CBE JU-funded projects and other successful biorefinery examples demonstrate that these business cases are sustainable. Scaling up technologies, from research to demonstration, to actual industrial production, is seen by banks and financial institutions as a risky endeavour and is often deemed as “non-bankable” despite these initiatives having the objective of a more sustainable and circular way of producing.
Moderator:
Charlotte Van Velthoven-Geerdink
Keynote address:
Joachim Merziger, CCO, AFYREN
Speakers:
Joško Bobanović, Partner, Sofinnova Partners
Filippo Giancarlo Martinelli, European Ambassador, Irish Bioeconomy Foundation, Coordinator of the BioeconomyVentures project
Alex Michine, Founder and CEO, MetGen
Pavel Misiga, Head of Unit for Circular Economy and Bio-based Systems, Directorate-General for Research and Innovation, European Commission
Okay good morning ladies and gentlemen and it’s great having you I hope you had a good coffee break and let your fully energized again for this final session before lunch break will start at 1 p.m. my name is Charlotte fvov and it is a great pleasure for me to be moderating
This session on making biobased companies and projects bankable um for those of you who were already here yesterday and might have been in a session here yesterday in this specific room we already talked in quite a big and Abstract but General but also specific way on how uh to attract
Financing to the bio based sector but now we’re going to go really a little bit more into detail and we’re happy to discuss this with you so as you might know the joint undertaking CB funded projects and other successful bio Refinery examples demonstrate that these business cases are actually sustainable
But sustainability is only one part of the picture scaling up Technologies from research to demonstration to actual industrial production is seen by Banks and financial institutions as a rescue and devia and is often Nam as non bankable despite these initiatives having the objective of a more sustainable and circular way of
Producing so that is what we will be discussing is it really too risky or do investors really dare to invest or what is needed for that what is needed that financial institutions are also willing to do that I’m going to start with some practical details the first one was not
Planned but because I saw at tripping um and and many more I’ve just learned Please be aware that indeed there there is a small step over here we we don’t want you to break any bones because this is not a pharmaceutical conference where we have doctors and Physicians um your
Biobased economy experts so I’m not sure if we can solve the the the the bone breaks here um also good to know for you that the outcomes of this session will be used at the end of this conference where we will discuss that with you amongst all the other session uh
Presenters and moderators and that will also feed into concrete policy recommendations and ladies and gentlemen we’d like to interact with you as well it’s not a oneway street we would like to gather your input so if you have any questions please raise your hand and we’re also happy to use slido as a
Communication tool for this session and then um for me but also for you U good to know each other a little bit better uh specifically targeted also at the sector who is actually here in the room so please raise your hand if you are yourself a fure
Capitalist Jos go this is going to be very interesting for you okay good um please oh there’s another invest there as well a small one a small one yeah I didn’t ask large or small um it’s an investor good to know okay so we two of
You in here uh who works for a government okay yeah very good who works for a bank yeah okay good to see um and then a final question to you please raise your hand if you agree if Europe will not step up its investments in the biobased
Industry then the US and China will be the leaders for many years to come due to its conditions for investment to have been reported to be more attractive in us and China okay so there’s a lot of work that needs to be done in Europe this is going
To be um very good and a lots lots of food for thought for the discussion that we’re going to have but before that we’re first going to move towards the keynote address which will will be delivered by yahima the CEO of air Yim sorry CCO exactly CCO of a really a
Great pleasure to have you so please give Yim a big hat yeah thank you very much charot for the for the introduction good morning everybody I would first like to start thank CB for giving me the opportunity to introduce you today our story and and where we stand today
So we all know and we have already uh discussed this morning that the chemical industry is facing major challenges but it’s also an opportunity for players of the bioeconomy so what are the challenges of the of the chemical industry we know that uh the scarcity uh of fossile resources climate change
That’s why we are here uh all together together there is no debate anymore but there is also crisis of linear and globalized models so we see it as an opportunity as of today only 1% of the of the assets that that auran is producing are biobase it’s the same
Number that we heard earlier this morning on on the polymers where 1% of the polymer production is is biogas so how can we contribute we can contribute in making them biow based uh and natural which isn’t the case uh today we bring a reduced carbon Footprints which is uh an
Important feature in the in the current debate and challenges and we are making this out of a circular and uh local model and last but not least uh and this is an important feature the products that we bring to the market are are Dro in so our customers can use them in
Their existing processes without changing anything uh in in their operations so where is airen today in the nutshell the company was was founded in uh in 2012 we have a portfolio of uh of 10 patterns um today uh we we have uh 130 uh employees and constantly
Growing um the first plant uh in France is is currently built with an annual L capacity of 16,000 tons and we will come back uh later to that CSR is really in the core uh of of our company and all this together um allowed us to uh to raise 150 million EUR of
Finance Ing and and jco we will see later is uh is also contributing to this and then on the downstream side uh we have 165 million EUR of sales that are actually secured by long-term contracts with customers in uh in different uh areas so what do we do we have a unique
Uh low carbon circular bioeconomy approach where we use sustain stainable second generation feed stock which is coming from Sugar Mill uh so the products that are not anymore able to be valorized by the sugar companies with an Innovative uh biomimicry process they are turned into the products of Interest
Which are the the carboxilic acids from C2 to C6 and uh a high value fertilizer uh that is byproduct of of our process process one of the uh the key differentiators compared to the conventional petrochemical industry is the carbon footprint production as it’s divided by five
And um we we create also on top of being a drop insolution new bioeconomy value change in making uh in making Solutions available that do not exist today uh with bio ions so this is not to bother you it’s just to show that uh we are able uh to
Contribute uh improveing many sectors of the industries and many products that you also find in your daily lives um and and this is obviously giving resilience as uh there are different Target markets with different economic Cycles here uh you can see the the six uh strategic uh markets aen uh is going
After and we have today uh contracts secured in all of the six markets so three of them are very close to the end consumer uh like the nutrition whether it is animal nutrition or uh human nutritional Solutions but also flavor uh flavors and fragrances besides we are also going into more
Downstream applications uh where we are contributing to making high performance lubricants more sustainable for example for the aviation industry or for heavy duty applications but also in life science uh which in our Jaron means cosmetic applications pharmaceutical applications and in uh Material Sciences our first plant uh has been opened uh
Last year uh in the third quarter um with the presence of CBU ju delegation um and the the startup is currently uh in progress so France uh as of today is our main uh production Hub as Europe is in advance in terms of bioeconomy that’s where many of our customers are located
But not only uh our customers also ask us to follow them uh abroad uh to Asia and uh to North America and strategies to consolidate the first plan in Europe uh to prepare the international capacity extension but we are also working on increasing uh capacity in uh
Europe here is a a short picture of the fundraising story uh of aen from the early Beginnings in uh in 20 in 2013 I do not want to go into too much um details here um just to share with you that we have um an ownership structure that is based on three pillars
Uh there are uh funds that are having one uh one third onethird is coming from the historical ownership and the management and and oneir contributed by uh uh the public uh from the IPO uh that we went through in in September uh 2021 a word on the after bioamp project
That’s uh why while we are while we are here um we uh we got the support from bbig at at that time with a crme of 20 billion EUR and a Consortium of 12 Partners um what I like to remind here to uh uh to the audience that was not here this
Morning is that the the Consortium is very well balanced from the Upstream involved um engineering raw material suppliers but also Downstream uh involving endusers they are able to validate uh the production and uh service providers like uh like p4c or pno who help with their services for example on on life cycle
Assessment last but not least uh a short snapshot on the finance model uh of the first plan again it’s very balanced uh half is equity uh coming from uh uh BPI France the the public French uh Investment Bank who is the minority shareholder uh of the joint venture airen Nei airen is the
Majority shareholder and complementary uh this project has been financed by uh Banks um debt and and loans and one quarter is coming from uh the 20 million CRS uh that has been uh that has been granted by the CBE and which was a very important contribution to uh to make this project
Fly that’s what I wanted to share with you uh this morning and I have a back to travle thank you very much thank you Yim for your presentation and for giving us an insight as to how you actually can set up a project that apparently seems to work very well and
