The Trajectory of How Grenoble Became a European Deep Tech Hotspot
This article introduces how Grenoble is rapidly emerging as a deep tech hub in France. In particular, it highlights large-scale funding and success stories of emerging companies, and we can gain insights into the latest technological trends and growth industries from this article.
Located at the foot of the Alps, Grenoble has long been France's secret weapon in deep tech. However, a series of large-scale funding rounds has brought an international spotlight to the city, which the French media has long called the "Silicon Valley of France."
The most high-profile deal was the €2 billion funding (including €850 million in equity) raised in September by low-carbon battery startup Verkor to build a gigafactory for mass production in 2025. However, it has been a big year for other Grenoble startups as well. Aledia raised $120 million for micro-screen technology, GreenWaves raised $20 million for fabless semiconductors, Quobly raised $19 million for quantum computing technology, and Renaissance Fusion raised $19 million for nuclear fusion technology.
According to Dealroom, Grenoble ranked 4th among European cities (tied with Munich) in deep tech funding in 2023, behind Stockholm, Paris, and London. The breadth of these startups' technologies speaks to the depth of Grenoble's scientific expertise, where research institutions and industry collaborate, including universities like CEA-Leti and Université Grenoble Alpes, public-private innovation hubs like the MINATEC micro-nanotechnology innovation campus, and scientific talent.
What Grenoble lacks is venture capital. However, with venture capital and French policymakers now showing great interest in supporting deep tech champions, there are signs that Grenoble is in the right place at the right time.
"It's like California," says Benoit Lemaignan, co-founder and CEO of Verkor. "There's a mix of intellectual stamina and entrepreneurial spirit. Plus, there's time to enjoy yourself after work, and there are mountains. It's a place full of energy."
A Magnet for Talent
Lemaignan's personal and professional journey symbolizes why deep tech entrepreneurs have long viewed Grenoble as fertile ground.
After a career as an aerospace engineer, a growing concern for the environment led him to Grenoble. He was drawn to the greentech community, where advanced researchers work seamlessly with private companies. He eventually co-founded a biogas startup and took it public before leaving to start Verkor.
He says it was only natural to base himself in Grenoble because there was already a community of researchers working on battery research, and there were plenty of enthusiastic collaborators and talent to develop early versions of Verkor's batteries. "We were able to leverage many people who brought unique expertise," he says.
You can't walk the streets of Grenoble without meeting someone in deep tech. According to Invest in Grenoble Alpes, the city's economic development agency, there are 30,000 researchers working in Grenoble, half in public research institutions and half in private ones. According to INSEE, the French statistics agency, 7.6% of all employment in Grenoble is in R&D, the highest in France. The proportion of engineers in total employment in Grenoble is 9.2%, the second highest after Toulouse.
Such jobs are scattered throughout public institutions like the Université Grenoble Alpes, one of France's leading engineering schools with 60,000 students and considered a leader in nanoscience and nanotechnology, and CEA-Leti, one of the world's leading research institutes for electronics and microtechnology.
Furthermore, branches of major tech companies such as Google, Salesforce, Oracle, HP, and Apple stand side-by-side in multiple innovation parks and campuses scattered throughout the region.
According to Nicolas Beroud, director of Invest in Grenoble, researchers in the region don't care whether their research is academic or corporate. The main motivation is to make an impact by finding practical applications.
"The real question is, what can you do with this innovation?" he says. "It's not just research for the sake of research. The most important thing is to find the right application."
A History of Electricity
Grenoble's development as a European deep tech hub dates back to the 19th century. Near the mountains, hydroelectric power plants were developed in Grenoble, attracting researchers in electricity. Later, Nobel Prize-winning physicist Louis Néel left Nazi-occupied Paris and set up shop in a friend's laboratory in this southern city. After the war, Néel decided to stay, persuading the government to establish a nuclear research center there, which evolved into CEA-Leti. He also persuaded the National Center for Scientific Research (CNRS), France's top research institution, to open its first major laboratory outside the Paris suburbs.
As Grenoble grew, the ties between academia and industry became unusually strong.
According to Paul-François Fournier, executive director of Bpifrance Innovation, university researchers in France have historically been reluctant to collaborate with private companies, viewing entrepreneurs as Silicon Valley cowboys and downplaying the idea of profiting from public research. To change this mindset, the French national bank Bpifrance has made evangelizing these ties and promoting the commercialization of public research a pillar of its €3.5 billion deep tech investment plan.
"We need to extract value from research centers and create new businesses," says Fournier. "That is the ambition of the deep tech plan. It's about embracing a new wave of innovation and connecting large research centers with the startup ecosystem."
This mindset is part of Grenoble's DNA and is a major reason why Grenoble is becoming a deep tech powerhouse.
"Our model is called 'Lab to Fab'," says Jean-René Lèquepeys, Deputy Director of CEA-Leti. "We develop the technology our partners need in collaboration with them. The majority of our revenue comes from projects with industry and some institutional organizations."
