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Deep Dive: Lessons On Industrial Startups From Grenoble

France is pouring billions of euros into programs that take innovations out of the labs and turn them into innovations that spawn new manufacturing. Grenoble, in the foothills of the Alps, is ground zero for these initiatives.

Grenoble has become France's Deep Tech hotspot.
Grenoble has become France's Deep Tech hotspot.

Magnets are not the first thing that comes to mind when thinking about breakthrough innovations. But as it turns out, magnets are everywhere and in everything.

Take transport and mobility, for instance. Magnets are used in electric motors. Not just the main motor, but also the motors that move the seat, the side mirrors, and the windshield wipers. Now zoom out, and you'll find magnets in bicycles, e-scooters, trains, planes, and boats.

Zoom even further out, and you'll find magnets in most electronics, robots, refrigerators (and not just ones for holding notes or pictures of cats on the door), air-conditioners, and MRI machines. Earlier this year, French utility EDF built a wind farm with 80 wind turbines, each containing about 80 tons of magnets, so about 800 tons of magnets for the whole project.

The problem for Europe in general, and France in particular, is that 98% of all magnets currently come from China. Over the past four decades, the region got out of the business of mining the iron and other materials (an environmentally nasty industry) needed for magnets and processing the raw materials (resource intensive with costly labor) by letting it all happen in Asia.

As demand for magnets soars thanks to more innovations, Europe is increasingly beholden to the trade demands of China. Beyond the geopolitical implications, the disruptions to supply chains for a wide range of products have catalyzed the desire for greater economic sovereignty across Europe, most notably in the realm of technology.

And so this brings us to the small factory just opened in the city of Grenoble by a modest startup with the clunky name of MagREEsource. Co-founders Erick Petit, CEO, and Sophie Rivoirard, CTO, were explaining the hidden power of the magnet industry to me and a handful of journalists visiting the city for a tour of its Deep Tech ecosystem. MagREEsource has developed technology and machines that address this issue through a recycling process that allows the company to harvest magnetic material from discarded items like old e-scooters and then refine it to be used in new products.

Only about 1% of magnets are currently recycled. MagREEsource's sources modest factory is effectively demonstrating the capability of its process with the goal of opening a larger factory in 2027.

One of the biggest backers of MagREEsource is the French government. France is spending billions of euros to forge a tighter link between its Deep Tech startups and its industrial economy. Grenoble, which is one of Europe's top Deep Tech hubs thanks to its historic ties between industry and academia, has become ground zero of the government's programs to rebuild its industrial base by pushing more innovation out of university labs and then scaling up the startups to maximize their economic impact.

"When we talk about dependence on critical metals for the energy transition, we're right in the middle of it," Petit said. "This is what the European market needs today. Using our recycled material means we're independent of the Chinese."

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