Where you also gave us an insight into how the project really works into detail but also the way you manage to attract funding for your project and that is something that we’re going to discuss into more detail how you can can get to that point that you can have enough
Funding to make the project project in such a sense that it’s fully commercial uh uh business and I think that’s a very interesting topic that we have at hand here with a lot of speakers that can also allude to that um so again Yim if I
May ask you to join me here on stage then I’d like to invite to the floor as well Alex Mishi who is the founder and CEO of Medan please join us here then I’d like to invite yosko bonovich the partner of Cova partners then next up also filipo jaro Martinelli
Who’s currently the European Ambassador with the Irish bioeconomy foundation and project coordinator with the CB joint undertaking funded project bioeconomy Ventures and finally also bavel misab who’s the head of unit within the European commission’s director general research and Innovation please give them a big hand
Okay so before we get started um I know Yim you already uh delivered your contribution so I’d like to start with with Alex uh would be great if you can introduce yourself and also well give us a bit of a flavor as to how you see the
Topic of of making those projects like the project of Yim really a bankable one and interesting for you since you are a venture capitalist to to invest in so happy to learn more from you yeah thank you thank you for having here yeah indeed I’m wearing so many hats I after
Working in the industry for 10 or more years I founded like four companies um and uh one of normal companies but the last one is the VC it’s a family fund uh in the biobased industries and uh so we are running it’s a small one we
Are running like one to up to 1 million ticket and uh we invested in five companies but what brings me flavor for this discussion so uh I was in my life for in in in a both sides so like 15 years ago I was speeching to yosko that it was 15 oh
Maybe 10 10 10 years ago I was teaching to Yos that he needs to uh invest in in mag and he agreed told told me actually a very good story he said well if you would like to uh have a money uh then you know ask for advice
So that’s how it goes but now I’m also on the other side uh where the people are trying to uh raise the money uh for their own startups and we are focusing I mean my fund is focusing on uh early stage companies Angel uh investment like
In in the first or two years spinoff from universities and stuff like that so I think that I can be bring the flavor in this discussion because I’ve been on both sides very good so Angel investment more focused on on on the seed funding part like the it’s angel investor you
Know drive them towards the series a exactly towards the series a then we come to the Series E A then we come to the series a uh business to the venture capitalist yoso could you please introduce yourself as well good morning uh first of all thank you very much for
The invitation to be here I appreciate the opportunity to share what we have learned over the past you know decade a little more than that in biobased space so Yosh banovich I’m a partner with sop NOA Partners sop NOA Partners is the oldest Venture Capital firm in Europe 51
Years old that’s old our industry uh uh because V Capital started just a few years earlier than we were founded on the west coast of the United States so overall a young industry and uh we are today a life sciences platform that has six different strategies investing both in healthcare and sustainability so
Obviously I’m part of the sustainability strategy uh where we invest in food agriculture chemicals and materials enabled by uh biot technology and biobased feed stocks in early stages so series a is kind of our sweet spot uh we sometimes do some seed Investments sometimes do some uh CP Investments uh
And uh we have through uh the lifetime of our activity invested in a little over 25 different companies uh some of them are no longer in existence which is part of a regular life cycle of investing and also of survival uh uh some of them not many we have uh to
Industrial scale so you heard from Yim story already about afen where we joined the company when it was you know able to do things in the lab but not at industrial scale uh and before affen we have done a few other projects where we have uh learned or tuned our
Understanding of how to help these companies not only get financing but actually execute on those on those projects some of these learnings are extensive uh and I’ll I talk about that later later uh but uh that’s kind of how I can contribute to the discussion yeah
And that some of them are expensive I think that’s part of the business of course that’s why you’re in it uh you win some you lose some and uh yeah very interesting to learn more about that in a second uh filipo can you please introduce yourself as well surely it’s
Philip martinell here for those who don’t know me I’m representing here the Europe the at the bi economy Foundation of Ireland and the European funded project bi economy ventor which I had the pleasure to coordinate for the past two years and a half uh briefly bioeconomy vent is the Europe
Largest initiative in the bio economy to match make startups and investors by far we have been working with 1,000 organizations around uh around Europe and I assume I mostly be invited today to share some learnings uh as as people active in brokering in the field the connecting startups with investors
Through what we learn in the over 45 live pitching events that I’ve been doing around Europe the three accelerators the four brokerages and especially the privilege we had to work in fact with nine partners and also 20 uh subcontractors which were our ambassadors in fact most of the bioeconomy Clusters around Europe have
Been working with us to deliver several of the services we’ve been doing so far and uh we learn a lot in this uh looking forward to talk about that okay thank you well the matchmaking fits perfectly within the context and the fashion of course of this stakeholder Forum where
Basically every day during the stold for we have a bit of a matchmaking between those different kind of Partners so really happy to have you as well uh Pavo European commission great to have you too can you tell us a little bit more about the role that you play to make project
Vable thank you very much uh good morning to everybody my name is b m I’m head of the green transitions unit in BG RTD Department of the commission for research and Innovation um we are responsible for uh CB before BBI J ju that as the title of
Our unit uh indicates we want to see systemic changes uh transitional activi so we we not only deal with one instrument although significant 1 billion Euro um of of investment in in in the CB activities that we want to see that the whole industry transforms uh therefore we look at all aspects
Including investment uh and and financing access to finan we also invested in a uh in a private public fund where Horizon Europe’s uh funds are blended with with private Capital uh and it it is a new Venture Venture Capital fund that operates only in the field of
Bioeconomy um so this is where although we are government part of the government at European level we are trying to uh stimulate uh investment with different approach very good and we can stimulate Investments of course in different ways uh for that one also needs regulation going to part that topic right away now
Because I want to tackle a couple of other things uh uh first um when I also predis the topic for today with you we set an identifi we really want to discuss into more Det DET the different financing models to enable those Investments for the biobased sector because we all hear funding funding
Funding money money money very important but what kind of financing models would be a good idea feasible for this sector so perhaps youro may I give you the floor first as a very experienc is the only one who has money here this is going be I’m not saying
You’re saying it yourself so yeah please so it’s going to be an interesting discussion I guess but but uh anyway uh so we’ve seen a bit of an evolution uh uh in the way of financing and when we talk financing we’re focusing on bigger projects right exact
Just to be just to be clear so we’re not talking about you know investing a couple of million in companies that need to develop their own process we’re talking big tickets industrial scale commercial commercial level Readiness uh and so uh uh historically uh we have uh
Kind of improved a little bit uh and you know aan not the right example uh but uh in an ideal world uh uh we would uh not require as much Equity financing to support uh commercial units of these companies and the biggest challenge here is very simple one in uh I’m not going
To name the percentage but in very large number of cases the companies that need to build their facility are building first of kind because there’s something unique to their technology that nobody has done before at the scale that they want to do and therefore there is certain element of risk and this is
Where the key question is so when you talk to venture capitalists like ourselves for us that’s a low risk compared to the risk we have taken in you know trying to figure out how to engineer a bacteria or a yeast to produce a desired chemical uh build that
Process to scale proven it in a in a pilot or a demo uh facility and then brought it to a commercial level but when you talk to a commercial bank they run for the hills and they don’t want to do touch anything like this because there is certain element of risk that
This is not going to work and there have been cases where it did not work we had some in the past uh so uh uh then uh the role that uh I would call them facilitating uh projects like uh BBI or as it’s now called CBE and for whatever
It’s worth for whoever is in charge charge please find an easier name to pronounce okay it’s really a t twist to say CB G okay so I don’t know whether there is an obsession with acronyms or we are not allowed to give kind of real names to
Projects but it would be much easier if it’s called you know project Athena or whatever the case may be uh and uh so these are uh vehicles or uh uh facilities that really catalyze uh some of these uh some of these cases and you know we’ve had a and involved in one
Case we have other other companies that were part of these uh financings uh because they bring the element that then often times secures other people because of the quality of due diligence that has been done about the fact that this is a non-dilutive source of financing and uh
