's RNA trajectory. So I am trying to buckle up here. I hope you'll do the same. And now I'll turn the mic over to Rob and Sean to tell us a bit about themselves, as well as take us into the report. Okay, so Sean, so I'm running an investment firm, Jolt Capital, which is investing in growth stage companies in deep tech across Europe.

5:34And of course, RNA is among the different domains we're exploring, even if you don't do biotech. So surprisingly, we don't do biotech and we're interested in RNA just because there are many applications in synthetic biology, which are within our scope of investments. So we are very interested about that domain. And that's the reason why we were excited to explore that domain with Rob. And then we'll explain how we dig into the domain and how we found a kind of great set of data which is explaining the dynamic of the market and what we can expect or not in Europe from RNA. Hi, I'm Rob Blackie. I'm from Crampton, Blackie, one of the founders of it.

6:18we help investors, innovators to explain what they do to investors, because often people who are deep global experts in something like RNA find it very complicated to explain what they do to an investor, to simplify it for the investor. And we've worked with a number of RNA companies, including Greenlight Biosciences, who we helped to IPO as a unicorn in 2022. So we were involved report because often we are working as RNA companies on exactly their struggle of raising enough capital to be successful. With that introduction, let's get right into it. First and foremost, why do you think it's worthwhile at this time to do a report on the state of RNA in Europe?

7:05RNA is potentially an incredibly powerful technology. We've seen it with the COVID vaccines. They were a critical part to ending the pandemic. But also we've potentially seen it for things like treating cancer, genetic illnesses, and actually creating more environmental pesticides to work in agriculture. It gets around many of the problems of traditional pesticides. So it's potentially an incredibly powerful industry for Europe. And it's an industry where many of the global leaders are from Europe and a lot of researchers come from Europe. So I think the big question for us was, is the industry being as successful as it could be?

7:46And if it's not, what can we do to make it more successful? Yeah, it's RNA just to, because I want to look like a nerd a little bit here. So, you know, it's this ribonucleide acid, which is RNA. This is a molecule which is completely central in any living body. So living beings, human beings, animals, plants, but whatever is alive is using in various cellular processes is using RNA. So that's what is exciting. It's all over the place and it is something we can exploit in a proper way. And there are many discoveries going on still, but we already know that you have this very famous mRNA, which everybody talked about for good or bad, hated and loved it and whatever.

8:34But mRNA had been something which had been around for a while, underused, and we all understood now that the market potential, the benefits for human beings were huge and completely underexploited for no good reason. So now, what about tRNA or what about rRNA? What about other type of regulatory RNA? So there are plenty of ways to use RNA, and then you have the applications in different vaccines, as you discussed. in interference for doing other things by using synthetic RNA. And yeah, it's a vibrant domain in which we cannot not participate because it is in the middle of whatever is alive. So, and the applications are huge.

9:23So we will discuss that. Some would say that this is a classic case of the invent here, scale elsewhere syndrome. So we're lacking in commercialization in Europe. Do you agree with this perspective? Is this part of your core push when doing this report that this is truly where we need to increase our focus and our capability? We invented a lot here and we do have an incredible research in those domains. Our issue in Europe had never been to invent. We had been extremely good at inventing in all domains. And as a gross capital in deep tech investors, we see plenty of incredible inventions. Our issue is not there.

10:04Europe is not one country. Europe is a set of countries with different cultures, different barriers, different, everything is different. So when you want to sell from one country to another, and we will talk about regulation, even if we have a European level regulation, we still have a per country regulation as well. So we created a hell to do business across Europe instead of a heaven. So bottom line, we keep inventing because we have fantastic research, but we give it away to people who have countries with critical mass and less barriers. And here, China, USA, soon India, those guys have very large markets in which a company can thrive without having to deal with a complicated fragmentation.

