The Ecosystem: European Innovation Council-funded initiative selects its first cohort of Widening start-ups

07 Jun 2023 | News

Few EIC grants have gone directly to early-stage companies in Widening Countries, but now an EIC-backed accelerator is providing mentoring to help 32 start-ups from the region to shape their business plans and access private capital

A group shot from the Ventures Thrive pitch contest that took place in May this year. Photo: Ventures Thrive

Six deep tech start-ups have begun a six-month programme of workshops, masterclasses and coaching to shape them up for private investment after being selected for mentoring as part of a European Innovation Council (EIC) programme set up to support young companies in Widening countries.

No EIC connection is required to take part in the initiative, Ventures Thrive, which is being delivered by Acceler8, Wolves Summit and Anthology Ventures, three partners that each provide services to start-ups.

“Our goal is to find promising start-ups who are seeking private funding and are ready to grow,” said Antti Heikkilä, chief executive of Malta-based Acceler8. “The programme is designed to give an extra push to speed up the fundraising round.”

This goes to the heart of the challenge for many start-ups in the Widening countries. Local venture funding is scarce and risk averse, while international funds are often wary of investing in these unfamiliar ecosystems. On the public side, competition for funding is high and often requires lengthy application procedures.

Hardly any of the EIC’s grants make it into the Widening countries, but it has provided €1.5 million in non-dilutive funding for up to 32 start-ups.

“Our aim is to leverage the initial EIC grant during Ventures Thrive, and that is encouraging certain types of companies to apply,” said Heikkilä. “They seem to be in a more advanced stage, and many (if not all) have experience raising funds already. However, this is not a requirement.”

The core aim is to open more doors to public and private funding, and to help participants find potential corporate clients across the whole European market. “We also do our best to put a spotlight on the technology that is emerging from these areas, highlighting the talent and opportunities coming out of Widening countries,” Heikkilä said.

The first cohort

The first intake for Ventures Thrive, selected in April, comprises 12 deep tech start-ups with products across climate tech, from agriculture and waste, to mobility and energy. Three Polish companies qualified, two from Greece and one each from the Czech Republic, Romania, Slovenia, Latvia, Portugal, Cyprus and Turkey.

The programme began with a month of coaching, during which the companies produced a master plan for sales and business development, product development and fundraising. All received up to €5,000 to cover travel and accommodation to attend the subsequent selection days, which took place at the Wolves Summit in Wroclaw at the end of May.

The six companies selected are all by chance from central and eastern Europe region, rather than southern Widening countries. At the beginning of June they started a six-month growth programme of workshops, masterclasses, mentoring, and coaching. This comes with a €75,000 grant, and the chance to pick up further prizes at the end of the programme.

While most of the finalists already have international reach and are not limited to central and eastern Europe, there is broad support for a targeted initiative.

In part, this is because the quality of such programmes in their domestic markets is not great, said Jon Goriup, co-founder and chief executive of one of the selected six, VCG.AI “To get access to a really good accelerator, you have to go to Germany, the UK, France or Switzerland. So having access to an international programme here, in our region, is very useful,” he said.

Founded in 2021, VCG.AI has developed a system that helps companies in the manufacturing and processing industries to managing their circular economy data and find of routes for turning residual materials into valuable resources. The first users are in VCG.AI’s home market of Slovenia, and in Germany.

The company is targeting markets across Europe and beyond and recently opened an office in Stuttgart. “This is where we see a lot of development potential, in terms of the market, in terms of talent and in terms of funding,” said Goriup. These are all areas where Slovenia often falls short.

Other finalists also point to Widening country weaknesses that initiatives such as Ventures Thrive can help address. For Jan Zverina, co-founder and chief executive of Green0meter in Prague, start-up founders from central and eastern Europe often lack confidence. “It’s not so much in our blood to sell ourselves and to be confident,” he said. “This is something that we need to learn, and Ventures Thrive and Wolves Summit are helping to do that.”

Marco Iotti, co-founder and chief technology officer of Bluana in Bucharest agreed. “CEE startups may need some ambition that is sometimes lacking in the local ecosystems,” he said. “They sometimes go for too little to make an impact.”

Then there are strategic reasons for targeted support for deep tech start-ups. “It’s the deep tech companies, and hardware plus software focused start-ups, that will make a difference in terms of climate and in terms of energy in this region, which is heavily dependent on fossil fuels,” said Maciej Karczewski, co-founder and chief executive of WindTAK in Lodz.

A focused programme

The deep-tech focus has also been an important draw for some of the participants. Green0meter, for example, has developed a carbon footprint platform to help companies comply with regulatory requirements and make environmental reporting easier. But its ambition is to be more than a software-as-a-service company.

“Now we are looking into artificial intelligence and how we can help companies not only fulfil their regulatory needs, but also to go a step further and improve their performance,” said Zverina. The aim is to build an AI-driven recommendation engine that will look at a company’s data, the best practice in its sector and industrial averages, then highlight areas where it could and should be doing better.