The reputation that stands Behind these kinds of projects that have been delivered before so that facilitates uh sometimes access ACC to let’s say Bank financing like has been the case in in afan but also some other sources of money so uh if we can lower the equity
Portion this is the key the key driver and the reason for that is that today in Europe in particular vure Capital funds are not set up yet they’re not big enough to finance these capital projects with large amounts so we spend enormous amount of time and a is a case in point
Organizing the financing Syndicate before even you know doing anything practical and that’s a I mean it’s time wasted in a way but we don’t have other resources so we have to do that yeah okay it’s time wasted but I mean if the outcomes would be positive it’s it’s
It’s of course time well spent but that’s something yeah exactly philipo actually you not inquired a bit can you can you echo or at least tell from your experience or some good examples from from the ventures that you have supported sure surely surely I was in in
Fact uh nodding in fact the yes I want to uh uh Echo what what Yos said but as well as take a slight zoom out also for the benefit of the audience when you were surveying the audience and understanding who who is there um in terms of financial instruments it really
Depends on the stage at the stage at which you are and although the core Focus now it’s bankability uh and follow up of investability I think it’s also important a bit for for the audience to to to maybe go quickly through a bit the journey and uh uh because there not
Everybody knows all of it and neither we do but if if we are this the cve uh Community a lot of what we do is uh starting from from the laboratory then going to Pilot then going to demo then going to Flagship as as we like to say
Which is one representation of the story but different stages will have very different very different uh challenges you have early stag Investments preed and Seed where uh significantly the investment is done on the people then you have a little bit more of a shift into the the IP what’s the IP that you
Hold but then also you you realize how um you cannot really speak with banks why because you don’t not have assets so you cannot get debt you cannot get loans if you don’t have an asset to secure it so really the Jour you have IP but that don’t understand
That and IP are not seen as very very good in fact thanks for that so tangible and understandable assets as opposed to intangible asset unless you they really like specific accessors or their patent ears but yes indeed so that that what would really Str stroke me in this two
Two two years and a half is really how very heterogeneous is this journey and uh how really it is changing in time you start with your team you may get the IP then quickly you will build a little bit of an asset base is most important you build some service contracts or maybe
Some early product development contract research but you’re so weak in that in that phase you’re totally weak so we should really really remember the importance of European grants and national grants in general and CBE in particular to to push you through that with those you’re building your IP basis
Your organizational capability to do to do things because a lot of startups have just not good at doing things at all and then with those then you can start talking with the with the banks different countries will react very very differently and uh before I leave you
Know to to the others for continuing I I also would like to say that um sometimes especially for entrepreneurs coming from Academia there is this beautiful picture of the small flask the the glass bioreactor and the iron bioreactor and then a factory not necessarily every company every entrepreneur has to do the
Full Journey from strain to B Refinery like for example afan is successfully doing no because a viiner is a chemical plant and maybe you are not the right people to run a chemical plant maybe you should just sell your enzyme or your strain to the Noyes of this world you
Don’t know so it’s so much heterogeneous and fascinating the vent world and not not transparent at all so we very happy that we’ve been able to operate there as facilitators and uh and learning so much from people like Yos and other investors yeah so it seems to be also that had the
Joint undertaking and the projects that funds is is a main driver also for uh vure capitalist to say okay we want to further invest because that’s already kind of a quality stem that that that’s be given perhaps a question to you hope it’s the other way around because we
Have a company the company that you have the company indeed uh in that sense that that works well um I think philipo you said I mean depth instruments that is really really hard uh but again Yim I think you just presented you you also can rely on that instrument so it works
For you so what is what is the silver boot for you that that it works that is a challenge uh is a challenge for the follow-up financing I mean uh here CU gu vehicle is is really essential in making the first projects happen but what’s that what’s next and uh companies often
When they want to go for the followup replication uh you don’t have yet cash flow you don’t have yet a solid balance sheet and then the banks are running away and and this is maybe also an opportunity for uh for uh uh for Europe uh for the member states uh to
Contribute with bank guarantees in in accelerating the deployment of this promising Technologies exactly thanks a lot for that perhaps Alex because you said you you focus on the smaller tickets in in general where do you see the the the problems to to Really lead those companies to being a viable
Company with with a future ahead well I I enjoy every second of the working with small companies because I think that U uh there is a huge challenge uh for when the companies has from the University with the uh scientists who thinks that okay that’s my baby it works okay I like
It but they have no clue what to do next no clue I mean no legal support no sales and marketing no public nothing how to scale it up from the idea from University to bring it in you know a little bit further and to sell it to yosko
So and I enjoy every moment of that and um but it it comes with the experience you know you see it’s just like U what necessary steps need to be done uh in order to bring the company to the uh level where the professional well BC
Will uh take care about it so that’s that’s very much fun okay so it’s experience and I think we have a lot of experience over here it’s probably also a question of having a lot of trust right I mean trust that the projects will will run well trust that I mean
That there’s a future for uh the Investments that you invest in the people I mean the the idea is not R because you know I can see that it it might work on a lar scale we are not yet in even in Dem scale but if I see the team
Then then it’s that’s it investment because you know otherwise the idea will die exactly so the team is very important but then still the financial aspects I think y you also said okay depth instruments not very easy especially in the relationship to to the banks and you said perhaps Europe could
Play a role there so powerful it’s not a a big surprise that I’m I’m getting to you right now so what kind of role can you do to kind of like d projects which to step in where banks are reluctant to step in I have to say that our
Discussion is a little bit biased towards certain group of uh certain part of the of the industry and specifically focus on startups that uh there are you know we we deal with the whole sector and see also uh establish companies that want to change or expand uh their their IND industrial activities
Into into biobase and they have different needs so I accept that we are speaking know specific specific group uh startups and how to finance because if we if we speak about everything we have to understand that that capital is there just European Investment Bank has about 10 billion
Instrument for Standard Loans they can offer this loan at the level and these are not small tickets this these may be hundreds of million let me just check you capital is there would you Echo that that capital is there EI debt is there for certain projects yeah certain projects for
Projects but not for startups yeah exactly I totally agree with you that that is absolutely big problem it is it they are right but this is not the the financial institution that can convert into venture capitalist so what they do they they provide their Capital to venture capit funds but we don’t have
Them we don’t have enough so this is why for example we initiated a new Venture Capital fund the European circular bioeconomy fund 300 million EUR and and they still have problem to find bankable bankable for them as a as a venture venture capitalist how can it be that we
Still have that mismatch then then there is a fund but and there funding that well I have a personal experience so well I mean they’re not listening to thees so they they need to have the bankable business plan you know Advanced uh uh development to finance it so they
Basically so the money is still sto basic I I don’t know I will know better but uh no they are not adventurous enough to to finance based uh industry so like they are very kind of traditional if I may say so well if I if
I may react to that you know half of the capital comes from Public public sources so they can take enormous risk and they are taking this risk but I I think still there is demand for for financing even in earlier stage where the risk is is even bigger
Than then instruments like this can can cover so we are asking question what how we can help those companies that are in that stage that even Venture capitalists are not uh courageous enough to to go into into into that and Alex I I think you mentioned that for example a
Startup may not have capacity to they there are scientists or you know kind of managers of scientific projects but but not uh they they may not have simply capacity to to prepare an investment proposal so what we are reflecting now is to is to provide uh um provide kind
Of capacity building instruments project development investment project development assistance and then the hope the reflection won’t take too long so that we can move to action so that we can then unleash the funding which which is in the fact but another if I may last thing mention we are also thinking
Because the problem for for financial institutions is what will happen in they invest will will the product be taken by the market Etc so we discussed about that there are regulatory things very much uh kind of in in the line of people in this in this conferences this barriers
