Promus Ventures, an early stage venture capital firm, raised €120m for the Orbital Ventures Fund, which closed last year. The fund is not exclusively focussed on space startups in the grand duchy, although Luxembourg-linked companies will receive a certain portion of its investments. The fund’s limited partners (its external investors) are all European, predominately public, and active in the grand duchy.
The lead investors in the Orbital Ventures Fund are the European Investment Fund, which reportedly committed €40m, and Luxembourg’s economy ministry and National Credit and Investment Institution (SNCI). Banque Internationale à Luxembourg (BIL), BGL BNP Paribas, OHB, Post Luxembourg, SES and Spuerkeess similarly took stakes.
So far, there are 10 startups in the fund’s portfolio, according to Pierre Festal, Promus Ventures’s Luxembourg-based partner.
Altogether, Promus Ventures has five funds. The firm’s portfolio companies include Iceye, Rocket Lab, Spire and Swift Navigation. Previous exits included Enview, Figure Eight, Gauss Surgical and Kensho.
The VC firm has three offices, with five of its eight global employees based in the grand duchy.
Delano spoke with Festal about the fund, its investors and portfolio companies, and his take on Luxembourg’s space startup scene.
Aaron Grunwald: In just a few words, tell us about Promus Ventures.
Pierre Festal: Founded in 2012, Promus Ventures invests in early-stage deep-tech startups solving complex problems to advance everyday lives across the world. From offices in Chicago, San Francisco and Luxembourg, Promus Ventures has invested in 95 early-stage startups in the US, EU, UK and New Zealand.
How was the Orbital Ventures Fund created and what are its main objectives?
The Orbital Ventures fund closed at €120m in July 2021. Limited partners (LPs) include the European Investment Fund as well as other corporate, institutional and private and public investors. Among them are the ministry of economy of Luxembourg and the National Credit and Investment Institution (SNCI). Anchored in Luxembourg, the fund is focusing on early-stage, space-related companies.
“Space” is a big segment. What exactly are you looking for in a portfolio company?
The Orbital Ventures Fund targets early-stage investment opportunities across a broad spectrum of areas, such as: space-based telecommunications networks and services; geospatial location-based services and applications; space-related technologies and innovation, [for example] robotics, sensors, data; Earth observation and environmental monitoring; transportation and logistics efficiency and safety; and space resource utilisation and exploration.
When assessing a potential investment we focus first and foremost on the quality of the founding team, its vision and ability to execute on that vision. We also look at the technology, product, business model, market and competitive dynamics.
What kind of link does a startup need with Luxembourg? Do they need to have an office here? Do they need to invest in technology that has been--partially or fully--developed in Luxembourg?
A portion of the fund is required to be deployed in companies that have a link to Luxembourg--either headquartered in Luxembourg or with plans to build a presence in Luxembourg.
Let’s talk about your investors. What does having a significant portion of your limited partners from the public sector change about the fund, compared to a fund that has a majority of private sector LPs? Does it change your strategy, your outlook, your operations?
It does not change anything. We operate like any other fund. We are a financial investor whose objective is to maximise returns for LPs.
What is your outlook for space startups in Luxembourg and in Europe? Is the sector competitive with North American and Asian rivals?
Luxembourg has been at the forefront of the push to democratise and develop the space sector over the last few decades. The country continues to provide significant local support to space startups and is a popular place for international space companies to expand to. We can say the country has consistently been punching above its weight in the sector.
Europe has come a long way in building and supporting a thriving space tech ecosystem, with initiatives such as the European Commission’s Cassini programme and European Space Agency’s incubation programmes, as well as increasing support from large corporates that have woken up to the threats and opportunities offered by startups in the sector.
The private financing market remains relatively limited and does not have enough dry powder to back emerging companies throughout their lifecycle--this issue is not specific to the space sector. As a result, European space startups tend to look to the US or international investment community when it comes to raising large rounds of expansion financing to support their growth. While Europe has made good progress, it is still behind the US in terms of the number of emerging space companies and financing available.
Asia is relatively fragmented, with China having its own largely state-backed set of initiatives in the space sector. India, Japan and Australia have been relatively active with a number of startups raising large rounds of financing over the last few quarters.
Are you looking to fundraise further soon, either for the Orbital Ventures Fund or another fund focused on the space sector?
We are currently deploying the Orbital Ventures fund and hope to continue to invest in EU-related space businesses well into the future.
Space Resources Week, a conference held at Luxexpo, 3-5 May, features a “Make resources and the moon bankable” panel on Wednesday afternoon.