[ 00:00:00 ] Hello everyone, I’m Thomas. Everything is in the name. It’s Rail with AI. What were they thinking? The stories behind Europe’s most promising clean mobility startups. Hello, my name is Dan Sobovitz and in this new podcast, I’ll be talking to some very successful startup entrepreneurs. Women and men who are disrupting mobility as we know it. They’re making it more sustainable and more inclusive, both for their passengers and for their employees. In this podcast, I won’t be asking them about their pitch decks or their growth rates or their shareholder models. I’m much more interested in what were they thinking. How did it feel to go the lonely road of an entrepreneur? Did people follow them easily or did they think they were crazy? Was it fun all along or mostly frustrating?

[ 00:00:44 ] And deep down, did they really believe they were going to make it this far? This time, I have in the studio with me Thomas Muffat-Jeandet, co-founder of RAILwAI, or perhaps I should pronounce it Rail. AI, because that’s how it’s spelled. In any case, in your company, you are leveraging data for efficient rail maintenance. So first, Thomas, welcome to our podcast. Hello, Dan. Thank you for inviting me. Great to have you. We came from the extreme cold of Finland into the warm and cozy studio here in Helsinki. Before we really speak about RAILwAI, let’s talk about you. Both you and your co-founder, Jean-Michel, had comfortable jobs living nicely in the south of France, where it’s always warm, not like here in Helsinki at this time. I was still living in Paris.

[ 00:01:26 ] Ah, OK. So still nice, still comfortable. You were both holding executive director jobs or partners. You were at Sinovate. Why did you risk this comfortable life, you in Paris and Jean-Michel in the south of France, for something which felt much less secure and much less known? In my life in Paris, it was exactly during the first shutdown with COVID. I was a bit fed up of living in Paris because it was 25 years. I left the French Riviera. And for the business with Sinovate, it was a consultancy company. So we were mostly using people to deliver missions at our customers. And the more people you have and the more potential problems and things you have to manage. And with Jean-Michel at that time, we were a bit fed up with that life.

[ 00:02:12 ] And we decided to talk with our partners and to share our shares and to go back for me in the south. And I was wondering what to do. I was too young to go to fishing or to go to golfing all day. It’s never too young. Jean-Michel convinced me on a new idea, right away, to proceed on a new entrepreneurship journey. But a bit different, not relying on people and several mission and consultancy staff, but more on developing an IP, a software solution to try to value more and to defend an IP and to win different journey. How did the colleagues and the partners react to my decision? They didn’t believe in that kind of journey because we proposed also to deliver this. So, we found an agreement to quit the journey we had at Insinovate.

[ 00:02:59 ] And we went out with one of our customers. We tried to start the development of the rail maintenance software. And we started the RAILwAI in October 2021. Were you scared? I was not scared at that time. I was a bit hoping there wouldn’t be too much show blockers. I know Jean-Michel for 10 years. We have a very strong relationship and a very complementary way of managing things. I’m an engineer in data analytics, etc. He’s more coming from telco and more being able to take vision on long processes and new industrial things. He convinced me because I was more leading him during our past journey with Insinovate. And on this RAILwAI journey, he’s more leading me. How did he convince you? He doesn’t like golf. He likes only sailing.

[ 00:03:56 ] No, he told me that I’m 48. I was 46 at this time. He told me that we now have all the strengths and all the capabilities to do a new journey. We have the idea. We know how to handle a company. Okay, it’s a new niche market that we want to address. And by discussing with the market, we found the third partner, the third co-founder with us. Who is coming? Jean-Michel and me from the rail industry, so it’s showing the unique DNA of our company. It’s Jean-Michel and me, already entrepreneurs from the past and experts in data analytics. And this new guy, Bruno, coming from the rail industry that combines the two expertise. So he convinced me. But then when you start a startup, you also need to convince some other people.

[ 00:04:46 ] You need employees. You need investors. How did that go? We had a chance with Jean-Michel to leave our previous company. We had a chance with Jean-Michel to leave our previous company. We had a chance with Jean-Michel to leave our previous company. Because we sold our shares. So, we invested a lot of money in this company. So, at the opposite of certain startups, we didn’t need any fundings initially. Of course, we needed to convince employees. So, by our network and our ability to convince, the first employees came. Our third founder came. And it’s always a problem of seduction and convincing. We hear a lot about AI in robotics, healthcare, etcetera. But you are here to disrupt even rail, a fairly traditional industry, inviting it to make use of its data with AI tools.

