For the Eindhoven tech startup ecosystem, there’s never been a celebration like this. Because let’s just say it … there’s never been challenge like the past 18 months. So, HighTechXL founder Guus Frericks was leading the celebration at XL Day, a hybrid live/virtual demo day 16 July.
Front and center on the state HighTechXL’s founder and chief growth officer, savored the moment … the Eindhoven-based venture builder’s first live pitch event since 2019 and the debut of what Frericks dubbed “the Corona Cohorts.” “We have done something really special,” Frericks said. “We have built ventures with people who have never met each other in person.”
Before the teams could take the stage at High Tech Campus Eindhoven’s Conference Center auditorium, Frericks gave the live/virtual audience of attendees and investors a probing dissection of where the Eindhoven is right now. The moment marked the beginning of the end of the pandemic. It also marked the end of the beginning for Eindhoven’s deep-tech ecosystem and the start of a new phase with more talent, more support and – most importantly – more early-stage capital for startups.
HighTechXL created 20 teams over 18 months in a series of Covid Cohort startups that persevered during the pandemic. Fifty percent survived what Frericks terms a “very tough program,” a much higher percentage than most accelerators, where typically only 33 percent survive 18 months. Compared to U.S. startups, the historic HighTechXL survival rate and value of the startups is far higher, four times better than average. “If you ask me why, it’s because it’s a community-driven system where we have figured out in the past decade how to mobilize the local know-how and expertise,” Frericks said. “And that is where we make the difference.”
He compared the conversion rate – the rate of startups that make it to later stages of funding – the Netherlands is at 36 percent compared to 70 percent in the U.S. and 80 percent in Israel.” Dutch officials rationalize the gap by saying bad companies fail faster in the Netherlands. “No … just no,” Frericks said. “What happens is, the country has a shortfall in scale-ups. “If we don’t increase the funnel of promising startups, there won’t be scale-ups.”
During the pandemic, it was so difficult for startups to get additional investment that Frericks joked that he could relate to how the head of the hospital emergency department felt – all the patients are in the beds, they’re all on oxygen.
But it wasn’t oxygen … it was lack of capital.
Overall, the Netherlands has all the ingredients that make the Silicon Valleys, Bostons and Austins successful, he concluded. “The only thing we need to fix is early-stage investment.”
So, let’s look at the Corona Cohorts in order of appearance at XL Day:
Pitching: Wessel van de Woude, co-founder and CBO
Concept: Veridis is developing technology that increases the sample size of recycled plastics by a factor of 100,000. The tech increases the commercial value of recycled plastics. Co-founder Wessel van de Woude told the XL Day attendees that only 15 percent of plastics worldwide are recycled and recyclers have mountains of dark plastics that can’t be recycled. Veridis has developed a thermal scanner from lab scale to industrial level that gives recyclers more granular analysis of plastics while generating data about the daily recycling stream.
Market value of innovative recyclers who are potential customers: 70 billion by 2025
Stage: A pilot client is testing to validate the tech and business model on the way to 50 million euros in revenue by 2026.
The Ask: Veridis needs a seed round of 1 million euros
Team members have expertise in physics and management
Cool fact – The EU will require 100 percent of plastic to be recycled by 2040.
Pitching: Congli Dong, CMO
Concept: The Infitiv team is developing a terahertz sensor and software to prevent spoilage of fresh produce in the post-harvest stage to promote a sustainable and responsible food supply chain. “Let me tell you a NOT fun fact,” said CMO Congli Dong. “One third of food produced is lost or wasted. A quarter of food waste occurs in the post-harvest stage, mainly in storage.” With fruit, that’s a loss of 6 billion euros, Dong said.
Value proposition: Infitiv uses sensor technology from the European Space Agency to monitor continuously and autonomously for gases from degradation to help extend storage life and cut losses. This will extend storage life by 20 percent and cut storage losses by 50 percent, more efficient than competitors on the market.
Market size: The global food diagnostic market is valued at €11 billion, of which Infitiv is going after 20 percent by partnering with controlled atmosphere storage equipment manufacturers to reach growers.
Benchmarks: Finishing protype and software 2022, launching in the Dutch market in 2023, expanding to European markets in 2024.
The ask: 800,000 euros in 2022 for the R&D and prototyping, then 1.7 million euros in 2023 for the product launch – marketing, production and sales.
Revenue projection: Targeting 95 million in revenue by 2027
Team: Total of eight with a former McKinsey executive, an optomechanics engineer and others with terahertz research experience.
Pitching: CEO Ian Macbeth
Concept: Udentity uses flexible imaging technology developed by TNO Holst Center in Eindhoven to create a new means of universal biometric identification and authorization that’s ethical and seamless to use. CEO Ian Macbeth asked the XL Day audience how many times they authenticated themselves each day from opening their phones to starting their cars. “Do you trust all those security gateways to protect your stuff?” Cybercrime costs just the U.S. $4 billion per year, Macbeth said, just by the sharing of passwords and tokens.
The Udentity wristband uses a sensor that can see through skin to identify people by their unique pattern of veins in the wrist to replace passwords and tokens. That technology syncs wirelessly with all communication gateways and host systems with which it’s enrolled, Macbeth said.