But there there may be for for me the major major issue is to find the market and what I see as very very good example is that that you in early stage you found uh your your clients Downstream who will use your your products in my
View this is this is the key uh if if the the market for the products they are Downstream users for biobased products I believe that venture capitalist would have no problem to to invest so how to how to bring this value chain thinking into development of projects this is
Something that I would I would also like to hear from you uh when you develop your technology uh are you thinking about your future clients because this is the key there are no future clients there this is not a viable Innovation yeah yeah we’ll get back to that question
Later R I think yoso you still wanted to respond yeah maybe two two comments because I think I want to go back to the to the challenge of financing larger larger projects because that’s a kind of elephant in the room for the entire industry and I don’t disagree with your
Points but you know we just need to uh uh one point at the time and so there there are two things here that I think may have ways to be resolved in a relatively uh simple fashion so I mentioned that the banks don’t want to take the risk of financing with thatt
Certain first of a Kind projects and the second element which you mentioned is the acceptance of new uh products or maybe newly produced products in the market okay so let me uh uh talk about each of them and how I could suggest this being addressed so one of the and
This is a particularly important point because we keep there’s a tendency in Europe okay to rely on Public Funding for a lot of things to develop okay but there are ways how public institutions can act to caliz private investment and ultimately in a mature business there is private Capital that goes into projects
That make sense that have an irr that’s interesting for them so why why don’t we think about ways of enticing commercial lenders to invest into these kinds of projects by for example providing a guarantee us has been extremely successful in building solar industry by government essentially providing
Guarantee to a lot of these projects everybody has heard of cindra because that’s the one unsuccessful project but nobody has heard about hundreds of billions that went into successful projects that essentially built an industry that did not exist 20 years ago this is true across Europe as well as
China or United States so providing a guarantee to commercial lenders is a relatively simple mechanism to have them learn and be exposed to a new industry while not necessarily mobilizing a lot of public Capital that sounds like that sounds like lwh hanging fruits so we have an infinite balance sheet uh uh you
Know in European Union okay that doesn’t have to be deployed but can simply act as a guarantee to some people and I don’t know if you have time for me to address the other angle which is the market yeah if if if we do the market in
Just a sec because I think the lady eagerly wants to come in yes I do because um I’m a bit surprised by what I’m hearing on this panel where by the way there’s no female but that’s that’s a side issue uh so you know I’m a business
Angel a fundraiser I work my own I’m one person you all have teams behind you and what I’m hearing uh is you asking for a lot of things that are already there that exist so for instance the European Investment Bank lends uh Venture debt to um companies at the stage of aluren it
Does that absolutely every day in tens of millions of Euros the European Investment Bank has 600 billion for the next decade it’s called the climate bank so it has essentially 60 billion to spend every year it’s problem it’s it’s a problem of operational capacity now as
To guarantees uh on uh loans this is being done this is W which after three years you know just raised a two billion fund did by having all its not so quarter and they did it very much like you Al raised a billion a quarter of it
Is loan and they got guarantees at 80% 80% from B FR and from the European Investment Bank so I think you know I’m I’m sorry to be telling you this but I think you need to do your homework and you need to to to know what exists you
Know within Europe to really help your companies your portfolio companies okay that’s one of the big issues thanks for that statement um really keen on a Rel on a reaction because basically you’re being said you need to do your homework appreciate really no reason to get angry right I’d like to leverage
Your knowledge and what you have already learned and then you know start from a from a higher level if we are missing something so U appreciate the comment and we have actually worked with I on uh Deb financing the little challenge there is the length of the process uh so uh
But that’s a separate separate issue so maybe just a comment on how we can help commercial players uh catalyze uh this kind of industry and uh I’ll paint a relatively simplistic and cynical picture but bear with me okay a lot of big companies have essentially been sitting on the sidelines and waiting for
Startups that are bringing Innovative technology to succeed or to be cynical and say oh look you did not succeed okay I Told You So Okay uh but ultimately the consumers are asking for renewable products why because all the brands have set expectations of what they want to
Deliver by 2025 20 30 2035 or 2050 okay and they’re not going to get there the way they’re doing it now so this is a huge business opportunity where Innovation can help these companies reach the goals that their customers are asking from them so I’m a company and I
Know that there is startup a b and c that’s actually able to produce something that I want uh to use to address uh large uh customer needs what can I do I can provide an off take to this company and say if by date x 2
Years from now you are able to deliver this product at this spank within this price range adjusted for whatever happens in the market in the meantime I’ll be willing to buy it what’s the risk for the big company it’s the risk of legal team time and the paper that
The agreement is written for that’s it okay if you don’t deliver and the price is not right I don’t have to buy it so low risk it’s zero risk okay exactly and that’s how is that’s how they manag to put together a two billion Grand which
Is unique in Europe building on that and getting the other cultes together so you have an answer for that as well excellent okay well seems like future collaboration yeah you can join the panel next time I think P I would say that um it’s true that uh public Banks like the European
Investment Bank have a lot of capital but um it’s it’s true also I understand the situation of of startups because the the bank clearly the European Investment Bank uh doesn’t yeah it it provides depth it it provides Equity quality Equity guarantees all all kind of instruments they they develop instruments for uh or
First of of the kind Etc but majority of instruments really do not reach small companies smes startups simply because they don’t have capacity to provide all the information that is that is needed for the bank to uh to to provide um provide their investment so I think that we need uh Venture Capital
Funds and and better we we need in Europe also to provide public funds uh and blend I I believe that that in in the transition period in the in the next few years we need to provide Public Public Funding to stimulate in into into the startups but I think this is not
Enough if if financial institutions are ready also the companies have to be ready and and the question is what what is needed on on that side how we can support how we can develop that capacity to prepare investment proposals how we can help them to to adopt this value
Chain approach so that they very early from the development of innovation they already look at at market and and and and find uh find the the clients who maybe also investors in in in their we see that it’s one of the key questions how can we buildt that potential then
And that’s why we’re here but it seems to be more instruments um is not going to be very helpful because that is already a lot out there and I think Alex you wanted to comment on this too right yeah yeah big time so I may be a little
Bit provocative here but we should probably try jointly find the more simplified language in about what we are doing but what are you suggesting uh it’s like you know on my experience in my experience I know I’m working in the field of enzymes okay I’m sure everybody
Here aware what is enam okay when I Beach to the bank zero zero so I change enzyme to the bio Catalyst still zero and then you change bio Catalyst too uh then I change to the products okay so we have a process process and undefined process very nice process which is bringing up
The products which you probably be aware of so that that’s our impeaching town yeah yeah and that’s probably something you need to do by trial and error to see how that’s what is saying that we need to we need to maybe establish even in the C and big the projects where there
Will be the learning lessons about how to beach for the financials yeah yeah okay because we have a lot of people in this room who professionals yeah and uh with with a lot of professionals so how to pit how to deliver the message what is that you are exactly doing and
Why it’s good yeah okay I I I park this one as well because we can take that on board later when we talk about indeed what is needed to kind of convince the uh financial institutions and what kind of education actually needs to be beyond
That uh to make sure that you can pitch in the right way but before we do do that we have two questions first the gentleman and then the lady so regarding the difficulty of finding large amounts of money at uh late stages I wonder why uh established
Companies are not playing a more active role if I look at the Pharma sector for instance there they interact with biotech companies that do a lot of innovation and when the heavy lifting starts to become necessary deep Pockets high-risk clinical development costing tens to hundreds of millions of dollars reduction capacity
Commercialization all of that is in place at these big companies they have even the customers and they’re as you said are looking all the time for new products so why is this working in the farma sector and apparently not in the sector that uh you’re talking about in
In a similar way and the same Dynamics could play out right and they can go to Banks because they have AAA ratings they can get loans much more cheaply than any of these biotech companies can if they can at all so they have the knowledge of building plants because they built
