In the world of entrepreneurship, there are some slamming, impressive words, and incubator is clearly one of them.

Coming straight from the United States, the incubator concept gradually developed in Europe in the 2000s, in all sectors of Tech, and since the end of Covid, a similar phenomenon has been observed in the crypto universe.

Today, there are more than fifty Web3 and crypto incubators in Europe, and almost a dozen in France.

"These structures are an alternative for entrepreneurs, especially at a time when funds are being rather cautious," analyses Ivan de Lastours, head of Crypto & Blockchain at Bpifrance.

Still, it's not necessarily easy to distinguish between incubators and know what they respectively bring to the start-ups they will help to create and support.

That's why we've decided to review them!

Atka, experience as a strong point

Present in the ecosystem for almost 10 years now 🤯, the three founders of Atka (launched in 2018), Pierre Laurent, William Piquard and Gabriel Rebibo have decided to launch a new cohort of Web3 projects. This one has just started.

Atka has notably supported Mangrove, which managed to raise $7.4 million at the end of February, and above all Morpho Labs, which for its part closed an $18 million funding round in the summer of 2022.

In practical terms, their incubator/accelerator model is similar to that in vogue in the United States, which is very focused on the objective of raising funds. To achieve this, Atka has an entity dedicated to investing in incubated projects, capable of allocating up to €250,000 to each project, as well as a network of proven partner venture capital funds.

To make its selection, Atka auditions around sixty projects. In the end, the incubator selects a maximum of 5 for a 6-month programme. During this programme, and according to milestones established with each project, Atka gradually deploys the allocated capital, in exchange for a percentage of tokens or equity in the project.

"Previously, we chose to support projects one by one, as and when opportunities arose, but this was too risky a model and difficult for our network of investors to follow," explains Gabriel Rebibo.

To become more efficient, Atka has therefore opted for a cohort system, which it has just set up, and which is more in line with the classic operation of an incubator. "It also allows us to better structure our model, which could previously have seemed a little home-made," continues William Piquard.

The Start-up Studios model

In this model, it is the start-up studio itself that takes on the role of co-founder to launch the company.

One of the Web3 start-up studios in France is 3founders, which is part of the Hexa ecosystem.

In the first instance, 3founders will source projects in line with its investment thesis and will fully fund its needs until its first fundraising round, generally in seed. In return, 3founders will invest up to 30% of its equity in the company. "After that, the company takes back its autonomy", explains Florent Quinti, who is responsible for the Web3 part.

A former employee of Ledger, Ludovic Simon founded the start-up RiverFlow with 3founders, which specialises in blockchain data for businesses. "Undeniably, it was the fact that Hexa specialises in the product for businesses and that the model has been proven for around ten years now that prompted me to join the programme," he explains.

But the best-known start-up studio in the French ecosystem is PyratzLabs, co-founded in 2021 by Bilal El-Alamy and specialising entirely in Web3. "With my experience in Web3, I had a fairly clear vision of the market's needs, particularly in terms of Gaming", he explains.

For each project, PyratzLabs invests €500,000 which gives it between 15% and 20% of the company's capital. In particular, the start-up studio has supported Dogami, a sort of Web3 Tamagotchi that has managed to raise more than €15 million since January 2022. Billy, which specialises in NFTs, and Bubblemaps, which recently completed a €3 million funding round, are among the other companies being supported.

Since this year, PyratzLabs has moved away from its purely start-up studio model by launching an acceleration programme for companies that have already been set up (like Bubblemaps). It has also launched an offering aimed at large companies wishing to develop Web3 and AI projects 🤖.

Warning all the same, this start-up studio model, which involves a large stake in the companies, "can help to put off investors for a potential new round of funding", explains a VC fund manager.

Ecosystem logic with H7 and iExec

Launched in April 2019, the Lyon-based H7 incubator has been offering a dedicated Web3 support programme since September 2022. What makes it special? It is completely free of charge for companies who, by joining it, benefit from help with marketing, sourcing funding or even advice on developing their business.

"Our programme is not conditional on an equity investment at the end of the 4 months of support," says Kelly Green, start-up manager at H7.

In return, companies must agree to work with iExec, which specialises in the sale of computing power and launched the incubator with H7 solely on the basis of private funding.

A large proportion of the experts made available for the programme are in fact from H7 or iExec. The interest for them is that, following the programme, promising companies will become part of their ecosystem.

In contrast to previous cohorts, those for 2023 and 2024 will only include companies with a crypto-native profile.

"Web3 is a very specific sector with its own particularities, particularly in terms of regulations, which fluctuate greatly. There are also structures like DAOs that you don't find elsewhere," adds Kelly Green.

Cube3, the newcomer

Officially inaugurated on 19 October in Angers, Cube3 is the other major incubator/accelerator specialising in Web3 in the region, launched entirely with private funding.

For its launch, Cube3 will incubate or accelerate around twenty projects covering a wide range of Web3 themes.

"As soon as the project is selected, we take a stake that never exceeds 10%. The idea is to get involved with the project so as not to turn Cube3 into a mere co-working space," explains one of its co-founders, Valentin Demé, the current chairman of the structure.

Companies must also take out a monthly subscription that helps to cover part of the cost structure made up of the resources made available. "It varies depending on the company and never exceeds €1,000," says Valentin Demé.

Finally, Cube3 also offers a deferred service for projects so that they can repay the services offered by Cube3 in 3 - 4 years when one of the objectives, such as raising funds, is achieved.

Cube3 does not have a direct VC arm but works in partnership with Nebulae and Stake Capital.

"We also have our entrances in the United States", assures Valentin Demé, who is also counting on his good knowledge of the Anjou area to convince local entrepreneurs to invest in certain projects.

"Personally, I don't see any strong points emerging in Cube3's model, which will have to prove itself", is the cautious view of a good connoisseur of the sector for whom the proliferation of incubators is a sign of the sector's structuring.