Disrupt established verticals, innovators told

Disrupt established verticals, innovators told

Tuesday, September 1, 2015
Jean-Marc Patouillaud believes that capital issues will restrict market entry

EiG Start-up Launchpad judge Jean-Marc Patouillaud believes that disruptive ideas to shake up the existing industry are a better investment prospect than new gaming operators trying to enter a saturated market.

Patouillaud is a managing partner of Partech Ventures, a venture capital firm with $650m ($577.5m) under active management which was the subject of a €13m investment from French gaming group Française des Jeux (FDJ) earlier this year.

With the market seeing huge mergers, tax increases and massive marketing and technology spend, Patouillaud believes that the amount of capital needed to compete with the established big boys means that the most interesting start-ups are those who bring something new to the existing market. 

The EiG Start-up Launchpad competition gives five short-listed fledgling firms the opportunity to pitch to a panel of investors, including Patouillard, GamCrowd chairman Ian Hogg and Burckhardt Bonello, founder and chief executive of Found Fair Ventures, and a highly targeted audience of industry professionals at next month’s Berlin event.

“My advice to the start-ups we see is that you’d better come with something new in an old space than with something old in a new space,” Patouillard told TotallyGaming.com.

“Don’t add yourself to the long waiting list of being yet another betting or gaming company because you will have a capital issue. 

“Consolidation is taking place probably because the sector has become very capital intensive. For example, you must be able to develop dozens of games to make sure at least one of them will make it to the top charts. There is a crucial need of critical mass for development and distribution.

“Investors in start-ups must track the capital-efficient new ideas or technologies. As usual, the entrepreneurs coming with an out-of-the-box approach are the most interesting.”

Patouillaud believes that the link between his company - which has invested in the likes of LaFourchette, Sap, Teads and Yelp over the last 30 years - and FDJ will be of mutual benefit to both organisations, with Partech offering its digital expertise to the gambling and lottery operator. It was announced in July that FDJ had invested €5m in the Partech Entrepreneur II technology and digital fund and €8m in a ‘venture’ segment related to developing business models.

“Partech has a 360-degree vision on emerging trends in IT and internet, while FDJ are more focused on the betting and gaming space itself,” said Patouillaud.

“As in many other cases, ideas and innovation are often inspired by other industries than yours and the barbarians do not necessarily come from where you expected them to.”

* EiG 2015 takes place at Arena Berlin from October 20-22. To find out more or register please visit www.eigexpo.com.

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