Plants uh not the same ones but you know they have experience they can use so why is this not working filipo can you can you comment on that yes um so just just u a quick one and in response to the gentleman question also of the go is
Surely the the level of commitment of uh the incumbent industry May in some sector not be comparable to what is happening in the Pharma but just for for those who are less familiar there are several large Corps in uh in petram and others that have their own CBC Branch so
Corporate ventor Capital so they will be acting similarly to a pure Financial ventor capitalist and they will be Scouting For company acting as equity and Deb investors as part of their uh as long as they align with their own corporate strategy it is not a full answer to to your remark because you’re
Probably looking also for larger ticket size but there are uh significant examples of a ventor there’s psf ventor and or there’s also other companies that instead of setting up their own corporate ventor Capital Branch they will come together or hide behind a an instrument that is acting as a umbrella
Corporate uh ventor capitalist and there is a there is a very positive examp example in my view of emerald Technologies Ventures that they act on behalf of themselves and other uh companies so it surely not as much as it happens in Pharma but there are some large Corps that are putting money
Perhaps not at the right stage not perhaps not with the correct number of zeros but they are and those are typically referred to as a CDC corporate ventor capitals but now I leave it to exactly are you investing in the wrong business to put a provoc
Uh no otherwise I wouldn’t be here yeah so excellent question okay and as I mentioned we grew up through Healthcare we were First Investors genitech which was the first biotech company ever so we asked that question and try to understand that that problem very deeply many times over here are some thoughts I
Don’t think I have an answer number one valuation multiples fira is five times sales multiples that’s not the case in chemical industry so that’s the first problem okay second problem is that Pharma has no internal Innovation therefore there is less and don’t get offended of non-inventory lot of cvcs which are uh
Corporate Venture Capital units today are mostly focused on technology scouting and seeing things that over time May develop but don’t have you know I don’t know if it’s courage or mandate because it comes from from the from the top uh to say we want to be you know the
Ones who will be I mean doing basically the role that the big farmer does where you know you bring a project to phase two and then they pick it up and typically ire it and and run with it knowing that the risks are still there but you know they know how to handle
It thank you for that the lady totally agree with your yeah perfect thanks could you please introduce yourself thank you K from my I’m in charge of CSR and communication and public affairs and I just wanted to to add one comment really in line with what you are saying
And also the challenge to do our own homework uh to look for new new financing um opportunities when when we look at the existing tools which are really I mean various this is clear we face one major difficulty that we we never fit completely to the frame uh
Either because we are too small startup small company or because we are biobased company or bioeconomic company and usually the frame are based on strategic sectors like energy or renewable energy chemistry or food but never bioeconomy as itself biobased product are never included or quite rarely included as a
Strategic value and that’s a big problem because when you look at many tools we we never fit 100% to what is demanded so I think the work that CD is also doing to emphasize by way economy as one strategic value chain for the future is key and you mentioned the the
Example of vector uh of course batteries it’s well understood that it is strategic we need to work on energy storage Etc but people don’t understand really why bioeconomy is important and usually when you talk about bioeconomy they think about bi energy okay so there there is a lot of communication and
Pedagogy to do okay so a lot of policy a lot of information to write this semination but in one way I think afan manages to do so pretty well apparently so how do do you manage them to pit and to obtain that funding how do you do
That can you give us an Insight where what others can learn as well there a reason why you stand where you are right now yeah obviously the access to Market is key as we learned yesterday we are facing we our competitors are petrochemical companies that exist since 9100 years they have optimized their
Process over tens hundreds of years and we we have them in front of us so our challenge is to find spaces where the products bring the additional value that does not exist today and where the whole value chain can transfer this added value up to the end consumer so this is
Really a key element and and then by growing we know there is the maturity we will also learn we will optimize we will be more comp competive but in the beginning is who is able to engage this journey and there is also by by auran experience it’s not the large
Corporations who engage first with us it’s often smmes or privately owned companies we have the ability to take the risk in engaging despite what you said just that they have no risk but the large operation even if they have no risk the decision making process is so complex so diluted
In the organization that they are not able or do not want to take this limited risk and smaller companies uh that that have a vision and where the decision making is very much concentrated in in the hand of one or a small group are able to do this and and these companies
Are enabling uh enabling the the emergence of this type of of of projects because it’s a chicken of the egg Chicken and the Egg you need the market you need the customers to convince the investors but I think that that that’s good I mean uh of course you need to
Have the pressure from top down when you look at the policy but of course you need the strength from bottom up so when companies convene and they tell the the same picture the same story that is going to help so you you need to Showcase that strength um do you think
Yosko do companies can they tell the story well enough because no okay yeah so a is an exception then they’re getting there get getting there okay I mean it’s nothing nothing unusual uh we held uh what was it like 12 15 months ago a storytelling workshop for our CEOs
Because we wanted to help them be better in telling the story of what they’re doing because were they willing to learn of course no they were but you know most of the most of the you do better afterwards uh yeah incremental Improvement okay okay it’s it’s the same what I just said
So we have to learn and teach uh how to tell the stories so the last session uh was a lot of discussion about the uh green premium which I absolutely okay so but you know you assume that people understand that but you know the pi ver
They don’t you know you just have to stay straightforward so we are not so your perspective needs to be a Layman um because you’re so deeply involved in the business you think everyone understands but that is not the case that is not the case you have to go back to to the
Basics and the fundaments and explain that to them so that’s a a very good point I saw there was a Ser up front here and happy to take your question I’m David Newman uh we’re a startup in Germany we uh ferment CO2 into biodegradable polymers PHA uh we’ve
Raised 10 A5 million euro including from the um European Investment Bank and and money frankly is not the principal problem we have the principal problem we have is the marketplace sorry the the marketplace the market the uncertainty of the legislation which your colleagues in the commission put through Contin
Changing the the goal posts about whether these materials will exist in the future in in Europe um and it’s no surprise that companies like ours are looking to the United States where the Biden legislation has put down a target of 40% biased 80% biased Plastics by 2040 um whereas those targets just don’t
Exist and the mandates just don’t exist here in Europe so our problem is not getting money our problem is actually having a market for the products afterwards okay well that makes it so interesting today and also yesterday I mean there are different factors that come into play some put much more um I
Think focus on the financing part you put more focus on on the marketplace part and then also say okay so goals policies are constantly changing PA then again I’m looking at you um can you understand what this mis is is saying or would you say no we we we we Fair on on
The straight line everyone knows exactly what to expect from us in 2030 40 50 I I absolutely agree this is what I was arguing earlier we need to have markets and and companies that that beat for for investment they have to show there is a
Market for question is how we how we can stimulate those markets and this is discussion about policy I’m a little bit worried about the view of of biobased Industry that it can only Thrive is if there is regulation that will that will drive uh the growth of industry and create
Markets for for them because you know we don’t have very good experience with uh kind of centrally land economy but the targets targets uh are important indeed indeed so there there will be a need for I will say new generation of of of of policy but the
Right policy to give the right signals to the to the market Market but but immediately you know there is I I believe there is we we have example of of a company that succeeded to find the markets we drop in chemicals which is typically this is the the the most
Difficult thing for biased for biobased products because they compete with the existing product on the market uh so they are offering alternative that that is usually more expensive the only argument is is is uh climate mitigation contribution which nobody has proved it because there is no standardized methodology and everybody
Claims something and and the other person claims uh something opposite our own studies show that um that the same bio refineries using different stock uh fed stock have have different contribution some is uh climate positive other is climate negative so so it is not
It is not easy there is a lot of work to do on on on future policy that will stimulate the markets but we Face the immediate problem and and we have to address those other elements that can improve uh access to finance and and and increase the the investment so it is it
Is if I may conclude so companies have to have to be better able to to explain uh they have to be more kind of effective in in finding uh finding clients finding markets and financial institutions have to also learn to understand the the the advantages benefits of biobase biobased
