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Deep tech

Investing in a leading position in the world of photonics

Approach

Direct investment

Partner

Including Brabant Development Agency, B-to-V Partners, and PhotonDelta

Date

April 21, 2021

Reading time

7 minutes

The Netherlands has a unique ecosystem for photonics technologies. EFFECT Photonics is a leading player within this ecosystem, capable of developing complex, fully integrated photonic chips. Boudewijn Docter (co-founder and president of EFFECT Photonics) and Frits de Vries (senior investment manager at Invest-NL) discuss their ambition to acquire a leading position in the world of photonics.

Fotonics is a chip technology that uses light signals (photons) instead of electrical signals (electrons). In a photonic chip, light signals can be generated, switched, filtered, and detected. The photonics technology developed by EFFECT Photonics is the only one in which all these functions can be combined into a single chip. This allows a complete optical system to be replaced by a single chip. With these photonic chips, high-speed data transmission over fibre optic cables is possible, but the technology can also be used to create very sensitive measurement systems, which find applications in fields such as the medical industry, automotive, and the agricultural-food industry. Future quantum computers will also extensively utilise photonic chips.

Boudewijn: “Our products also enable network builders to increase the capacity of existing fibre optic networks without having to lay additional cables underground. The demand for internet bandwidth is growing rapidly each year. Especially with the rollout of 5G connections and the increase in remote working, this trend has accelerated. Upgrading transceivers is therefore a cost-effective solution. Our products make data and telecom networks faster, more flexible, and more efficient, allowing the capacity of the network to grow exponentially without increasing energy consumption.”

The photonic technology developed in Eindhoven is the only one in which all these functions can be combined in a single chip


Boudewijn Docter

co-founder and president of EFFECT Photonics

Future quantum computers will heavily rely on photonic chips. Boudewijn adds: “Our products also enable, for example, network builders to increase the capacity of existing fiber optic networks without laying additional cables underground. The demand for internet bandwidth is increasing sharply every year. Particularly due to the rollout of 5G connections and the growth of remote working, this trend has accelerated. Upgrading the transceivers is then a cost-effective solution. Our products make data and telecom networks faster, more flexible, and more efficient, allowing the network capacity to grow exponentially without an increase in energy consumption.”

The importance of this Dutch technology is clear. Frits: “EFFECT Photonics has a unique technology with a fantastic team with global ambitions. This is very important for the Netherlands. Additionally, the company is part of a strong ecosystem in the Brainport region. This ecosystem is based on numerous knowledge institutions and innovative new companies and is also embedded in a strong supply chain. We believe that ‘light’ will play an increasingly larger role in technology, not only to facilitate the exponential growth in data usage but also to make microchips more energy-efficient.”

Invest-NL has invested € 5 million in EFFECT Photonics as part of a Series C funding round of € 36 million led by a group of investors including Smile Invest and Innovation Industries. Other investors include, among others, the Brabant Development Agency, B-to-V Partners, and PhotonDelta. 

The funds will be used to further expand the current line of optical transceivers and scale up production capacity. Additionally, R&D activities for the next generation of optical chips, capable of more than 400 gigabits per second, will be further developed.

High-tech scale-ups are often capital-intensive and require a long investment horizon, longer than most private financial entities can offer.


Frits de Vries

Senior Investment Manager at Invest-NL

L to R: Boudewijn Docter (co-founder and president of EFFECT Photonics), Frits de Vries (senior investment manager at Invest-NL)

High-tech scale-ups are often capital-intensive and require a long investment horizon, longer than most private financial entities can offer. EFFECT Photonics is a good example of this. Frits: “The nice thing about our contribution is that we not only help EFFECT Photonics to scale up, but also help strengthen the photonics cluster in the Netherlands.”

The relationship between Invest-NL and EFFECT Photonics has been long-established. Even before the official founding of Invest-NL, there was contact between the entrepreneurs and various team members of Invest-NL. Boudewijn: “The connection was immediate. We are both start-ups with big ambitions, so that was very relatable.” Frits adds: “The Effect Photonics team is professional and internationally oriented, which makes the collaboration always very pleasant.” Frits, as an industry expert in telecom and the semiconductor industry, has been involved throughout the process. Boudewijn: “Apart from Frits, we have also had a lot of contact with Reda Atibi and Ruud Zandvliet. It’s a great team of ambitious professionals. Recently, Ewout Ruijs has become our main contact person. Ewout and Frits are now our primary sparring partners.”


The willingness of Invest-NL to thoroughly understand the proposition of EFFECT Photonics surprised Boudewijn. Semiconductor technology is not an simple matter, and the application market, equipment for data and telecom networks, is also an highly technical field full of acronyms and specific terminology. Boudewijn: “Invest-NL truly wants to grasp the matter. That says a lot about their ambition as an investment company.”

The future of the relationship between Invest-NL and EFFECT Photonics looks promising.
Boudewijn: “I think it is important and will remain that the government makes funds available for public-private partnerships to support strategic technologies such as photonics until the industry is large enough to sustain long-term competition with Asia. Invest-NL can certainly continue to play a role in this, as well as other instruments such as the National Growth Fund and the Innovation Credits from RVO.”

Frits: “The outlook is sunny. It’s fantastic to see how the company has grown from a two-man operation in 2011 on the TU/e campus to a company of today with more than 200 employees. The ambition of Effect Photonics is to become the world’s market leader with a portfolio of 15 to 20 products, and we are happy to support Effect Photonics in this mission.”

I hope that technological advancements can help us address the major challenges of our time: climate change, food scarcity, poverty/inequality


Boudewijn Docter

co-founder and president of EFFECT Photonics

Creating social impact with technology is second nature for Boudewijn and Frits. And in this, the Netherlands can take the initiative. Frits: “Certainly. Many deeptech scale-ups play an important role in addressing societal transition challenges, not only in the energy transition and sustainability, but also in healthcare, food provision, or safety. Technology will play a key role here. The Netherlands has a strong position in the field of Hightech Systems and Materials (HTSM), such as photonics, nano- or quantum technology, but also in Life Sciences or technologies for making chemistry more sustainable. By bringing this knowledge to market through entrepreneurship and subsequently exporting it, we can make a significant impact worldwide as a small country!
Boudewijn fully agrees: “I believe that a fast and efficient communication network is an enabling infrastructure for many innovations that make our society more sustainable, safer, and healthier. I hope that technological progress can help us solve the major challenges of this era: climate change, food scarcity, poverty/inequality. However, this will also require a change in behaviour. Gaining more insight into which actions truly have an impact is important here. I also believe that good information provision and data processing are crucial. I hope we can contribute to this and help lead the way for the Netherlands.”

Questions about this topic? Frits is happy to help!

Frits de Vries

sr. investment manager