The Outlook for European Capital Sovereignty

0:08Quantum has captured imaginations for decades, but real world applications have remained just out of reach. That is now beginning to change. As the technology approaches commercial relevance, Europe faces a narrow window to turn scientific leadership into global companies. Oliver Toneau, partner Quantenation, will discuss what it takes to get there. Please welcome Oliver Toneau from Quantenation.

0:36Hi everyone, glad to be here. Actually, I like the way the title of this session is put. it could have been can Europe be a powerhouse in quantum but we prefer to label it as how can we be because we have all it takes to become a powerhouse and to be a leading player but there are a few things that need to happen and by the way so I was this morning here is a good place to speak about that because I was this morning visiting the clean rooms of Chalmers University and I have to say that I've seen some tremendous research and very good startups coming out of this ecosystem. So another reason to be positive about that.

1:18A few words about us. So Quanto Nation, we started our journey in 2018, now reaching 300 million under management. Two main funds, one that's already deployed, a second one that we are closing next week, hopefully a bit above what we expected, so 200 million. We've invested worldwide in 35 companies, a big part of them, two-thirds in Europe. And we've also set up venture studios so that they help us to build a nice ecosystem of sourcing. Because building quantum startup is hard, so sometimes going through a studio is important. Not going into a physics lesson there, but this guy, Alain Spey, Nobel Prize 2022, he's the godfather of a fund, because he was the PhD advisor of my co-founder, Christophe.

2:08And he was the one who proved that entanglement exists. And so not going into the whole detail, but just a few things you have to remember about quantum. The first one, we are using the properties of the matter at the elementary particle level. So that means we are playing with individual atoms, photons, ions, or electrons. The properties that we use, first one is superposition. So that means a particle can be in several states at the same time. Remember the analogy with the Schrodinger cut. The second one is entanglement, meaning you can have particles that are twins, regardless of the distance that separates them.

2:47And the third one is anything you do to measure or to look at those quantum systems will make it collapse. From those three properties, we can derive new ways of doing computing. and so that's the exponentiality of quantum computing. Also keep in mind that when you have a machine that's 100 qubit and you go to 101, you double the computation power. So soon when we get machines that are 1 ,000 and 10 ,000 qubits, then they will surpass in power what we have with the best large classical computers. Second one, we are using it for quantum communication. Entanglement can help secure communication against hacking.

3:26And the third one is used, the fact that when you measure it collapse, it is used to build some very nice and precise detectors. Here is our portfolio. So we've invested 35 companies covering all the scope of quantum technologies. But I will not spend too much time on that. The topic that we have today is how can we still compete in Europe? Because this technology is identified as a sovereign technology. being able to hack other computers thanks to quantum computers is something that will bring significant advantage. There are also advantages in the use cases that you can implement, drug discovery, portfolio optimization in finance, to name a few.

4:09So the question is, how does Europe fare? If you look at this graph on the left, this is people or countries selling quantum computers, and on the right, you have people or countries that are purchasing them. The interesting message here is that Europe is supplying 40 % of the quantum computers that have been deployed worldwide. So we are in the game, pretty much. We have some companies that are able to do that. So that's for the quantum hardware suppliers. Now if you look at the users, there's been quite a lot of interest as well of countries purchasing quantum computers in order to use them and to start testing them to develop algorithms, software, etc.

4:49So, I mean, looking at that, quite good. We have seen in the eight years that we've invested probably more startups in Europe than what we have seen in the US. And they've developed very nicely. Now there's a catch. And the catch is this one. For quite some time, financing the quantum startup was around 2 billion per year. and the European startups were functioning with roughly a ratio of 1 to 2 money compared to the US one. Now what's happened last year is that suddenly there's a big surge to 10 billion finance for startup companies. Now over those 10 billions, there's about 7 billion going to US companies, 1.2 going to European companies, 1 billion going to UK and the rest is the rest of the world.

5:41So the question is for 12 months now we are starting to see a ratio of financing of our best company going from 1 to 2 to 1 to 7. So how long can we sustain that? And I guess it's not more than probably 12 to 24 months. The reason for that as well is that those companies with this money in the bank and the fact that some of them are now listed, they've started to do some M &A and purchase the best European player. It has started with a few companies in the UK, but we are seeing also some of our portfolio companies based in Europe being approached by US players. So the question is, if we want to remain in the driving seat, how can we deal with this situation?

6:23And it has to happen not in a distant long term, but really in the next 12 months. Otherwise, in two years, then our startups will be gone or they will be underfinanced, resulting in lagging in the technology. So what can we do? A few ideas here. The first one is about what do we have to do in the real short term, because that's a problem we have now. We have one of the best tools in the world with European Innovation Council, giving some grants plus equity, some nice programs going at scale with STEPS programs. So that's something that we need to use to the fullest extent. The second one is there has been also at EIF level some initiative to finance funds at larger scale.