Products and to have to change their operation to be able to process the applications assess them correctly assess the risk correctly and and and and make investment decisions so easy turn a couple of switches and we’re there but Yos um and filipo but yeah filipo first from my side just just just
A bck one uh I can follow and agree with most of interven public just just a small remark on indeed the LCA methodologies and different approach to the methodologies thereof can can return different results for a binary but but here in this room I assume we all know
That the the utilization of European biomass as opposed to importing OPC fossile it’s intrinsically positive as such then of course LCA is it’s it’s important element but it is crucial to to remind ourself that we also working for the emancipation of Europe of fossile and again using the famous remark decarbonization or def
Fossilization so just just just double checking on on on the increasing value of local resource biomass like to quickly respond to that problem is that that currently industry uses foreign biomass so the the the bi refinary that is processing American so do does not have the performance you you
You would expect in terms of so we we we did life cycle assessments and we we found negative results my my double check was just to assess that irrespectively to LCA we recognize the value that biomass as such is emancipating us from file and not Eco import irrespectively to LCA or is that
Not about you yeah but use a lot of fossile by processing and importing then the balance can can turn uh different okay thank you perfect you let you comment and then I think two question okay perfect then um first question to yeah thank you yeah yeah it should be working the switching at
Up you don’t need to press any button yeah someone welcome to stand up and sorry we’re just checking if it’s working right now switch of microphone yeah now it’s working this is working yeah so uh I have one question iot Gap in the discussion that I have seen in different
Balance is a possible lack of branding of the uh circular bioeconomy value in terms of uh resources uh processes and products for acceptance by the market by the bankable providers is it this possibly a priority to be interest the question is if if The Branding as such is a possible priority
That can be addressed think pav you wanted to I I have partial answer to that so there is some reflection within the commission on some kind of yeah inde branding in for example in form of labeling of of Bio so it would be clear and possible to distinguish between
Biobased and fossil based so so so this is just one approach that that we are exploring thanks yes to well indeed uh generally speaking bio The bioeconomy Branding and the The Branding of biobased products is crucial element and labeling renewable carbon as opposed to Fossil carbon it’s it’s a huge need at
The same time let’s not forget bio econom it’s a meta sector not a single sector different application fut Tech biotech c tech Nutra uh if you have to go to actually I I have my consulting company of five people but we try to help different clients but if we had to
Go to all the congresses of all the markets we have to go to VU Geneva fi Global frankurt in cosmetics P it’s all over all over and The Branding there often those sectors are totally different like you in in uh in Paris when you go to in cosmetics you can talk
About crueltyfree or you when you are at VA food Geneva you talk about different so this markets are very very different value propositions and uh some of them are really far far remote from bio content which is not a problem because they have to pick something but let’s not forget
One thing is centrally branding very important let’s get the label out as soon as possible but uh different markets that different branding needs to to answer that yeah and they need to just to pick up on one very important Point 100% agree about the heterogeneous nature of markets that biobased products
Are addressing and essentially impossible to Sol with that way but uh knowing that each of them is using renewable carbon source is a common thing and we have unfortunately and this is a double-edged for okay because we don’t have uh true carbon markets yet uh however we have seen uh some Industries
Using you know carbon credits and assigning them to uh different things uh because there is money to to be made there uh and not really assuring traceability of uh renewable carbon sources okay so for me if there’s one common thing in all of these products is is the source of carbon where it’s
Coming from because that permeates through all of the end markets and that truly differentiates how something was made versus somebody who just bought a certificate to have offset their carbon food but this is not common practice yet for this sector so that might be a solution then right as a kind of a
Quality stem yeah okay very good um another question yeah maybe one one remark regarding um say the sustainability of biomass also in relation to financing by for example IAB uh we are using basically St as the side product from Stars processing for wheat and the wheat is really produced
For protein fatty icids fats and and and fire fiber um I don’t know exactly what the status is now from the IB but basically when we were raising money we were not um acceptable because basically we were using a food source and I think many of the B economies really need Pure or
Clean suers to to to use and I mean this is locally sourced material are not important Etc in Europe and I think I think many of us face this this kind of issue that that basically I mean we are really also in in LCA Etc we are
Looking good but because of of this food source thing I mean we are just excluded from this finan and I think certainly also a CB I hope and and can help to really also clarify to to the financers that that this is essential uh component
Of the of this of the whole sequence and and just saying that we should use W streams and and those kind of leftovers I mean in some cases I mean uh it’s possible and I congratulate uh companies who can use that but I mean in other cases you
Really need a clean feed stock to make it also sustainable and uh and and reliable and that should really be part of the whole strategy and I think that if if if if we get a more clearer part on the biomass sustainability it will really facilitate thing and also you you were
Talking a lot about stakeholders and I think also from the stakeholder point of view I mean we we have a lot of discussions with stakeholders and we have I I think uh very nice European names also uh uh lining up with our kind of products but at the same time we also
Have stakeholders who are reluctant to to assess because of this fock story and I I think to to make that clear I mean it would help really a lot thanks P can you comment just one comment that there is certain shift um you are possibly aware with the sustainable Finance
Taxonomy so for for biobased industry originally in the first draft uh uh biobased uh products uh that use of um um food uh um food plants uh as as speed stock were excluded that that in the final version this provision is is not there so you see that there is
Recognition and and guidance to uh to financial institutions that that it is not it is not the case that if biov products are produced from uh from food biomas that that it doesn’t mean that it is uh unsustainable um but I I think that that there may be still this understanding in
In uh in banks in financial institutions so they they may be uh afraid of reputational damage if they if they invest in such uh uh such thing and and the TR is that there are no sustainable uh sourcing criteria for biomass or very very few maybe there
There is for for for certain certain type of biomass for would but for AG agricultureal products it is it is not in place so so there is an an issue so yes there is need to to develop sustainability criteria for for biomas but there there is nothing that currently prevents the the current
Policy in policy framework including this financial sustainable Finance taxonomy is there is nothing that would that would say that uh biobased products based on on food biomass uh is unsustainable okay thanks for that probably the world in that sense also for the biobased economy is going to be
A better place uh with the fact that also large corporations of course as of next year they need to uh uh comply with the corporate sustainable reporting directive of course bringing further the discussion on uh working in a sustainable uh way also caring about our environment so that might be an extra I
Would say policy and Regulatory incentive uh for the sector to grow further filipo you wanted to uh yes um also because I don’t know we’re doing on time and there is a couple of items that that I I must uh put forward on the on the financial instruments then now take
Your floor please no it’s um because we well when working in this uh we had the New Kids on the Block two years and a half inventor is is nothing compared to the of the industry and off but still we were privileged to speak with a lot of
Different people and uh it’s clear here the Venture and in general financing and bankability really leverage on the the programs like the cbes or other this has been said and it’s clear I’m not sure if it’s said enough today how how crucial and important it was the work of setting
Up the ECF it has been mentioned but really such growth growth and meds an in finance instrument with 100 billion from EI and all the leverage that they could do with the limits of the fact that for unfortunately politically they don’t like bio energy but it’s it’s a limit
Among others we can deal with that um this really it’s a crucial instrument so we would really like that more of that more of that more of that more money to them or more of them and uh there is a gap that has been observed going back to
The meta sectors food food uh clean and bio there is as was said yesterday I believe food seems to be more low anging fruit so there is some of Bio that are more Capital intensive that may be lacking a bit to that end I wanted to to
Put the spotlight on one uh subject that we have observed which we are uh which may be an interesting approach in the Netherlands we identified one one one fund one organization that they do ventor debt for bioin so I was I was moderating a p World bio market and they were one of
The speakers and they do again ey interest right that for Bio refineries and that will fit in a nice that would be equivalently fitting in the p in the pie chart of a and of the of BPI which BPI assume is not high interest but that is something that could be explored by
