How would you describe Jolt Capital and your investment thesis/guiding principles in one sentence?

Jolt is a PE firm investing in growth deeptech companies. In other words, we help to scale €10M+ revenue companies which business is based on an original intellectual property.

Can you tell us a bit about yourself, the key partners/experts in the team?

We are all ex-operators and entrepreneurs. We did create, run, scale, sell, IPO, merge innovative companies, as founders/executives or as investors. As an example, one of our managing partners (Pierre Garnier) ran a $3B business while at TI, and another one was CTO at Completel (Antoine Trannoy). Myself, I founded several companies in the AI space, sold them to different acquirers in the US and Europe, before becoming a Managing Partner at Sofinnova Partners, and moving on to less early stage companies to create Jolt Capital.

Can you tell us a bit about the fund’s history? 

While being a VC, I had two (only two) frustrations: first, companies sold were too small, and ended up disappearing, second, late-stage co-investors were making more money (with lower multiples though) with much less risk. This I why we decided to create Jolt Capital: to fund companies with an optimal risk reward profile, with a very systematic approach to value creation (grow a company 5x, and generate a 5x return – no need to hurry since we’re built on solid IP ground).

It was quite difficult initially since LPs would not believe there were enough growth tech companies in Europe, or that technology returns and capital effectiveness were there. We had to prove them wrong.

First, we demonstrated high returns on companies like Heptagon, which we helped scale from 100 people to 10,000 in 5 years with excellent returns.

Second, with the creation our AI platform Jolt.Ninja, we managed to identify and quantify our markets. Now everybody knows that there are more than 60,000 high quality technology targets in Europe within our focus, and we placed ourselves as leaders of the European deeptech growth investment scene.

Third, we formed a team of trustful, highly business skilled technologists and investors. Our team is one of the best team of technology specialists on the market today.

Finally, we demonstrated that we could deliver, even in difficult times, high quality portfolios and top returns and liquidity.

Our last step was to state loud and clear that we would proudly stick to our vision, only investing in responsible deeptech companies that truly matter. That is the reason why we decided to run only SFDR Article 9 funds.

Why do you think now is the right moment to launch this fund?

There is a significant change of perception on the market. The successive waves of easy and magic money (mythical unicorns, web3, NFT, metaverse, new economies of all sorts…) have flattened. It’s been refreshing and reassuring to see the growing awareness about reshoring industries and their supply chains. Decision makers have realized it’s key for both our sovereignty and the sustainability of our economies. They now have to understand that we absolutely need to scale our IP-based companies (and and not those nonproductive trading platforms) rather than giving them away when they are too young.

What is your unfair advantage? What do you bring besides money?

We currently differentiate in 3 ways:

– Our deal flow origination and our business intelligence are AI-generated by our proprietary platform Jolt.Ninja, which is today fully integrated within all our processes: it makes us better informed and insightful, and it also allows us to stop searching deals under the streetlight, avoiding hype and clubs.

– Our team of domain experts is particularly important, both in deal selection and in post-investment work. We are truly able to help the management since we’ve actually been there ourselves.

– Our current AUM makes us the largest growth deeptech investor in Europe, enabling fairly large investments per deal. We are able to boost our companies like no other fund today, and we intend to expand much more.

What do you look for in entrepreneurs? / What will convince you to invest in a company?

Managers must be team players, with their existing teams as well as with new team members, ready to share, to learn, with an excellent sense of execution and full transparency. Those qualities are necessary to leverage what Jolt Capital can bring.

Other necessary conditions include a technology positioned on a fast-growing market, satisfied customers, and products which, according to common sense, are sincerely useful, because making money is not enough. Those conditions will ensure a durable success for those companies.

How do you assess and mitigate deep tech risks in your due diligence process?

The key points of attention include intellectual property protection and product maturity (usually the first version of a product is non-industrial grade). And of course, when hardware is involved, supply chain is key as well.

That said, the level of risk on growth deeptech companies is much lower than the one on most pure-player digital companies. At growth stage, technology and customer acceptability are mostly behind us. The remaining risks are associated to the scaling phase: those ones are much easier to manage for deeptech, which is mostly B2B, than for B2C digital trends and hype cycles, requiring expensive marketing campaigns and resulting in large customer acquisition costs.

Can you give examples of companies you previously invested in and why?

We invested in Heptagon when it was a 100-person company designing advanced micro-optics. It grew to 10,000 persons, delivering for example the facial recognition model of all iPhones. The quality of the CEO, of the IP, and the customer excitement were our drivers and it played out wonderfully. For us, the Danish company NILT, which designs a revolutionary type of lenses called metalenses is the next Heptagon.

We did invest and exited from multiple other companies such as Eyeota, Fogale, Skill&You, or Verimatrix. with similar patterns: strong proprietary IP, solid management teams, positioning on growing markets. No rocket science though, just execution.

What is the best way for founders to approach you and what will convince you to have a first meeting?

We are always impressed by all founders and willing to exchange with them. The best way to approach us is to get in touch directly in writing, by email or Linkedin. We are very easygoing and welcoming individuals.

That said, we discover ourselves most of the companies we invest in, thanks to our AI tool Jolt.Ninja, which keeps recommending to us deals fitting our profiles and our vision.

What is one advice you would give deep tech founders? 

Don’t listen to consultants (who never made it), never follow trends (it is already too late when you notice something is becoming trendy), never forget that your talent creates money, and not the other way around. In other words, don’t try to raise absurd amounts of money on grotesque valuations: if you give in to that, you are just a plaything for investors who are gambling with numbers. Focus on execution and work with investors whom you feel are great business partners.

Who are your LPs and how did you convince them to invest their money in deep tech?

Currently our investors are sovereign funds, insurances, pension funds and family offices. 

I think investors are looking for specialty teams in deeptech, like Jolt Capital, addressing the issues of deal sourcing and European fragmentation in an innovative way, as we did with Jolt.Ninja. Of course, the building of a track record is key.

The current trends of re-localization of factories and technology sovereignty are also helping us.

What do you think will be the next big thing in deep tech? 

In depends on the time horizon. In the long-term we all agree on trends like quantum sensors & computing, space exploitation, and energy production by fusion. But as rich as you may be, you cannot decide that your money will make it happen fast and within the horizon of a fund.

For us, we focus more on technologies which are paving the way to get there, and that tally with our current fund size. Advanced materials for the semiconductor industry, optronics, robotics, cybersecurity, e-health, energy management are our daily quest, and they will prepare the arrival of the next big things.

What trends are you seeing in the deep tech investment landscape?

Let’s start with the negative. I see many initiatives led by the same people who were the priests of NFT, the wizards of the metaverse, and the gurus of cryptocurrencies, now migrating to deeptech, expecting to surf on a new wave. Those will certainly delay the progress of technology, by creating artificial competition and confusing LPs and public markets.

On the more positive side, we have an incredible number of high-quality European companies in deep tech, which reached critical mass, silently and modestly, with strong CEOs. I also see investors who are domain specialists and will be able to help those companies to scale. The current environment is unleashing those talents, and I think we all learnt what should be done to keep the ecosystem focused and growing.