7:13So being able to give 200 million to funds that would be in the billion or so and that could drive and be lead investor in a significant size round for the best companies we have. Public procurement and EurHPC is a good example of that. It will play a big role and that's also why we're able to sell that many machines. It's because the public authorities are building it, deploying it in data centers so that people can start using them. And that's important and it should be reinforced. Second, well of course there are some national initiatives in about every country. Second one, there's a very nice initiative that's underway, it's called the Scale-Up Fund Europe that will look at financing deep tech and it will be a single fund with 5 billion in order to be able to deploy 200 million, 300 million in the best companies we have in Europe in tech, so that will be a bit of quantum, a bit of all the other techs, robotics, AI and others.

8:13So this is very welcome. It will probably not be enough, but it's a very good task because it will be 5 billion that are available from this year. The fund should be alive in April. I think there's about 80 European management companies that are now competing on this tender and the result should be communicated in this spring. I think we will also not do that on our own. So we need to be somewhat flexible with foreign capital. There are some big buckets of financing coming from the Middle East, coming from Asia, coming from the US. And we should learn to be flexible and to allow for this capital to be invested.

8:56Of course, there's probably some governance or security issue that will need to be negotiated. but doing without would clearly be a problem and would lead to our companies not being financed at the right scale. Also maybe one thing to consider, there are a few, I mean I know in Sweden Spotify was listed on the Nasdaq and it's probably something that we should explore for the best startups. I think we should not make the mistake of not exploiting this type of financing. the company can remain based in Europe with strong foothold in Europe even being listed. Being listed in the US is just a modality.

9:37It's taking care, it's taking the advantage of where the money is. But it's also something that we can probably do better. In my opinion, listing on the European market is not an option for those large companies because liquidity is not big enough. So you cannot attract some significant size investor doing that. So US listing, keeping a strong foothold in Europe is probably also a good option. Now for the longer term, a few ideas here. Of course, we need to develop industry at scale. To do that, we will have to show some opportunities for exit. Because every time we go fundraise, people tell us, okay, we will give you gross money, but tell me how are you going to sell those companies.

10:23And this is something we still need to have to work on. Other ideas around unified capital markets. It's been around for quite some time. European pension fund. All this will be necessary. I know it's going to take at least 3, 5, 10 years. But at some point, if we want to remain in the rest, it's something that we will have to do. A few other ideas here around simplification of the market and also really implementing European preference for this kind of technologies. Well, that's the ideas on how I believe we can stay in the game. Thank you very much.

11:06Most corporate venture units still fail fast, with an average lifespan of just 3.7 years. The challenge is no longer launching a CVC, but making it last. Jeppe Heuer, one of Europe's leading CVC experts, has spent years working on exactly that, building corporate venturing that survives cycles and delivers strategic value. Please welcome Jeppe Heuer, co-founder of EUVC's initiative to make corporate venture capital last in Europe.

11:37So why am I here on stage? I'm here because corporate venturing is 25 % of the volume in VC. I'm also here because the most likely buyer of the startup is the corporate.

11:56These elements are basically what creates the foundation of the success of all UVCs out there. We have one challenge. The average lifetime of a CVC is 3.7 years. Where does that then stem from? It stems from a lack of understanding of how to use venture capital as a strategic tool. We all in this room know about the hockey stick on valuation. Most likely a corporate venturing entity will be closed down after three years due to lack of financial performance or in year six as lack of strategic fit. A nice note from Professor Ilya Strabulev out of Stanford. A successful CBC entity is one that survives three CEOs.

12:54I'm here because I have a dream. It's always nice to have a dream and something that makes your heart tick. Brought up as a venture capitalist, having spent five years with Merce Growth as a CBC, getting all the buyers from VC and then trying to make a better future. In 15 years from now, I hope the European corporates will understand how to use this strategic tool. And that is the fight I'm on, also running the EU VC corporate podcast together with Andreas. So, in corporate venturing, you need to get all three pillars right. The three pillars are build, buy and partner. If you don't get these three pillars into your corporate venturing entity, you do not stand a chance because you do not know where the success lies.

13:48There is no such as a clear formula on how to build a CVC and a corporate venturing entity. It is about the culture of the corporate. So you need to get it right. There are two key persons that talk about these three pillars. One of them is Standard Chartered and their CVC, Alex Manson, talks a lot about this and his book is excellent. And then also the venture mindset of Ilya Strebolev touches on the same part. As a corporate, you need to be clear on why you exist. What is your purpose out there? because if you do not have the purpose, the VC industry will not understand you. You need to bring it across the line to gain the support of the VCs, but more from your inside.