10:51If you look at our playbook, we developed this playbook on how to create a global company from Europe compared to how to create a company, a large company from the US. In the US, you stay in the US, you ignore Europe, and you can become very big already. In Europe, if you're born in a European country, your playbook is very different. You need to grow a little bit in your small country, France, Germany, whatever, even smaller ones. and then you grow with the neighboring countries, then you need to go to Asia first in order to get big enough. And when you are big enough, you go only selling your product to the US.

11:32Otherwise, you end up selling yourself to the US. So the playbook is different and the discipline you need to develop is a much higher level of discipline than what you would have to do for developing the same company in the US. The research is not the issue. The issue is the playbook on how to go from pure research to a large company, being in a very small country, which is the country you're born in, and in a fragmentation place, which is Europe. And many other places have the same issue, by the way. You go to Japan, you go to Korea, you go to Canada, it's even worse because they don't have Europe.

12:11They have just themselves. So those guys are looking at one country which managed that in a special way, which is Israel. Israel, you start in Israel, you sell to the U.S., this is a business model. It's frustrating, but it is what it is. Before we go into the playbook and the later stages, so to say, of the company development and the issues slash opportunities that are there, let's just talk a bit about and double click on the science and the IP landscape. So if we talk about the raw assets, what does the European RNA company landscape look like in terms of numbers and focus areas? All we found in research was over 750 RNA companies in Europe.

12:55So there's a lot of companies in Europe. It's about just under one third of the global total. And they are issuing a hold about one quarter of the global patents. So they're major players. and this is an expertise that is all across Europe. There is some level of RNA expertise in almost every European country. I think what's interesting, though, is that one of the things that is helping a little bit is it is possible to get bigger, particularly from Western Europe, because there are these big research hubs in Western Europe in particular. We also see that, particularly in Paris, which I think has five of the leading academic research hubs, in Europe.

13:39And on startups, and I think this will be a familiar story to many people who know about European technology, Britain has tended to be the startup hub of Europe. And I think it was a bit of a surprise for us, perhaps for RNA, because traditionally, Britain hasn't been seen as an RNA leader quite so much as Germany or France. But actually, it appears that maybe some of the French entrepreneurs are going up the Eurostar to form their companies. In fact, if we look at the Eurostar as a corridor, there's an extraordinary number of successful R &A companies in or close to the Eurostar route. Places like Cologne and Utrecht, Namur, Charleroi, Brighton, as well as the obvious bigger cities like Amsterdam, Brussels, London, and Paris.

14:29And so I think that's one of the things that Europe is helping with. It is easier for people to move around Europe. I would also say, I think it's quite interesting that London has really become such a huge startup hub for Europe. In Britain, everything is very centralized in London for startups. While in Germany, wherever there are a very large number of startups, they are spread much more evenly across the country with no one particular area dominating. So I think it was quite a vibrant research industry, but also startup industry for RNA. I think the challenge they face is that commercialization challenge.

15:08And so there's a really interesting research that was pulled out by Jolt. Also, only 12 % of the investment in RNA globally last year came to Europe. And that really affects the companies because it means that in the early stages after a company is formed, an RNA company in Europe is getting one-tenth of the investment that its North American counterparts would get. And that obviously slows down the rate at which they can commercialize and be successful. And one of the implications of that we can see is that among the top patents for RNA, Europe is holding fewer and fewer of them. So in 2010, it was around 20%.

15:53Today, it's closer to 10%. So the proportion of those top patents that are really going to change the world held by Europeans is falling over time. And that is fairly obviously a result of not enough investment. Just perhaps giving a few words about where this data is coming from, because, you know, over the last 10 years, we put together this engine called Old Ninja, which is an AI engine crunching the web day and night, discovering companies or something like at the pace of one new company discovered on the web per minute. And this system is an AI engine investigating on each company on the IP, the relationship with investors, the people, the relationship with large corporates and so on.

