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ZURICH, Switzerland, Jan. 8, 2004 — While many economic regions around the world are trying to foster startup company growth à la Silicon Valley, Europractice, a European research program, has inadvertently spawned more than a dozen small tech startups.
According to Giselle Roesems, Europractice’s project manager, the effort was intended to make research institutes more market-oriented and help them find industrial partners for MEMS and microsystems technologies (MST).
“The idea was to stimulate development into commercial activities and to promote services to industry,” Roesems said. But a number of research team managers licensed technologies developed in their employers’ labs to create new businesses.
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“Researchers realized there was a great opportunity to start their own companies,” said Malcolm Wilkinson of Technology For Industry Ltd, who has been active in Europractice since it started.
Roesems said that Europractice does not necessarily measure success by the number of startups to emerge. Instead, it looks at the “leveraging effect” — that is, the amount of R&D money attracted to projects. At times, this effect has been high. For every euro invested by the Union, three to six times the amount is invested by other project participants.
Another performance indicator is the number of U.S. and Japanese firms contacting Europractice for prototypes and design projects. “We’ve seen a sharp increase recently,” she said. “Frankly, we are surprised by the interest from outside the Union because of the finite range of technologies under development. But it has a lot to do with the maturity of our silicon know-how.”
Originally established in 1995 with a tiny budget, Europractice had originally planned to promote the use of MEMS and MST in Europe. To that end, it has been successful.
Bosch, a German electronics manufacturer, has built up a strong MST manufacturing business and was able to knock Japanese manufacturers out of the water with its new automotive sensors that exploit MEMS tech. It even has a small tech manufacturing technique named after it, the Bosch Process.
STMicroelectronics, a frequent participant in Europractice projects, gained a leading position in the inkjet chip market after its adoption of MST processes.
But there are plenty of firms that owe not only new competitive advantage to Europractice but also their origins, including FillFactory, Strand Interconnect AB, and C2V.
FillFactory is a 4-year-old Belgian firm that makes image sensors for original equipment manufacturers, employs 34 people and its products can be found in the newest cameras from Vision Research Inc.
In nearby Netherlands, C2V has established a MEMS and MST manufacturing business. It employs 40 people and opened a U.S. subsidiary in New Hampshire six months ago.
Strand Interconnect is a spinoff from the ACREO research lab. Founded in January 1997 with the goal of providing the packaging market with low-cost thin-film substrates, the firm has been in volume production for more than two years.
It has not been smooth sailing for all the firms that spun out of the research institutes. A number, such as INPACT Microelectronics and FiftyFour Point Seven, were shut down recently, unable to find revenue or funding.
According to Wilkinson, Germany’s CubeOptics AG, which employs more than 30 people and Switzerland’s uBlox, which now employs 40, and France’s Tronic’s Microsystems SA, are examples of some of the older Europractice’s success stories.
Even Yole Developpement, a market research firm specializing in small tech, can attribute its growth in a large part to Europractice. The 15-person team has grown into a strong European consultancy.
The Europractice team has reacted to this outburst of entrepreneurship and now organizes a venture capital summit each year where selected firms make an “elevator pitch” to potential investors. The newest firms to pass through are exhibiting not just MST and MEMS, but increasingly nanotechnology, too.
Its most recent event was in Frankfurt in December. Participants said the firms are typically at a very early stage and not necessarily fodder for venture capital deal flow. They are much more interesting for angel or corporate venture investors.
“The firms we saw at the summit in December 2003 are at a very early stage where market demand is not yet evident,” said Christian Nagel, managing partner of Earlybird Venture Capital in Hamburg.
Wilkinson says that at least two of the firms that presented at the 2002 summit have found funding. Nanoco Technologies Ltd., with a patented quantum dot production process, and Plasma Antennas were both able to tap incubation funds in their regions to go to the next stage.
Europractice’s focus is now shifting into polymers and glass, microfluidics, biochips or other applications. “The role of nonsilicon (polymer, glass) MST is expanding,” said Roesems. “The market for medical applications is increasing and organizations from Eastern Europe will start playing an active role within Europractice.”