14:40Governance. That is probably where most of the VCs in this room, they tear out their hair, right? When is your next investment committee? Who is on the investment committee? How do you decide? So when you build your CVC, get this right. communicate it clearly out to the ecosystem. And act like one. And basically tell the VCs how you operate. Are you a lead investor? Are you a follower? Or do you do seed rounds? What is your geography? Train yourself in speaking the words of the VC. And then finally, integrate. Understand how you partner with startups and be clear in the communication. That is what everybody is searching for.

15:31They are searching for a corporate that understands the startup perspective and how to do this. Very short for me. So that was it for today. Have a great evening.

15:50longevity sits at the intersection of serious science and persistent hype. As capital flows into the category, the challenge is separating what is biologically plausible from what is merely speculative. Paulo Pio, partner at Exceptional Ventures, will cut through the noise to explain where longevity science is real and where it isn't. And of course, how investors should think about this space with discipline. Please welcome Paulo Pio from Exceptional Ventures. I'm curious to know who here would like to look better, feel better, be thinner, leaner, in better shape. Exactly. Everyone. Which is to my point because we at Exceptional Ventures invest exactly in this space.

16:42We back companies that help people live healthier, longer, happier lives. My name is Paolo Pio and I am the co-founder of Exceptional Ventures, an early stage fund based out of London that we launched four years ago. Myself and my co-founder Matt Cooper, who is the gentleman also at the bottom of the pyramid in the middle. And we did so because we have a very, very strong passion for these sectors. In fact, my background originally was tech. I worked almost 15 years at Cisco Systems. I was in California as a software engineer when I started. Then I did product. Then I did sales. But really, all the way, I played football.

17:30I love sports. I went on the mountains. That's where I'm from. I'm originally from Turin in Italy. I know that my accent, it's almost, you know, it just does not give it away, but that's the case. And then with time, this passion really became my main job when I started working in 2019, living tech for a health tech fund called Join Us Partners as their medical managing director for Europe. No medical yet, unfortunately. But really I spent a lot of time reading about this space and same with Matt who co-founded a bank in the States called Capital One Bank and went on to do more than 200 angel investments in the UK and chair one of the largest UK companies called Octopus, which is a 20 billion company now.

18:18So together we built a team of people that are equally as passionate about these topics and really we want to support this industry, this space. And I love this conference, which is around deep tech. You know, Andreas invited me to go west, and I thought, well, it's a wonderful space because there is a lot of overlap between deep tech and health tech, as we will see in a second. In fact, we talk about joy span. As the conversation started in the industry around lifespan, so how many years of life we live. but really then moved into health span. Okay, fine, we're living longer, but are we sick and frail or are we actually healthy?

19:05And then into joy span. How many of these additional years we actually can enjoy life? Because one thing is if I give up everything in the pursuit of longer life, there's people that eat 1 ,100, 2 ,000 calories a day, go to bed every night at 8 p.m., have their last meal in the morning, transfuse their own son's blood in the pursuit of living longer. What kind of life is that, right? So that's really what we want to do, is to promote JoySpan, and to do so with our efforts, with our capital, and supporting founders building in the space. And this goes back to the history of man. We've been wanting to live longer forever, right?

19:52going back to Ponce de Leon, all the way to modern vampire-looking longevity seekers. And I want to make the point and argue that this is strongly tied to technology, deep tech or tech in general. In fact, you can see the life expectancy has increased hugely at certain specific points. For example, when we discovered antibiotics and vaccines, there was really a step change. And with the advent of modern medicine. So really, technology has been accelerating hugely, right? Over the last 100 or so years, there's been a huge number of discoveries that have improved our lives and our health so much.

20:44For example, take the human genome project that in 2003 took billions of dollars and 20 years to decode the first human genome. And now it takes a few hundred dollars and a few hours to do the same, only 25 years later. So really, technology has been moving at incredible speed and so is health. And so that is the entire point. Health is something that historically has been improving very slowly, right? With biologists, with cells, with doing experiments and waiting, well, now has been jumping on, has been moving at the speed of tech. And we know that technology improves exponentially. And we are now on the steepest part of this exponential curve.

21:38In fact, just in the last five years, these are some of the things that happened. You guys are all familiar with the mRNA vaccines for COVID. The moment we saw the new virus, it took 60 days to have a vaccine, able to fight it, which is super impressive. But even more impressive is that now it would take 60 hours, right, with the new technologies, which is mind-blowing. Weightless drugs, right? I mean, forever we'll be wanting to be lean. Well, now we can just inject ourselves, and that's the case, right? It is an incredible, in a way, achievement. But this is just the beginning. So over the next five years, it's going to be even more advancement in health and even faster.