16:37So that database now is like 5 million companies which had been analyzed and which had been cleaned up. So when you ask about RNA, you can classify the different applications of RNA and find companies. So what we have is data here is very reliable. I think it is the largest database you would ever see in technology companies today. Here, the idea we had with our friends was to put that together and kind of have a picture of RNA. So the dynamics you see here is actually pretty clear, pretty sure as well, confirmed by other sources as well. and it is shocking to see that Europe, not only Europe is not seeing the opportunity in terms of funding and here if you see that on that graph, you see that Asia is actually growing very fast in proportion of what is backed and Europe is shrinking from 2014 to 2023.

17:41Our proportion of deals and an amount of money investing is decreasing, which is problematic. And as you underlined, it's not a question of research centers. It's really a question of trust in research. So why that is something which we need to address at a point. Could you tell me a bit about the sectors in which you have seen the main activity happen in RNA, if we think both about what we're seeing globally and then where we're seeing European hallmarks of strength? When you look overall in RNA, you have different types of applications. Some are very obvious. Of course, most of the applications are in healthcare and biopharma.

18:26So it's a building block of life. So when you are very concerned about our bodies so clearly, and you are very concerned about how to address ourselves and especially when you look at cancer, this is starting there. So you really are very concerned about therapeutics, vaccines, diagnosis a little bit less. And one domain which is important is mechanism of delivery. So how to deliver a drug, exploiting RNA. So this represents probably 80 % of the world projects on RNA. Now, there is one domain which we forget all the time, but which is very big, which is agriculture. It's not big enough, but it's quite big.

19:10So agriculture, here you are looking about all sorts of bioregulation, biopesticide, eventually genetic improvements. But, you know, this is not very popular, but biopesticide should be much more popular. Typically, you would change some types of algaes and in order to give them some specific properties where they would express some specific new molecules which you need. It's a crop protection as well. So those applications are massive and they have massive implications as well. And here there is little investment done in those domains today, but there are massive implications. And we can probably explain also the why those non-massive ones.

19:58The last one, chemistry, is much, much, much smaller because this is reserved for very large industries. But we can call that synthetic biology. You know, you want to create, engineer some novel biological circuits and systems, sensors. You can do things which are very special with synthetic RNA. So those domains are very special in synthetic biology. but agriculture would be a very large domain. Healthcare and biopharma would be 80 % of the entire business. Just to chip in on agriculture, one of the good things about agriculture is it is much cheaper to develop a product in agriculture than in human-facing biotech because it's actually relatively cheap to make agricultural-grade RNA.

20:50so it's much much simpler to do the testing than it would be for human facing things and the technology is absolutely fascinating the first product of agricultural rna was released by green light biosciences just over a year ago and it protects potatoes from the colorado potato beetle which if you're a potato farmer is the main biggest problem you have and it does this in a really clever way, it targets a gene that only exists in the Colorado potato beetle. So any other creature could consume this and it would have no impact. But in the Colorado potato beetle, it basically creates a form of terminal constipation.

21:31So really the beetle feels a bit unwell and it stops eating and that interrupts its breeding cycle. And that means you don't have as many potatoes or potato plants eaten by the beetle. And this is a phenomenal technology compared to traditional pesticides because it only affects the target insect. So most traditional pesticides, you spray them on a field and they're carpet bombing the field and they're killing all the insects in the field, even all the good insects that you want to exist. This only affects that target insect and it also then breaks down in the environment in a few days. And that's because because RNA is everywhere in nature.

22:14If you put a bit of RNA on a table or anywhere in the world, instantly bacteria are going to get to work eating it because everything eats RNA. And so those two things put together make it a very interesting piece of technology for improving things. Now, the first product was approved in America for Colorado potato beetle just over a year and a half ago. Ukraine has also approved it as well because they obviously have a very big potato industry. And the second product that is coming along protects bees from a parasite that kills them. So if you have a beehive in your garden, often the most common thing that would kill the honeybees is something called the Varroa destructomite.

