Welcome to our European podcast series on business and innovation. In this episode, we delve into the topic of growth financing and its role in scaling new technologies and innovations in Europe. Itziar Estevez Latasa, Partner at Iris Capital, and Sabine Flechet, Vice-President of La French Tech Munich, discuss the availability of resources such as capital, talent, infrastructure, and governmental support at the European level to support these endeavors.
Growth capital is a funding approach designed to provide long-term health and support for businesses, particularly those in mature scaleups undergoing transformational events with potential for significant growth. This session explores the current state of growth financing in Europe, the challenges faced in comparison to other ecosystems, and the efforts being made to address these challenges.
Itziar Estevez and Sabine Flechet bring their expertise and insights to shed light on this topic and offer valuable perspectives on the European startup ecosystem.
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Transcript of the video:
Foreign Our European podcast series on business and Innovation my name is Sabin flicher I’m the vice president of the French Tech Munich and I will be honored to be your host and your moderator for this session today before we start I’m we’d like to explain a little bit what it’s All about today so la French Tech is a unique movement which is bringing together different opinion different perspective across startups investors policy makers and innovators based on a hundred of cities worldwide in Europe that French Tech is made up 27 communities that are connected um across each other with the French Tech startup Cena and it’s trying to build a bridge between all these European European Tech communities and try to Foster Innovation and Entrepreneurship in this ecosystem so today it’s my great pleasure to introduce you to itsya Estevez La tasa partner at Iris a French Venture Capital Fund with whom I would like to discuss today a major major theme in the constitution of the European startup ecosystem which is gross financing so first it’s yeah welcome thank you very much for having me here thanks a lot for joining us so this session will be organized around three Parts today for our discussion first we will talk about growth financing what does it mean and what’s the current static quote in in Europe second um it would be interesting to understand what is your missing in this gross financing to be successful um compared to other ecosystem Um to grow our European champion and finally um I think it would be uh interesting also to get to figure out what is um being made actually to solve the challenges of course financing in Europe um but first again it’s your thanks again for being with us today could you Please tell us a little bit um about yourself who you are um how did you come to be a venture capital investor what does Aries Capital do and what’s your scope of work so my name is etiar I come from Spain originally although I spent now 20 years Working in Germany and almost 15 years now working in Ventures so I got into Venture through a different uh different uh paths uh started my career in the industrial space as a production engineer actually at the BMW plant in Munich um but then I joined the PCG to focus on Private equity and Commercial due diligencies and that’s how I started or how I started to take a look to to the investment world um I spent 10 years working for Siemens venture capital and then next 47 investing in technology in a lot of software companies in different verticals like product design cyber security Artificial intelligence and more broadly detect uh maybe a few words about Iris Capital so we are European Venture Capital fund with offices in Paris Berlin and Munich we invest at all stages so from one side it’s seed and early stage investment but also late stage and growth Uh and we focus on technology we’re quite like complex Technologies but we also more broadly invest in digitalization just to give you a sense we have companies in our portfolio like exotech Warehouse robotics company or photo in Germany in Freight forwarding we also have a shift in France and artificial Intelligence dedicated to insurance or jedox just to name a few examples in Enterprise Performance Management also out of Germany yeah cool so really a French German VC here with us and a female investor which is great so if we try to Define what gross capital is from What I understood it’s designed to to provide long-term Health to a business which is usually in relatively mature stage I’m going through some transformational events so they need some Capital financing to finance some very significant growth um we have this type of businesses in in Europe but do you think we have that Level of that or that power of financing in Europe to scale these businesses so growth capital is lacking in Europe and although we have made some progress overall within the venture capital and growth Equity landscape we are we are still there’s still a big gap so you know the when I Joined the industry 15 years back it was it was very small since then early stage Venture funds have performed well um and have managed to grow the fund of the size these companies that have been backed by those funds are now reaching the scale where they need growth Financing so it’s a very interesting moment um to to enter in the growth Equity side in Europe and still on the fun side it’s still quite thin so as soon as companies reach a larger demand or needs for financing they have to look to Anglo-Saxon investors or investors Outside of Europe so I think there’s a that’s really an interesting point in time to to really focus on growing the growth Equity uh industry and why why do you think it’s uh it’s that way like what what would be the reasons I mean we understand that Europe has a Nation-state problem so it’s quite difficult to create a a pan-european system or pan-european Venture Capital markets um in across different states and countries with you know different local ecosystem um is there a way I mean first maybe like do you think that’s the problem like how Can we bring to the VC Market to a pan-european coverage I I think we are reaching that point where where when the ecosystem is growing and where we can start thinking about uh you know raising larger funds and stimulating also some of the key stakeholders uh towards that Um it’s quite natural in the in the development I would say of our industry that that takes some time and uh I think there’s some positive examples if we look at France a lot has happened very recently um I think driven by the political agenda and but also supported by the private uh Stakeholders in particular in the insurance space a lot of movement to enable growth New Growth funds I think this is also soon to come in in other countries and we are going to see more large size of funds which are required in Europe at the moment yeah but if we Look at like the the creation of a venture capital fund they usually start at a quite local level right so you need to build a track record um from from a a national more Regional um area because that’s where you got your deal flow probably that’s also Where you got your network and also investors are kind of reluctant to Finance VCS across geographies when they don’t know the jurisdiction do you think that that’s true I mean how did you do it at Airgas since you’re a French German fund um you started probably with Paris and then exported yourself to Berlin and Munich but you you went beyond the this nation-state problem that we’re having in Europe yeah I think there are two Dimensions to this one is where do you invest and whether you place the capital and there are some funds that invest in multiple geographies out of headquarters Um and the other dimension is really um how do you structure organizationally to best at the…
Do we have such financing scale/power at the European level, for instance, sufficient resources (capital, talent, infrastructure, governmental support, etc.) to scale the new technologies and innovations of tomorrow?
During this episode, Itziar Estevez Latasa and Sabine Flechet discussed how growth capital is designed to provide long-term health for the business – usually in relatively mature scaleups that are going through some transformational event in their lifecycle with potential for some dramatic growth.
The session features Itziar Estevez, Partner at Iris Capital, and Sabine Flechet, Vice-President of La French Tech Munich.
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