22:22We'll be able to connect to the cloud through brain-computer interfaces. We're going to have personalized medicine. What it means is that the next vaccine will be personalized to me and to my DNA and to my living condition. and will be different from the one that will be yours, right? And which will be particularly effective for your DNA and for your living conditions. So that's really what we are investing on at Exceptional Ventures. And the point I want to make is that health is moving at the speed of tech, number one. Tech accelerates exponentially. And even more so, within tech, AI has been really taking over.

23:10In fact, health is a wonderful application for artificial intelligence. Of 11 AI unicorns in Q1 last year, six of them were in health. And of course, money follows, right? We started investing in health almost 10 years ago. We incorporated Exceptional Ventures Fund one four years ago. So back then, we used to say, health tech is the new fintech. At the time, health tech was at the middle of the pack. But actually, last year, for the first time, it has indeed become the case that health tech was the most invested sector. So capital is following, founders are coming, and so are the charlatans. And hence why what we stand for at Exceptional Ventures is science, is data, and is helping consumers differentiate between what's real science and what's pseudoscience.

24:09What we invest in at the fund, as mentioned, is all driven by the mission to help you live longer and better. So we have a very strong preventative angle. Ideally, you want to be well, keep well and be healthy. And these are the pillars to do that. At the same time, if you fall sick, you want to catch it early. So we invest in early detection and diagnostic. And then if we really are sick, we want to provide smarter care and delivery. So using technology to access every person around the globe in every lost hidden cranny, right? Using technology to make it cheaper and more widespread to have care access.

24:55So these are the things we focus on. In fact, not just we believe that this is a fantastic sector to be building as well as investing in, but also we think that we're building a new model of venture. Matter of fact, we don't see ourselves just as venture capitalists. We believe that we look at ourselves as we look at our founders, right? We are driven by values. We're building a company from zero, from scratch, which is based on kindness, is based on values such as reliability, such as passion and curiosity and being knowledgeable. So we are founders ourselves. It happens to be that our skills is related to investing and to help others build companies.

25:39And this drives the way we operate, right? With our founders and with our LPs, we work with integrity, we add real value, we support our companies so that they can be more successful, provide better returns, and in turn attract more LPs, better LPs to what we build, and so further our mission to attract capital for the best founders to make our lives better. So really what we think is we're building for the long term, We started four years ago with our Fund 1. We just launched our second fund end of last year. And again, I have to thank Andreas and EUVC as they backed us with an SPV, became a pin to our fund.

26:22So thank you again. But really, we're just getting started. Our vision is to build this over the next 10, 15, 20 years and really building the leading health, wellness, and longevity fund in Europe, if not in the world. And we want the best entrepreneurs that are building in these sectors to come and work with us, get money from us and support us. And we support them building fantastic companies. We want LPs that have conviction around the sectors of health to back us. I think we offer a fantastic way to access these sectors. I think we are really riding and driving an incredible revolution in health.

27:07And so with this, thank you. Again, I believe Deep Tech is extremely exciting and within Deep Tech, I'm here to make the case that actually Health Tech is the most exciting part. Please come and talk with me. I'm keen to chat. Thank you.

27:26sports is now a global business shaped by media rights data and new ownership models fergus bell from the players front and prashant akarwal ceo of soneki and board room member at liverpool fc offer an insiders look at what actually happens off the pitch where value is created across teams leagues and athlete-led platforms please welcome fergus bell and prashant Agrawal.

27:55Prashant and I are trying to give some indication and an illustration of the athletes and rights holders new role in venture capital from two different lenses. Myself very quickly we launched the Players Fund which is the first athlete-led VC fund. We have about 200 athlete LPs from all around the world, and we focus on a very different value creation mechanism. Everyone thinks about social posts and billboards. Our whole USP is that at the pre-seed through to Series A, these individuals add meaningful value through their networks, through the C-suite connections, the politicians, the ultra-high net worths, and the other public figures that they know.

28:36And so they play a very unique role in amplifying these early-stage companies. And passing over to Prashant, who's had the experience with sporting rights holders as to how sporting rights holders also play a new and very key role in the incubation phase of early stage venture. Thanks, Fergus, and a pleasure to be here. Special thanks to GoWest for hosting this fantastic event. Andreas, you as well, thanks to you. Myself, Prashant Agarwal, I'm an Indian origin. Sports has been kind of my lifestyle. or I've dreamt of sports since a kid. I was born in a cricketing world, but football was always a dream for me.