22:58And the RNA is now being used as a medicine to protect those bees. The question we can ask ourselves, and we discussed that multiple times with Rob, is, hey, how don't we have much, much more industries around RNA for agriculture since it works so well? And it works in so many applications. And of course, dairy targeted means that we don't have collateral damages, as you mentioned. So the reason is that we are killing ourselves in Europe on regulation. So here we are completely stupid. it. It takes around seven to 10 years to get a product approved. And I mean, any product for agriculture would be treated the same.

23:42Would you have the worst pesticide coming from the worst chemical plants or the most natural pesticide, the natural pesticide, which would be there for the last 2000 years and you just decide to reuse the same one? It's the same. To get approval, just for someone to open the file, it's already four to five years. So you drop your file in a country, any country in Europe, it takes between four and six years for having someone turning the first page of your file. Then they start asking questions and doing back and forth and so on. And since then, you have no right to do any business, of course, so not to mention even tests in large fields.

24:29And you are in an industry, especially in agriculture, where cycles are a year because there is a season for everything. So not only people are not working, reading your file, but on the top of it, if you have a question, it always takes a year to answer because you need to go through a cycle, especially when you are a very small and innovative company. If you're a very large company, you're operating on all parts of the world. So at least you can manage to have multiple seasons in a given year, the same season multiple times in a year, because you can travel in the other half of the planet. But in case of startups, everything is going twice as slow.

25:10So then in order to get regulated, it's another three, four, five years. And if you have a brain and you're in startup, you look at the US and here, you know, the US is supposed to be the guy being the most dirty guy is absolutely not conscious about environment and so on. Yeah. But for biocontrol, it takes less than 24 months and you're in business. So if you're a startup, you don't do that in Europe. It's a reason why also we don't have investments. We created an environment where for investors, it's unacceptable. Can you tell me a bit about the, because this is, of course, one of the areas of critique and the things that we need to solve.

25:52Can you tell me a bit about what is causing this? Is it, or do we have the established agriculture industry with us as helpers in this? Or are the startups alone in this fight? Where do we see politicians or policymakers make the right moves? Are there specific countries we should look to and we should learn from? I can give you a few ideas because, of course, it would require much more work on the reasons. One of the reasons is if you are a very large, you know, synthetic pesticide company, you are going to do plenty of formulation of the same product. and you're going to ask for examination by the regulator of all the different formulations.

26:43So you're going to swamp the regulator with the same file with different formulations 150 times. So it's not that the regulatory bodies are lazy. They are swamped. And there is no fast track for those products which we all desire, which has a clean products, a bio control products. So there is no fast track for those. So you take your ticket on the line like everybody else and you wait to get approved being a bio pesticide or a synthetic pesticide. And if I'm a synthetic pesticide company, you know, I'm going bio as well. I'm not stupid, but I need time for that. And in order to buy myself time, I'm going to flood the regulator with frivolous demands.

27:30So I think that's the kind of... Are we seeing this happen? Oh, yeah, of course. Of course. Of course. In some countries, I even saw some. I have to just, you're saying of course, but it's absolutely terrible. Yeah, it is. It's absolutely terrible. So then let me ask you a tough question. I don't know if you've been yourselves active in this publicly, but one of my positions I'm taking in the European ecosystem is I wish that all of us, especially the investors, that I do think you come from a privileged position oftentimes when discussing things in the media because we're supporting startups, there's generally a good mood around startup investors.

28:15So I wish sometimes that we would get more often and more clearly up on our soapbox and and try and get people up in arms about, in this case, big ag blocking good innovation. Have you ever done that? Why are you not doing it? Why are you doing it? How do you work to improve this environment? Of course, we try hard. And so we are sending our position papers. We are analyzing domains. We are sharing some analysis, which we write. with some sovereign funds. So we don't do that alone. We do that working with other serious players who are digging into the subject and who are willing to move, to make those lines move.