Other countries quite an opp of that I again years and half you get in the block but still I was very surprised when I met them and it’s like although they only do benel because to put Ste in the ground you really want to understand the language and the culture of bit so
That’s definitely a model I encourage uh for for for the recommendations to to explore Venture debt not equity and uh one last one second point is the the option for interventions or partnership between either EAB or ECB and National level organization so uh ECF has already been going around
Sourcing also money from National many National Funds especially pension fund or Soler funds have limits in their mandate geographical mandate so they were some did put money in ccbf some could not because they say sorry we can only put money if you if it invested in this country so we are
Really looking at the bomy foundation of Ireland and others like should there be a few National ecfs or hubs or uh Junior partners of ebf for National level investment and then perhaps we could tap the the famous T the famous T of the Pension funds and others National
And National level so those were two things I really had to throw the so different funds different rules of the games we happy we discussed the the the pathora of funds that are out there later on but first what I’d like to do yeah I’m going to take the question but
In the meantime I’m first going to ask you uh to also take out your phones because I want to put up the first slider question for today’s session uh because we’re talking about the viability of a company whether we’re willing to invest yes or no but um less
So this question is really focused on the funding but more on other aspects so what factor do you believe is most crucial for assessing the market viability of a biobased company or project sorry yeah we’re waiting for the codes so the codes is there so what effect you believe is most crucial for
Assessing the market viability of a buyer based company or project let’s have a look at the answers in a second but first then take the question of the gentleman in the back in the meantime my name is I work for for and the question is Rel to this question and for sop NOA
Because I imagine that they analyze many projects and I think that I believe that we will bring more money to the table if we can reduce risk and I think that you know as as the analy so many projects what do they think that could be or this
The the main barriers or challenges to bring more money to the the projects they analyze is it’s problems of regulatory they think that is more we should improve green procurement or what’s the could improve the the possibility to develop more projects and so bring more money to
The table what’s the main barrier for you to finance more thanks for that question so we discussed quite a lot of barriers already but if you would have to identify the main barrier so Yim may ask you as as one person that actually runs an operational
P Refinery um what is the main barrier of all the barriers out there yeah good good question um I think the the most important and I agree with what’s here on the screen is country M and friends if they there if you find a place for your products markets that’s great then
On on the on the regulation side there are still some barriers specifically when we going into let’s say the downstream markets where we are competing really purely with the chemical industry there with the reach regulation everything is there we have access uh that’s easily manageable but in some specific other markets like food
Industry like Fe there can be strong entry barriers where the approval process is extremely long costly and times money uh we all know that and I I want to come back to uh to the the previous question um on on the market so we we we have created specific
Branding for the different markets as as J said they don’t expect the same but the green carbon is the common scheme but the Countryman today in the market he does not see if it’s green carbon or black carbon but I think one of the support could be that the end consumer
Really sees it yeah to give you an example when you’re buying today a bread you don’t know if uh if this bread uh has um a solution sorry I’m I’m I’m uh lacking the words uh if pres if the preservative is coming from uh a crude oil derivative or if it
Is biobased uh conservative I think this is could really be of help to the bioeconomy that the end consumer clearly sees and end on the label this is coming from something green renewable biobased carbon I know that the labeling uh legislation is very complex in in in Europe but I think that
Would be of major support if we manage to overcome that complexity it’s definitely going to help and kind of like overcome as well the green dressing that happens a lot because there are many organizations of course still trying to push their products into the market although they’re not free at all
Yosko what is your experience basically you know if the way we have appliances ABC d e energy rating we have a bar that shows how much of the product is actually renewable okay how long how long it’s going to take that we figure out how to compute that that’s a
Different story okay I always joke that you know possible well it’s possible okay but we need to agree so I think you know this is going to be a IFRS element in 10 to 15 years but not before that okay very good thanks okay main barri
Mark Market uh pool should be there like I give you two examples um textile yeah and the shoes so you know the the both uh areas are heavily supported by the main Brands so we have a textile made from the biobase we have a 9 shoes uh made Solly from the and that
Works that works for the for the for the common people it’s like wow that’s because it’s tangible it needs to be so it’s still the nice shoes still a nice textile but oh it’s made from the biowaste so what that’s what we need that’s what we need in the in the end
It’s not easy I know but uh that will kind of push the the penetration of the biobased materials in the people who don’t understand what’s about this material exactly so with with labeling and the right weaking you can indeed also influence a bit the the consumer
Demands and and to push for the right direction philipo you want us to add yes and the on which one of the four is the most important um from my side if you look at your own company being small or big especially small uh you can give
Yourself your own scores but but my point being here you should not sum the scores that you make but you should multiply them that means that if any of those is zero you lose so it’s not 7 + 3 + 4 plus 0 it is seven
Times times times and if any one of these is zero you just dead so whenever there’s a single point that is not at above a certain minimum level the business is there so I wouldn’t pick one i’ say don’t be perfect at one but get
Decent at all of them and then we talk okay thanks a lot for that okay so perhaps a second slide question that I still want to throw in the discussion over here is in the context of making biobased companies and projects bankable which risk mitigation strategy do you consider most
Effective and we’re going to have the different options on the screen so which risk mitigation strategy do you consider most effective so perhaps yoso also question for you um as a venture capitalist you also looking at risk mitigation I mean the more you can mitigate the risk the
More prone you probably are to also invest what is your take on this question so our biggest risk mitigator is people who invest behind yeah because we don’t really have a clue we just understand if the team is capable of getting that to the across the finish
Line so for us are you then that director say okay you have a team of five to six people really like four of them but I only want to continue doing business with you if you kick up the other two and replace them by others just to get an understanding give
This is a very touch way of saying that very very direct yeah bit of black and white the short answer is yes we try to influence that okay because at the end of the day a very simple saying in venture capital is that B Teams can destroy the best Technologies but a
Teams can make out of mediocre Technologies a huge success yeah and that still holds down okay any comments from your side risk mitigation strategies what do you focus on Yim perhaps from your experience yeah I mean um the the the diversification of product offerings is important uh to to
Have access to to different markets and it’s flattening out the risking the economic cyles um collaborations and strategic part uh Partnerships they can be they can be uh but company needs to pay attention that with the Partnerships you’re not entering into conflict of interest um with your existing customer
Portfolio so there are some some some attention points uh but they are yes they are an interesting tool thank you anyone else who wants to comment on that how to mitigate the risk from your perspective I mean uh I’m talking for from behalf of this me so I think that
The the biggest I would say advantage of the da schem of the development is that you can kill the project fast just that’s the I mean almost impossible to do in the big big industry so you know there a lot of people involved lot of money but you know if
You kill the stuff fast it didn’t work forget about it more on move on yeah but that’s a mentality question that perhaps we still have too little here in Europe where in the US you might be well earlier on celebrating for taking those kind of risks for overcoming them and
Going bankrupt is also something that is actually being celebrated at least you learned at least you made your failures and you can continue but I think this kind of perhaps a little bit harsh mentality yosko from your perspective do we need a bit of a more harsher
Mentality than in Europe no we need to I won’t say celebrate but acknowledge the learnings that one gets from failures and then move on yeah yeah that needs to that needs to happen okay I have two more questions so thank you for your patience um please raise your question
I’d like to come back to three points that have been raised there was a question by the gentleman I believe from K Len in front of me if I remember well about why the big uh multinational companies are not investing more actively and I heard all the points on
The panel but I think that the answer was actually brought To Us by the gentleman at the front who was saying that actually he doesn’t really face the one with the glasses who said who said yeah exactly that he doesn’t really faces uh fundraising issues that it’s
