Sofinnova Partners is a leading European venture capital firm specialised in Life Sciences. Based in Paris, France, with offices in London and Milan, the firm brings together a team of over 40 professionals from all over Europe, the US and Asia. The firm focuses on paradigm-shifting technologies alongside visionary entrepreneurs. Sofinnova Partners invests across the Life Sciences value chain as a lead or cornerstone investor, from very early-stage opportunities to late-stage/public companies. It has backed 500 companies over 50 years, creating market leaders around the globe. Today, Sofinnova Partners (@SofinnovaVC) has over €2 billion under management.
Here, Bio Market Insights’ Liz Gyekye catches up with Michael Krel, partner at Sofinnova Partners’ Industrial Biotechnology team.
Liz Gyekye (LG): Welcome to 5 Minutes With. Please summarise your role and what you specialise in?
Michael Krel (MK): I am a partner at Sofinnova Partners’ Industrial Biotech arm. This fund strategy is dedicated to start-ups with an emphasis on biology enabled solutions for food, feed, agriculture, materials and chemicals, and represents more than €200m under management.
LG: Before going into your current role, what did you used to do?
MK: Prior to joining Sofinnova Partners, I spent six years in industrial biotech start-ups, holding business development positions. Additionally, l was a consultant focused on R&D strategic and organisational issues.
LG: How is the investment environment at the moment?
MK: In recent times, we have invested in eight companies and will have two more investments to complete by the end of spring. These include companies involved in the synthetic biology space, agrochemical sector, bioengineering sector, among others. With our Green Seed Fund, we have invested €22m in six bio-based companies, including Finland-based biotechnology firm MetGen, UK-based synthetic biology company Synthace. Through the Industrial Biotech fund we have also backed a biopesticide company called Biotalys.
Overall, today, we have 16 companies in our portfolio.
LG: Out of all the topics you cover, which one is seeing strong demand?
MK: Agrochemicals is seeing strong demand, as well as food and feed ingredients. These are the areas where your products have the most interactions with living organisms. In the last five years, we have seen a tremendous shift towards consumers buying sustainable products, especially when it comes to “in me” products (including biopesticides and food ingredients) and “on me” product such as green cosmetics.
LG: What challenges do your companies face?
MK: The challenge we have is to make sure that B2C companies can see the value in the products that start-ups can make. Although some big brands recognise this value, some still do not want to share the additional value with smaller companies. However, essentially, the small-to-medium-sized companies need to convince the bigger brands of the value that they can bring to them. There is also the issue of offering higher value, better performing products to the market. In the past this did not happen, but more and more firms are doing this now. So, their products have great value. A lot of companies are looking at higher value bio-based applications, where you can also justify a higher sales prices because of their performance.
LG: What advice would you give to somebody starting out in the bio-based sector?
MK: You need to make sure that your product adds value to the market. You can’t be green for the sake of being green. It needs to bring higher value to your customer and perform strongly.
LG: What’s your favourite sustainability product?
MK: I love biodegradable plastics.
Michael Krel will be will be speaking at the World Bio Markets Conference, the leading assembly for the bio-based economy, in Amsterdam, the Netherlands, which takes place from 2-4th November.