[ 00:05:36 ] So explain to me, what does it mean, actually, to use AI in order to make rail maintenance more efficient? Because in rail infrastructure today, we have a lot of amount of data, but 87% of this data available is not used. So our goal is to gather and to crunch. All this data information provides with AI models pertinent and predictive maintenance to operators. And to have a more efficient way of managing the infrastructure to make it more reliable for all trains. So let’s start the other way around. What’s the 13 that is being used now, the 13%? It’s used to retrieve some alerts from the infrastructure to see if the ballast, if the geometry of the rail, if the catenary is in good operation. But 87% is not used.

[ 00:06:24 ] So what’s the potential with the rest of the 87? The potential is to be able to crunch everything, to make a parallel with AI, with some information coming from the ballast, from the weather, and from other things, other sensors from the rail. And to be able to provide a predictive maintenance way of delivering the operations. So, in the long term, that would make rail, what, more cost-efficient? Maybe lower the ticketing prices, making it more attractive for people to use rail rather than other means of transport? Yeah. Today, 10% to 15% of trains are late. They’re canceled. Across Europe? Yeah, across Europe. And this is a huge cost of social information and budget information. It’s €6 billion euros at the European scale. So, our goal is to provide a way to optimize this from 20% to 30%.

[ 00:07:10 ] At which point did you realize that Jean-Michel was right all along and you were up to something big? That this was going to actually work? The big Eureka moment, it’s the first meetings we did with specific rail prospects. The feedbacks were very good. I would say four out of five prospects we met, even now, are interested. It’s not meaning that they will sign a contract in an hour. But they are very positive on it. Because maybe rail industry is something very old-fashioned. It’s not a critic, but it’s very old. It’s very heavy as an industry. And innovation and analytics and AI in that space is not so common. So they are pleased to understand what we are proposing. So that’s both an advantage and disadvantage.

[ 00:07:52 ] When you meet with rail companies, on the one hand, it might be the traditional ones. But at the same time, are they happy to be disrupted, to discover? You’re basically telling them that they’re sitting on a sack of gold. You’re telling them, ‘you know, you have all this data that you’re not using.’ I’m here to help you monetize it. It depends on how you present things and what is his behavior. If it’s someone with 50, 55 from the past, etc., it’s very long to convince. Because, of course, he will tell you, ‘I already say the same thing with Excel, with Access, with things.’ But if you see someone open. Open to innovation, open to new technology, etc. It’s more easier. I know the English language is very gendered, but we’ll try to use him or hers.

[ 00:08:29 ] Because one of the things we try to do at the Startupprize is to encourage more women. And that’s something that we try to include. I’m afraid, unfortunately, that in the RAILwAI industry, we don’t have a lot of women. You know, I learned something interesting in the last episode when I spoke with Lars from Wanda. And he said something very interesting. He said, having at least some level of diversity from the start makes it so much easier to expand on that. That came from a Norwegian with a Norwegian mindset. But you’re in south of France now. I mean, how do you feel about diversity? When you run a company, when you start a company, you have to rely on skill, already skilled and educated people with university, etc.

[ 00:09:09 ] So the work has to be done also by governments and things before us. I cannot invent things that are not existing. I mentioned in the offset that you were already successful. All the startups that are on this podcast are all those who won this year’s edition of the European Startup Prize for Mobility. So once everybody gets on stage, The Vice President. Alright, so as everybody’s making their way to the stage, thank you. Jury members evaluate. This is the fifth edition of Europe’s largest acceleration program for clean mobility startups. The Startup Prize is a private-public initiative which brings together all major EU institutions, together with national authorities, philanthropies and multinational companies who jointly scout, rank and boost Europe’s most promising clean mobility startups. This year, we received over 700 applications from mobility startups across all of Europe.

[ 00:09:57 ] They went through a very rigorous selection process, both written and in front of a professional jury. The prize then connects the winners with partners for investments and partnerships, presents them to VCs and CVCs, provides them with visibility all across Europe. We’re actually recording this episode in Helsinki as part of the winner’s tour, which brought us to Slush. If you’d like to learn more about this edition’s winning startups, you can visit startupprize.eu. Thus, we’ll now invite you for a cocktail upstairs if you’ve been watching us online, our broadcast. So, to go back to your journey, how did applying to the Startup Prize or winning it fit into your overall trajectory? With Jean-Michel, we didn’t plan anything in the past. You mean other competitions?