Consider the example of Soitec. This semiconductor company was founded in 1992 by two CEA-Leti researchers who developed a new method for manufacturing silicon wafers. It quickly achieved international success.
In late September, Soitec cut the ribbon at the opening ceremony of a new 400 million euro factory built on the outskirts of Grenoble. The ceremony was attended by French politicians, including European Commissioner for Internal Market Thierry Breton and French Minister for Industry Roland Lescure. The event was welcomed by politicians as a new step toward securing France's technological sovereignty.
Soitec's silicon wafers are used by other companies to manufacture semiconductors. It is an example showing that the growth of a cluster of microelectronics companies creates a virtuous cycle that attracts more companies. Among them are partners like STMicroelectronics, which opened one of its major R&D facilities in Grenoble more than 50 years ago. In June, STMicroelectronics announced a partnership with U.S. semiconductor manufacturer GlobalFoundries to build a new 7.5 billion euro semiconductor plant on the outskirts of Grenoble.
"This is the largest industrial investment in decades, excluding nuclear power," said French Minister of Economy Bruno Le Maire at the contract signing ceremony with company executives. "This project will increase Europe's production capacity by 6%."
Taking the Lead
Deep tech developed in Grenoble's laboratories was not previously the type of thing that would attract the attention of venture capital.
"The funding goals are much larger, considering the types of startups and the development of industrial components," says Romain Gentil, President of French Tech Alpes Grenoble. "Huge amounts of capital are needed to support long-term research. Most of them are industrial startups born from laboratories, and they are capital-intensive."
Various factors are shifting in Grenoble's favor. This includes the 43 billion euro EU Chips Act, which was launched this year to promote public and private investment in European semiconductor production.
On a more local level, there is the 54 billion euro "France 2030" plan, which the government formulated in the wake of COVID. It invests in advanced technologies considered strategic for the country's economic future, such as semiconductors, hydrogen, AI, and quantum computing. Grenoble has major research centers in all of these fields.
"Grenoble was already a hub for deep tech," says Bernound. "But after COVID, everything is accelerating. Many startups were already working on these themes. However, they were not at the industrialization stage 10 years ago. Now that they are moving into production, this activity is becoming more visible."
Meanwhile, VCs across Europe are prioritizing deep tech as a key investment theme, betting that research-based products will be a great opportunity to create new markets not already dominated by companies in the U.S. or China.
According to Dealroom, Grenoble's deep tech startups attracted 1.2 billion euros in 2023, ranking 4th among all European cities alongside Munich, behind Paris and London. Stockholm tops the list with 3.2 billion euros, with Northvolt raising 1.2 billion euros and H2 Green Steel raising 1.5 billion euros.
Deep tech products born in Grenoble are now starting to attract the attention of VCs.
Grenoble includes a 21 million euro round raised in July by MICROOLED, which manufactures high-resolution, low-power OLED microdisplays for devices such as smartphones and tablets.
Co-founders Eric Marcellin-Dibon and Gunther Haas met while working at the Paris electronics giant Thomson, where they developed OLED technology for large-screen televisions. In 2007, they decided to spin out this technology and adapt it for small form factors like cameras and smartphones.
The founders moved to Grenoble and worked on technology development with researchers at CEA-Leti. Because the displays are built on silicon wafers, they partnered with other semiconductor companies to refine the technology. For most of its history, it was funded by partners such as STMicroelectronics, which acquired a minority stake in 2012.
In recent years, as MICROOLED's business has grown rapidly, VCs have begun to take notice. The latest funding round, led by Jolt Capital and Bpifrance, is for MICROOLED to develop and commercialize technology for smart glasses.
Marcellin-Dibon says that being in Grenoble was crucial to the company's long-term development. He says that at the time of its founding, they were able to rent cleanrooms (sophisticated, contamination-free rooms designed for microelectronics work) at Grenoble's MINATEC innovation campus, a joint venture between CEA-Leti and the Grenoble Institute of Technology.
"Grenoble has the infrastructure in place," says Marcelin Dibon. "For a small company, building a cleanroom is too expensive. At Minatec, we were able to develop the company. Grenoble has expertise in semiconductors and microelectronics. Most of our employees come from this ecosystem."
Quantum computing startup Quobly also raised 19 million euros this summer. This Grenoble-based startup grew out of research conducted at CEA-Leti before spinning out. According to Maud Vinet, CEO and co-founder of Quobly, the company is establishing a startup to pursue commercial applications while operating a joint lab with CEA-Leti.
The company was originally named Siquance, but rebranded with this funding round. Vinet explains that "Qu" stands for quantum, and "obl" stands for Grenoble. She added the "y" because it sounded better.
"Friends in the semiconductor industry call Grenoble a 'hidden secret'," says Vinet. "In our new company name, we incorporated Grenoble's values—the values of moving from research to technological innovation and then to commercialization. By making quantum mechanics a symbol of everything happening in Grenoble, we wanted people to know what this city means for innovation."
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