Interview with Philippe Detours, general partner at Demeter, in charge of Infrastructure funds, and a member of its management board. Demeter is a major player in private equity for the ecological and energy transition, with €1B under management and more than 120 companies supported.
1 / What main investments have already been made by Demeter in the smart mobility?
Demeter has a vehicle dedicated to smart mobility, mainly infrastructures, through the Ecological Transport Modernization Fund (FMET). We have invested in electric vehicle charging networks (in Lyon with Izivia, in St Etienne with eTotem), in NGV refueling networks with Proviridis, in stationary energy storage by reusing second-life batteries from Renault electric vehicles, in mobility hubs like that of the future St Denis Pleyel station (Grand Paris Express).
The investors of this fund (French companies APRR, SANEF and Vinci Autoroutes) have also enabled us, on a case-by-case basis, to take position at the boundary between the venture and infrastructure. We have noticed that many young companies offering new forms of mobility and wishing to raise funds come up against the limits linked to the structure of the private equity market:
– The ecological modernization of transport can only be done through innovation in the service offered. These companies therefore offer new mobility services, with no performance or traffic history, and for which a traditional infrastructure fund will find it difficult to identify a proven business model and a predictable and recurring source of cash flows;
– Transport infrastructure or services are by definition “capital intensive”, which generally leads to investment needs greater than the amounts allocated by VC funds (at least in France) which are more for the most looking « asset light » investments.
The FMET has the agility to overcome these constraints and contribute to the emergence of new French champions of smart mobility. Gireve (interoperability of EV charging networks) and Cityscoot (free-floating electric-shared scooters) are two examples of this strategy. The FMET will soon announce a new “Infraventure” investment offering a new form of clean mobility in the city.
“We have the capacity to support projects at all stages of development”
2 / Do you have other funds involved in smart mobility?
Absolutely, our “growth” funds have invested in SMEs of the mobility sector and our “Innovation” funds in many start-ups. The Paris Fonds Vert fund is interested in SMEs in soft mobility, shared mobility, logistics optimization. The Demeter Smart City Innovation fund continues to look at investment opportunities in innovative smart mobility start-ups in cities and regions. And Demeter is further strengthening its financing offer with Green European Tech (GET), a Venture fund of €250M which will support European start-ups in growth, particularly in the mobility sector. We have the capacity to support mobility projects at all stages of development, innovation, growth and infrastructure.
3 / What types of projects are you looking for as a priority?
The reality is that we look at all sectors, even if some are more mature than others from a technological point of view. There is not a single sector, or a single technology, which will prevail at the expense of others. There are as many solutions as there are uses. The difficulty is to understand the needs of each market segment and the adequacy of the proposed solution to meet this need.
“Soft forms of mobility will be further developed”
4 / How do you see the development of smart mobility in the coming years?
Smart mobility is at the confluence of several long-term structural changes in our society (energy transition, digitalization, redevelopment of urban spaces, public health, etc.). Soft forms of mobility will be further developed, especially in urban areas. The approach of mobility is more and more thought of as a service, and less and less attached to the possession of a vehicle. These changes will lead to a redistribution of roles within the transport players: car manufacturers, energy companies, communities, transport companies, transport infrastructure managers, logisticians … all these players are rethinking their current business model to adapt to this new deal.
5 / Could the Covid-19 crisis curb the growth of these markets?
It is too early to be certain. We may imagine that public transport will suffer durably of this crisis. Alternative solutions, bikes, free-floating vehicle-share services could take advantage of this situation. In China, we observe in March 2020 (less than a month after the start of deconfinement), an increase in the sale of vehicles (3.6X sales in March 2019), and a sharp decrease in passengers in the metro (-50%).
 “Growth” funds have invested in: IES (power electronics and EV charging stations), Comarth Engineering (EV manufacturing), Fermentalg (biofuel), Optimum Automotive (management and optimization of vehicle fleets), Hesus (optimization site logistics).
 The “Innovation” funds have invested in Nawatechnologies, McPhy, Ergosup (for the electrification of transport or alternative fuels) or even Zenpark (new services), GEOFLEX (ultra-precise geolocation in particular for autonomous vehicles and ADAS), OUTSIGHT ( 3D semantic camera for the city and mobility), PONY (scooters and electric bikes).