In France, FDJ Group has exclusive rights to operate offline and online lottery games, and point-of-sale sports betting. FDJ Group is also extending its online gaming offer open to competition and capitalising on its expertise to create new revenue sources: marketing solutions internationally, local cash collection and payment services, and the entertainment sector.
Interview with Pierre Tramon, Senior Analyst @FDJ Group.
What led you to implement an Open Innovation Strategy?
Large groups are generally looking at the changes they need to make in order to sustain and develop their business. Typically, what needs to be accelerated? Who are the new users? What new technologies should we be using?
We are convinced that proximity to the tech ecosystem is essential to help us answer these questions. The FDJ Group’s open innovation approach was initiated in 2015 to detect new trends early on and gain privileged access to relevant start-ups. And then, ultimately, to be able to integrate their solutions into our offerings, our pathways, and our services. To do this, we rely on our ecosystem. We have forged numerous partnerships with capital sales funds, i.e. investment funds, start-up accelerators, associations, think tanks and academic partners. Thanks to them, every year we identify around 1,000 new start-ups, 500 of which are studied in detail and 20 of which are taken through to the experimental stage.
We also invest beyond these partnerships with these start-ups on business issues. With FDJ Ventures, we invest more than €100 million in CVC funds and start-ups. So we’re actively participating in the hatching of the French tech ecosystem, and that’s also one of our key messages.
We are convinced that, especially in an increasingly complex and competitive environment, even if FDJ Group has a monopoly, we must continue to create new growth opportunities. And innovation is necessary precisely to anticipate these risks and look ahead to new models. We need to constantly adapt our consumption patterns. Not only that, but we need to anticipate regulatory changes, particularly in our competitive environment. And that inevitably requires a faultless connection with the ecosystem, both directly and indirectly, with all our partners.
How did implementing an Open Innovation platform change your approach?
We started working with innosabi in 2018, and it has had a real impact on the successful implementation of our innovation strategy for several reasons:
The first is that it’s a web app platform, which is fairly intuitive and user-friendly, so we have easy access to all the information we need about a start-up. Not just about the start-up, but also about the whole funnel. We’ve set up statuses so that we can keep track of the stage we’re at with the start-up. Typically, we have nurturing, study and hot deal, and we have lots of categories. Having these helps us to categorise start-ups and to have a clear funnel. We also add the actions we need to take on these files, so that we can find our way around more easily, organise things more efficiently and have a centralised point of information.
A second point is that it also allows us to monitor all the data in real time. Whether it’s where the start-ups are coming from, which partner has brought them to us, which theme is most represented in the sourcing of this deal flow, the gender of the founders, etc. innosabi can provide us with this data in real time very quickly, both in Excel format and in Power BI format, which helps us enormously with our quarterly and annual reporting.
Another point is that the platform is collaborative. We made it available to all the innovation representatives of our business lines in the various departments, which are roughly over 50 people. This allows them, if they have questions about start-ups or need some information, to go and look it up in our platform. That way, they can talk directly to these businesses. It’s a very collaborative approach.
And we also give these representatives access to all the trend reports and strategic reports that our partners produce and that we put on the platform in the monitoring section. So they can look at these reports and gain insights and data and so on.
And the last one, the platform serves as an entry channel for start-ups to contact us. We’ve set up a form with innosabi called the Start-Up Link, which we communicate both externally in our signature, and via a QR code when we’re present at trade fairs. They directly can submit their application on this page, if ever during an event, for example, we did not have time to meet. This way, we still can add their profile in our database and process this information later on.
What are FDJ Group’s best practices for successful Open Innovation?
The first one is that we’re part of the Group’s strategy department. This puts us in a control tower that gives us a 360° view of all the Group’s activities. This is a real asset, and we have implemented a prioritisation strategy with the strategy team.
Currently, our focus is on 6 major verticals:
1/ Future of gambling: How do we design the next generation of gambling.
2/ Future of player experience: Simplifying and personalising the player experience and strengthening responsible gambling systems through better knowledge of players.
3/ Future of omnichannel distribution: Modernising FDJ Group’s distribution towards a model that is increasingly omnichannel and closer to the French people. How can we design innovative solutions for tomorrow’s points of sale?
4/ Web 3: Understanding and anticipating trends linked to the new decentralised Internet based on blockchain. What new activities based on blockchain can we suggest?
5/ Tech for Good: Set FDJ Group as a pioneer in sustainable, responsible and positive-impact innovation, for the benefit of its activities and the whole society. How to use technology to reduce our environmental impact?
6/ Artificial Intelligence: Finding solution to improve our productivity, to make it easier to find information both internally and externally, notably with the Generative AI.
Another best practice is to take an ecosystem approach. We have a fairly extensive network of funds, incubators, and accelerators. We were supported by two pioneering investment funds, in France and internationally, such as Partech, to help us with our deal flow and share their investment expertise with us. Thanks to them, we can really benefit from a watch on emerging markets and technologies. We’re also a Limited Partner in specialist funds like Level-Up, which specialises in the mobile games studio sector, or Trust ESport, which specialises in e-sports, or Sparkle Venture, which specialises in Web3. The ecosystem we’ve built is highly complementary, giving us access to high quality deal flow, co-investment opportunities and the ability to monitor emerging markets and technologies.
And lastly, I’d say that we have an evolutionary approach: in 2015 we began our open innovation approach. Then we set up an entrepreneurship programme, with the Innovation Lab, to encourage in-house staff to create innovative projects linked to the Group’s challenges. And now, more recently, FDJ Ventures has launched its own direct investment fund. The whole process we’ve built up around these major partners has enabled us to develop our skills in cultivation, experimentation and now in investment. It’s a model that we’ve iterated over the years and which is now a model of sustainable innovation serving the Group.
What is crucial in open innovation?
The FDJ Group’s raison d’être is to see France win, and FDJ Ventures raison d’être is to help FDJ Group win while helping French tech win. We’re a huge supporter of the French tech ecosystem, we’re a partner with France Digital, with the French tech mission, with the French Tech Corporate Community and with all these institutions that help to promote the growth and success of the ecosystem. And this proximity and close relationship between start-ups and major groups benefits an entire ecosystem. For us, it’s fundamental, and because major groups are the natural customers for start-ups, they contribute to their growth. Through our Ventures approach, we directly or indirectly support over 500 French and European start-ups, including 23 start-ups from the 2023 French tech Next40/120 class. We’re pretty proud of these metrics! And we’re continuing, through direct or indirect investment, to keep a close eye on the success of this ecosystem, by working with them as natural customers and enabling them to spread their wings nationally and internationally.
