Urgency, standardization, and collaboration are key to moving Europe’s integrated photonics industry forward. That was one of the main conclusions of day one of the PIC Summit Europe. At the photonics integrated circuits (PIC) conference hosted by PhotonDelta, industrial and academic leaders shared their vision for the future of photonics.
The world of photonics is going through a similar journey as artificial intelligence, a field that took decades to break through after its inception in the 1950s. “Like AI, photonics experiences peaks and valleys of hype, skepticism, and gradual progress,” said Laurens Weers. He is PhotonDelta’s CFO and led the panel in which investors— and one entrepreneur— spoke about challenges surrounding photonics investments and strategies for success.
The key question was: how can companies successfully secure funding for a business model built around “deep, deeptech” that has often yet to prove itself?
The deeptech investment landscape
Photonics, like AI in its early years, is often dismissed as a sector that may never really break through. Yet the panel had no doubts about whether the technology would succeed. “The question is when it will happen. The sector requires long development cycles, which makes getting the right financing crucial,” said Liz Duijves, VC Investor at Invest-NL.
So long-term financing is essential— and investors who understand that all the more so. “We look at the unique technology a company represents so that the long-term investment has intrinsic value. It is critical to find the right partners before you go to market. For us, value creation is much more important than profit,” said Sander Verbrugge. He is a managing partner at Innovation Industries, which operates a €500 million deeptech fund.
Being honest with your investor is also important. “Of course, you want to paint a nice picture to attract new investors. But you enter into a five-to-six-year relationship. In the European investment landscape, an honest story is fundamental.”
Strategic exits
A recurring theme in the panel was the risk involved in bringing breakthrough technologies to market. Bert Gyselinckx of imec.xpand emphasized the importance of strategic exits for PIC companies. Deeptech investors are often more interested in a company’s vision than short-term commercial success, especially in the early stages.
Duijves believes transitioning from an R&D-focused company to a commercial one is challenging once the technology is in place. “It’s not just about building the technology; it’s about taking it to market. Photonics companies are, logically, heavily focused on R&D. That shift requires a change of mindset and a cultural transformation within companies. Investors play a crucial role in supporting this transition phase.”
The investor bias
Navigating the biases of investors and industry experts is another challenge deeptech companies face. Flo Pattiwael (PhotonVentures): “It is difficult for investors to assess market maturity, especially when experts give conflicting opinions. A lot of technology is still in development. Our job is to bring different expert viewpoints and founders’ perspectives together and create a clear picture.”
A powerful tool, Gyselinckx said, is creating a sense of FOMO (fear of missing out). “Compared to the U.S., there are fewer venture capitalists (VCs) taking big risks in Europe. When more than three investors are looking at your file, you can use that dynamic to your advantage. Get investors to have FOMO.”
There is plenty of talent in Europe, but it’s not cheap
The panel also addressed the importance of talent in scaling photonics companies. With hubs such as ASML, NXP, and Philips, Europe has no shortage of expertise. However, as companies grow, shifting the focus from technology to solid management is crucial. Verbrugge emphasized that while plenty of talent is available, it does not come cheap. “At some point, you have to be willing to pay for good talent. As companies mature, there is a need to bring in experienced professionals.”
The future of photonics
The panel closed with a hopeful vision for photonics. It also became clear that the road to success requires patient investors and a well-developed innovation ecosystem. Pattiwael: “There are so many cool applications from smart people. We hope more investors join the ecosystem.”
In many ways, photonics today resembles the early stages of AI: slow to start but with the potential for transformative change. With the right investments, strategic planning, and a long-term focus, this industry could play a crucial role in the next wave of technological innovation.
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