Udentity technology detects the user and can be used for everything from accessing computers to unlocking doors and making purchases.
The Udentity bands represents “secure frictionless multi-factor authentication that can only be used by the owner, with all the data stored in the band,” not in the cloud or on a computer hard drive, Macbeth said. “Control and trust are handed back to the user,” he added.
Market value: The passwordless authentication market will be worth $64 billion by 2027, with Udentity going after $49 million in the vein biometrics market. Foundational customers will be in the personal access space including workplaces, IT security, banking, telecom and security zones such as ports and controls.
Revenue comes from sale of the band itself, the sensor integrated into third-party products and the licensing fees from software and API, with projected revenue of $40 million by 2027.
The ask: 750,000 euros for proof of concept, then a seed investment of 1.5 million in April 2022 for first commercial products.
The team includes Macbeth, who’s participated in three semiconductor startups and six others, including software developers, physicists and engineers.
Pitching: Co-founder Nathan van den Dool.
Concept: For 125 years, radiation for cancer treatments has seen few improvements. Optiflux uses a breakthrough in space optics from the European Space Agency in Paris. Van den Dool asked why we can put people on the moon, billions of transistors on a computer chip “but a cancer diagnosis can still be close to a death sentence?” Most treatments are intrusive.
Optiflux will change the way we treat tumors in the 21st century, he said. Radiotherapy is the current treatment for deep-seated brain tumors, but the beam can destroy healthy tissue along with the cancer, robbing patients of hearing and other senses. To avoid that, it requires 40 sessions during which the side effects can get worse, van den Dool said.
The solution is a lens developed by ESA that more precisely focuses radiation. Optiflux technology creates focal points of radiation inside the human tissue, allowing clinicians to hit the tumor but not the surrounding organs. The technology allows doctors to deliver the treatment in a single session instead of 40. The Optiflux technology has been developed with Europe’s leading cancer institutes. “They’re incredibly excited because they know this will change the way we treat tumors forever.”
Value proposition: Optiflux technology removes the need for a particle accelerator and radiation bunkers, the main cost driver in radiotherapy.
Market: The market for radiotherapy devices is 12 billion euros, growing at 8 percent per year. If Optiflux can sell just one out of every 15 units, projected revenue is 1.1 billion euros.
The ask: Optiflux has secured funding for the first prototype. The team will go for a Series A of 5 million euros in 2022.
Team: Optiflux has a six-person team that includes physicists and engineers.
Pitching: Gert-Jan Roelofs, commercial manager
Concept: Hica Solutions uses gamification and a data dashboard for caregivers and caregivers to revolutionize rehab for stroke victims.
Roelofs told the XL Day audience that 80 percent of stroke victims suffer decreased arm and hand movement and must undergo intensive rehabilitation treatments to regain mobility. Repairing that means repairing the communication between the brain and arm and hand, Roelofs said, and eighty percent of regaining that use is related to feedback. That part is currently underdeveloped in rehab programs, he said. But patients often fail to continue the exercises at home.
Value proposition: Hica is developing a hand controller that improves feedback by two times, allowing the patient to recover at home in a gamified environment. About 95 percent show improvement in hand and arm movement, reducing the cost of rehab by 30 percent.
Market: The market for upper body rehab (arm and hand) is 22 billion euros. The beachhead Dutch market is valued at 56 billion.
Progress: Demos in clinics. Validation starts in 2022 with a CE Mark.
Business model: B2B
The Ask: 1.5 million euros to develop the first generation of Hica products.
Projected revenue: Positive cash flow by 2025 and topline revenue of 56 million euros by 2026
Team: Six, including technologists and designers
Pitching: CEO and co-founder Jesus Kalergis
Concept: Viffera is developing an end-to-end authentication solution that leverages advanced sensor and biometric algorithm technology to protect access to company’s data. “We’re building a technology platform based on sensors and ID-matching software that can be embedded into any work device and easily integrated into any business application,” said Kalergis. “We’re delivering an end-to-end approach to securing identity” Viffera combines various authentication technologies – credentials, identity verification and biometrics.
If employees had to verify everything with existing technology, productivity would plummet as they spent all their time proving who they are. Currently, employees lose about one month per year on authenticating actions. “Corporates need strong authentication, and they need tools to support it without the burden of current technologies,” Kalergis said. “This is why we created Viffera.
The first Viffera product is the Vmouse, an intelligent verification computer mouse that protects data without interrupting workflow. Finance needs it most and needs it first,” he said, because the industry has five times the attacks targeting employee identity. Breaches cost 20 percent more than other sectors.
The market: 40 billion euros. Banking in Europe alone is a 1 billion euro market.
Value proposition: Viffera offers the Vmouse and the SDK software platform, selling through system integrators to reach banking and other markets with critical data.
Progress: An MVP and a pilot project with Eurobank
The Ask: 1.5 million euros to build a prototype and secure more commercial pilots
Projection: By year five, 60 million euros in revenue.
Team: Eight, including advisors and team members with skills in microelectronics, software, cybersecurity and risk management.
HighTechXL, based in Building 27 on High Tech Campus Eindhoven, is a deep-tech venture builder and accelerator that sources the latest technology at top research institutions, including CERN, Philips, TNO and the European Space agency, then matches new tech with promising talent.