Celebrating a Win-Win for Innovation and the FDJ Group

The FDJ Group has exclusive rights to operate offline and online lottery games, and point-of-sale sports betting in France. In recent years, the Group has capitalized on its expertise to create new revenue sources, extending its offering internationally, locally (through cash collection and payment services), and into related entertainment sectors. Our Innovation team spoke to Pierre Tramon, Senior Analyst, about the FDJ Group’s approach to open innovation and how Startup helps the Group engage its internal community effectively. 

• What Led You to Implement an Open Innovation Strategy? 

Large groups generally look at the changes they need to make 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 startups. And then, ultimately, to be able to integrate their solutions into our offerings, pathways, and services. To do this, we rely on our ecosystem. We have forged numerous partnerships with capital sales funds, i.e. investment funds, startup accelerators, associations, think tanks and academic partners. Thanks to them, every year we identify around 1,000 new startups, 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 startups on business issues. With FDJ Ventures, we invest more than €100 million in CVC funds and startups. 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 Questel 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 startup. Not just about the startup, 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 startup. Typically, we have nurturing, study, and hot deal, and we have lots of categories. Having these helps us to categorize startups and to have a clear funnel. We also add the actions we need to take on these files, so we can find our way around more easily, organize things more efficiently, and have a centralized point of information.   

A second point is that it allows us to monitor all the data in real-time. Whether it’s where the startups 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. Questel can provide us with this data in real-time very quickly, both in Excel format and in a Power BI [business intelligence] 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, of which there are roughly more than 50 people. If they have questions about startups or need some information, this allows them to go and look it up on our platform. That way, they can talk directly to these businesses. It’s a very collaborative approach.  

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 startups to contact us. We’ve set up a form with Questel called the Startup Link, which we communicate both externally in our [email] 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 do not have time to meet. This way, we can add their profile to 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 prioritization strategy with the strategy team. 

Currently, our focus is on six major verticals:  

• 1/ Future of gambling: How do we design the next generation of gambling?
• 2/ Future of player experience: Simplifying and personalizing the player experience and strengthening responsible gambling systems through better knowledge of players.
• 3/ Future of omnichannel distribution: Modernizing 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/ Web3: Understanding and anticipating trends linked to the new decentralized 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 society as a whole. How to use technology to reduce our environmental impact? 
• 6/ Artificial Intelligence: Finding solutions to improve our productivity, to make it easier to find information both internally and externally, notably with the use of 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 such as Level-Up, which specializes in the mobile games studio sector, and Trust ESport, which specializes in e-sports, or Sparkle Venture, which specializes 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 program, with the Innovation Lab, to encourage in-house staff to create innovative projects linked to the Group’s challenges. And, more recently, FDJ Ventures 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 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 startups and major groups benefit an entire ecosystem. For us, it’s fundamental, and because major groups are the natural customers for startups, they contribute to their growth. Through our Ventures approach, we directly or indirectly support over 500 French and European startups, including 23 startups 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. 

Contact us to find out more about open innovation management or explore our full range of innovation management software and innovation services.