More a question of having a market and and the answer I believe to your question uh so the gentleman from K loen is really hold in one word again it’s regulation it’s what we’ve been talking about fa you started your speech today by telling us you want systemic change
How can you have systemic change if at the European commission you don’t work systemically between the people who fund Innovation and the people who are going to enable the emergence of those new Industries uh you know uh from a regulation regulatory point of view it’s impossible so you are the first ones who
Need to start and work systemically the people who are key to this need to be in the same room otherwise we w we won’t get the systemic change we’re all aspiring to and that we dramatically need that’s the first point second point there was the the counterargument to to
The one I made earlier from by the lady from Al the CSR lady and I heard what she said because with Public Funding especially uh or private funding backed by Public Funding you always need to take a lot of boxes that are quite constraining but we are entrepreneurs in
This room and entrepreneurs find Solutions so if there’s no funding mechanism create one in France for instance I’m now part of a collective the startup industriel which was launched by following a fast failure of an industrial startup and we’ve been talking to B France and we’re pushing for the development of new funding
Instruments to which correspond to specific needs like the needs of the bioeconomy so it’s for us to make it happen it’s for us to talk to our politicians to our commissioners uh to to our ministers to our heads of States it’s for us to make it happen as
Entrepreneurs and also as investors I do this and I’m just a tiny business Angel but I consider it my job to open these doors for my portolio companies because they’re too busy with other things and they don’t have the resources and the last Point uh I heard was from um jco
Sodco from s NOA on to this so you ask us moderator whether the companies tell the story well well with all due respect I also have to ask whether the investors understand the story well I consider to be working with people who are absolutely worldclass scientists and
Technologists and time and again I see investors who spend between 30 seconds and a minute and a half on a deck so how can you actually embrace complexity when you do that and who don’t understand you know what they are doing who don’t understand the scope of what they are
Doing and for a deal like which I just closed for example together with a company two days ago we’ve brought on board someone who is a European so I feel good about that because I’m a European at heart and I want you to bu this economy but working being a partner
In one of the biggest infrastructure funds in the world because he sees clearly how we can start from where we are today and bring it you know to a point where the large funds like Brookfield uh can can invest hundreds of millions of Euros so you know clearly we
Need to raise our bars and the entrepreneurs don’t always do the story telling well but I think that there are a lot of other people in this room who also need to raise their and will only you know succeed if we can collaborate really okay so collaboration is still
Key and are always two sides of the coin indeed I mean the companies telling the story themselves but also investors do they understand the story then do they spend enough time to really understand what is at stake and what is being presented here um we’re not going to
Comment on that right now I’d rather take the question from the audience yeah for catalic I’m missing here the technology risk um uh what do investors need to see in a technology to assume to take the scale up risk so looking at the investors in the panel filipo please
Please so to give you a perspective okay so we invest before you get to scale but we try try is the best word that I can use to understand what is the path to get to scale and can the technology that we’re looking at in its relative
Infancy get to economics that are you know workable in the marketplace and so at that point you know you can say that we accept the scale up risk okay but there’s a lot of unknown still in the R Bar is large but at least we trying to understand whether
You know in a market that requires a product to cost € 10 a kilo you will be within that range okay or you will be at1 EUR and therefore there’s no way you can get there uh sometimes uh we uh encounter entrepreneurs that are excellent on the scientific side but
Let’s say poor in understanding engineering and challenges that come with that because unfortunately that’s as difficult if not even more difficult sometimes and you know there are people in this room that are much more experienced on that topic than me okay uh then a discovery and then there is
All the other elements that we talked about like mic except all that that come that come as critical so scale up is just one of the elements one of the lenses that we put on when we try to understand whether an early stage technology can get there okay but uh we
Have uh uh declined investing in a lot of companies because of that reason okay because we didn’t see maturity in the team of understanding and or or we s that the economics will not get there once the project gets to the scale if it does yeah I follow up with yosko because
I scale up a couple of Technologies and uh totally agree so I think that the the key is uh to involve professional people from the uh engineering companies who are always greedy and uh when you are in UPS scale you kind of try to save money and uh you think that okay that
Will work uh and it it don’t work and then of course the the the price of the equipment the price of the energy the location of the thing need to be taken in consideration so if you ask me my advice involve the professional engineering company as early as possible even if it costs
Because it costs I mean yeah but that that is the same way thank you final remark by filipo apologies we we simply cannot spend more time on on on asking uh uh or providing the answers on National EU funds um local funds but can you please comment on this uh question
Sure thanks a lot for your for your question on theability on the vors ID definitely I cannot but agree and resonate with what both yosco and uh and Alex have said on the engineering side as well not everybody says that so I suggest the audience to to keep that in
Mind um there’s a couple of elements that I want to throw from what we have learned by working with 2030 uh investors around Europe active in the bones well first of all venture and invest investment is maybe not necessary for everybody so not every single company has to grow by ventor there’s
Companies that grow organically and and investors will agree that maybe 25 33% of the company are ventor investable which doesn’t mean they’re not investable maybe they’re not ventor investable because you may not have your three to five times returns in three to five years there’s other sources that’s
One um point two there is a number of things that if you don’t do right you’re out clear but at the same time there is also a message of hope that is there is a certain degree respectfully of um incoherence among different investors because every investor has their own
Investment thesis every investors will have their own vertical the sector their growth stage seat preed late and early there is even people who do only very early and very late but not in the middle so like you have all possible combination further so you can not speak
Into the right man it’s not that you’re not pretty you’re just speaking with the wrong partner of that moment maybe later on and finally result so often uh often to some extent there is a criteria that is less known and I always try to say that to to entrepreneurs that is
Many Venture and investor would have funds which have not open end but close end they would have an investment cycle five seven years enter and exit check out the develop what is the age the the Aging stage of the fund because your same project if it were to be presented
Three or four years it will have returned the returns at the moment where buy it will fit much better with that with that fund at that moment and and I don’t know yosco if the Venture will will say sorry you would have been great three years ex to the point okay and so
I that situation right now so we are in year three of the fund and when we see very seed attractive companies we have to tell them you’re not here at the right moment you know please come back when you’re a little bit more advanced not because the timing right now is
Wrong okay if you were here two years ago would be perfect and I’m happy to know that sop does share that but not all investors and fund would necessarily say they just say goodbye or not reply so then you know then you know you’re not that sad you know maybe you apply
Somewhere else so keep it in mind uh those are messages that I like to share with with entrepreneur thanks a lot for that and ladies and gentlemen with that we have almost come to the end of the session also for you just three simple questions to answer to finally wrap it
Up uh just choose one word um depth or Equity dep Equity Equity organic growth both both okay uh fast money or patient money patient money patient money patient patient clearly of okay final question uh continue this session for another two hours or lunch break uh depends up to you
Lucky me I I want to have lunch I don’t know what about you I think it was fantastic session thank you very much for the uh good questions and I think involed the engagement was really so that’s why I can continue even though I would also would like to go
To I have a compromise proposal let’s continue over lunch very good indeed indeed if if anybody wants to continue this beautiful conversation over lunch just to reach out to to to me okay I would not mind to to continue because this is very important but last thing I
Would like to say some something constructive uh proposal uh to to the audience uh we have already provided grants for investment project development assistance it was in the field of circular economy this is exactly to address the lack of engineering or Legal Financial expertise in in growing companies but many biobased projects
Would qualify a circular economy because if they use waste they could qualify we saw very little interest in this type of Grants so please if you have this issue you need assistance you need other expertise than you process already in your start then you have the funding available for project fing is available
And you can prep yeah perfect ladies and Gentlemen please give a big hand to employer Mar m