[ 00:10:43 ] No, in applying for that kind of prize, it’s when you build a company, it’s always taking opportunities. So, for the rail industry, the Festival de Cannes of Rail Industry is InnoTrans, which is an event, a big event in Berlin in September, every two years. So we went in 2022. We had a chance to have a small chat with the French Ministry of Transportation, Clément Bonne. So we saw him at the InnoTrans. He said to us, ‘Please apply to the Propulse program,’ which is something from the Agence de l’Innovation of French Transportation Minister that we won. Well, Clément Bonne is interesting. For the Startupprize as well, because he – I don’t know if you know – but he was the one who hosted the opening ceremony of this very edition in Paris, in the Ministry of Transport in April, when the prize announced that applications were open. And at the Royal Ceremony of the Propulse, it was in February this year, we met Karima Deli, and she told us about your European startup program for mobility. So to open the brackets, Karima Deli is indeed a member of European Parliament. She’s the chairwoman – I always call her – The Wonder Woman of the Transport Committee in the European Parliament.

[ 00:12:00 ] And she, indeed, in 2017, founded the European Startup Prize for Mobility, together with the French-based via ID, an accelerator, and the Boston Consulting Group. Since then, as I just mentioned, many other institutions, companies, philanthropies joined. Along with the events set to Jean-Michel, we applied to the EUSP. So, we did. And so, among 700 candidates, and finally, we received one special prize and big gold winner. So, it’s why we’re here. You know what’s unfair? Some startups apply year after year, and you just went there for the first time, nonchalantly, and won. Yeah. And notice that Jean-Michel uses, in his pitch deck, the fact that you won. So that’s always a pleasure for the prize to hear. But how does it serve you now for the next steps? We need acceleration.

[ 00:12:43 ] So I know that Jean-Michel knows better than me, but I know that we had won. We had a lot of sorts of days of consultancy with, for example, Roland Berger – exactly so. That’s something that is meaningful and useful for you. So, you will go through a dedicated acceleration with our experts. I should tell the listeners that we actually had the closing ceremony that we had in October at the European Parliament. There was a competition among the viewers to choose the top four among the top ten. And you were among the top four. The second. The second gold winner award. The second gold winner is RAILwAI. RAILwAI. And the top four received an extra cherry on the cake, which was consultancy with Roland Berger, the business consultancy company.

[ 00:13:28 ] Something is very interesting because in the size of a startup, being able to work with that kind of company, Roland Berger or Boston Consulting Group is very expensive. So it’s very unusual for a startup to have the opportunity to discuss with that kind of expertise. Do you want to share what you will define with them as your objective? If they bring us very interesting ideas, we want to have a shift in our model or in things. So you want to basically be challenged to show them what you’re doing and ask them, ‘Am I doing the right thing?’ We want to understand with experts if we are right in the way we go on the market and maybe the pricing model, but also in what we have in the coming months, which is fundraising.

[ 00:14:08 ] So, which round are you doing now for fundraising? To date, we just invested our own money. We had a lot of it. We had some help and loans from the French public bank, some also regional things, et cetera, et cetera. But now, we will open for the first time to equity. So roughly, we’re looking for between three and four million euros that can be a mix between equity and public loans, etcetera. The investors who are listening to this podcast should contact the Startupprize and ask to be put in touch with you, Thomas. I hope so. That is not very good at organizing my Slush venue, my Slush visit. With taking appointments with VCs, but I will be available during those days at Slush on the booth with you to visit VC.

[ 00:14:57 ] And I hope tonight also we have a side event that we should have some VCs in the room. But that should happen as we are recording it. That should happen tonight. Hello, everyone. I’m Thomas. Everything is in the name. It’s RAILwAI. So I spend all my life in giving my expertise to data and analytics. But as part of the Startupprize, the top 50 will actually get to pitch in front of a major group. A group of VCs and CVCs. We’re talking about 100 of them. So there’s still a bunch of opportunities along the way. Also with EIT Urban Mobility, which is one of the prize partners. Also with the European Investment Bank. What we’re doing now is giving the startups more visibility. But investment is definitely also a major part of it.

[ 00:15:37 ] And as you said, the consultancy by Orlin Berger. Yeah. And we hope, even if we don’t see any VC or interested investors in Slush, there also may be some discussions with Giorgio or maybe also with via ID. Giorgio is the managing director of Europe’s Rail. Europe’s Rail is the main and unique research and innovation platform in Europe. We have a 1.2 billion euro program. And the winner is? The winner is Rail with AI. What should I wish you for the next 12 months? It could be maybe my conclusion, but in a startup, by definition and by design. And especially in the future. Especially in a niche market, in a heavy industry like Rail, we need time and to have time; we have to buy time. So we need money.

[ 00:16:29 ] This was What Were They Thinking? The stories behind Europe’s most promising clean mobility startups. You can find all episodes on your favorite podcast platform. I’m Dan Sobovitz, here with Thomas, making sure your data is on the fast track. See you next time.