The structure of the Ventures Thrive programme is a further attraction, with funds awarded at different milestones to motivate the teams. Zverina also appreciates the way key performance indicators (KPIs) have been firmly linked to actions during the accelerator programme, such as setting up client meetings, reaching out to new countries, or hiring new staff.

“These KPIs made us think about our priorities as founders, because they relate not to the outcome but to the activity we carry out, and then how Ventures Thrive can help us get there,” he said.

This aspect of the programme is also singled out by Maciej Karczewski of WindTAK. “Setting concrete, measurable, down-to-earth and practical KPIs is something that companies need to do anyway, but it’s the first time I’ve seen this in an accelerator, and I see a lot of potential in such an approach,” he said.

This provides a useful focus for companies that have been through accelerators already. “If you are doing this for the second, third, fifth or tenth time, another round of mentoring doesn’t really cut it,” he added.

WindTAK was set up in 2018 with the goal of optimising wind turbine performance using 3D printed aerodynamic devices, internet-of-things (IoT) and other data technologies. “Wind turbines always need attention or some form of improvement,” Karczewski said. “If you add new technologies, such as IoT, 5G and artificial intelligence, you learn that these energy converters can have electronic ears and eyes, and do their job better.”

The company is already selling to customers in Poland, and has recently opened a subsidiary company in Canada. Mainly working at present with windfarm owner-operators, it is hoping to graduate to work with larger operators.

Karczewski also appreciated the light application process of Ventures Thrive, with the formalities taking only around an hour to complete. “The amount of effort we have to put into getting a similar amount of money from public grants in Poland doesn’t compare,” he said.

Iotti was attracted by the pragmatic approach of Ventures Thrive, and its view beyond fundraising to look at reaching consumers. “Time is ticking and we need to get into the market,” he said. “Ventures Thrive, and the team behind it, can help us to accelerate that.” The programme’s tight focus is also a plus. “The time that they ask us to commit is time well-spent, and I think we will learn and grow as a company.”

Bluana was co-founded in Bucharest in 2022 by Florin Irimescu from Romania and Iotti, an Italian based in Switzerland. Its aim is to develop a plant-based alternative to raw fish, for example to replace salmon and tuna in sushi, sashimi and poke dishes.

Rather than follow other companies down the route of plant-based texturized protein alternatives, Bluana has worked with experts in molecular gastronomy to produce its fish substitute. “We start with fresh products, and get good flavours out of mushrooms and natural herbs. These help to make a product that resembles fish, but has low calories, high nutritional density, which tastes great and has a great texture,” said Iotti.

The company currently produces small batches and is working on scaling up production and obtaining shelf stability, in order to address markets where the perishability of fresh fish is an issue.

Accelerators and the market

Like most of the finalists, Bluana has already been through several accelerator programmes, and Iotti sees a gap in the market when it comes to the next stage. “There are a lot of programmes that concentrate on launching a start-up, but tailor-made support while they make it to the market is harder to find,” he said.

This focus, plus a small cohort, is where Ventures Thrive wins out. “Very often accelerators say they will give you lots of support, but then there are 50 companies in the cohort and only five mentors, so you get support once a month, for an hour or so,” said Goriup.

Heikkilä is pleased with this first phase of Ventures Thrive, and sees scope for refining and extending the approach. This might mean targeted help for investors, or regional programmes designed to boost start-up pipelines or entrepreneurship more generally. He thinks there may be a case for a programme specifically designed for the Widening countries of southern Europe. “There are specific challenges in certain Widening area countries that we could target with the model Ventures Thrive is implementing.”

The call for the next Ventures Thrive cohort will open in October, with a focus on life science start-ups. “We hope to double the number of applications, as we will select 20 companies to create their growth plan, of which 10 will receive the €75,000 ticket,” Heikkilä said.

Elsewhere in the Ecosystem…

  • ff Venture Capital, based in New York and Warsaw, has launched ff Red & White, a €60 million fund to support start-ups in central Europe, specifically Germany, Austria, Poland, Czechia, Slovakia, Romania and Hungary. The fund will focus on series A and late seed investments in areas such as enterprise software, industrial tech, and sustainability transformation. The initiative is a joint venture with Japanese investment advisory firm JBIC IG Partners, and includes support from several Japanese multinationals  and the Japan Bank for International Cooperation.
  • The European Commission is looking for organisations to join its Industry 5.0 Community of Practice. This group will bring together European innovation ecosystem stakeholders to share good practice, co-create actions, and contribute to implementing the European Innovation Agenda. It will also provide a platform for members to network and establish new collaborations. A one-year pilot phase will prepare for the full Community of Practice to be established at the end of 2024. Expressions of interest are needed by 31 July.
  • Proxima Fusion, the first spin-out created by the Max Planck Institute for Plasma Physics in Munich, has completed a pre-seed funding round of €7 million. The company plans to develop a nuclear fusion stellarator to the point where it can open a working power plant in the 2030s. The funding round was co-led by Plural and UVC Partners, with support from High-Tech Gründerfonds and the Wilbe Group.

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