Promus Ventures, a venture capital startup, has raised €120 million for the Orbital Ventures Fund, a fund that closed last year. This fund does not focus exclusively on aerospace start-ups in the Grand Duchy, although Luxembourg-affiliated companies receive a certain share of its investments. The fund’s “limited partners” (its external investors) are all European, mostly public, and active in the Grand Duchy.
The main investors in the Orbital Ventures Fund are the European Investment Fund (EIF), which has reportedly pledged 40 million euros, as well as the Ministry of Economy and the National Credit and Investment Company (SNCI) of Luxembourg. Banque Internationale à Luxembourg (BIL), BGL BNP Paribas, OHB, Post Luxembourg, SES and Spuerkeess also took shares.
According to Pierre Festal, partner of Promus Ventures in Luxembourg, the fund’s portfolio currently includes 10 start-ups.
In total, Promus Ventures has five funds. The company’s portfolio companies include Iceeye, Rocket Lab, Spire and Swift Navigation. Some of his previous releases include Enview, Figure Eight, Gauss Surgical, and Kensho.
The venture capital firm has three offices and five of its eight employees are based in the Grand Duchy.
Delano spoke with Pierre Festal about the fund, its investors and its portfolio companies, as well as his take on the Luxembourg aerospace start-up scene.
Tell us in a few words about Promus Ventures.
Pierre Festival. † Founded in 2012, Promus Ventures invests in early-stage deep-tech start-ups that solve complex problems to improve everyday life around the world. From its offices in Chicago, San Francisco and Luxembourg, Promus Ventures has invested in 95 early-stage startups in the United States, the European Union, the United Kingdom and New Zealand.
How was the Orbital Ventures fund established and what are its main objectives?
“The Orbital Ventures fund closed at €120 million in July 2021. Limited Partners (LPs) include the European Investment Fund, as well as other companies, institutions and private and public investors. These include the Luxembourg Ministry of Economic Affairs and the National Credit and Investment Company (SNCI). The fund, which is anchored in Luxembourg, focuses on aerospace companies in the start-up phase.
Space is an important segment. What exactly are you looking for in a company for your portfolio?
“The Orbital Ventures Fund focuses on early stage investment opportunities in a wide range of areas, such as: space telecommunications networks and services; location-based geospatial services and applications; space-related technologies and innovations, such as robotics, sensors, data; earth observation and environmental monitoring; the efficiency and safety of transport and logistics; and the use and exploration of space resources.
When we evaluate a potential investment, our primary focus is on the quality of the founding team, their vision and their ability to deliver on that vision. We also look at technology, product, business model, market and competitive dynamics.
What kind of connection does a start-up need with Luxembourg? Should she have an office here? Should it invest in a technology developed – partially or completely – in Luxembourg?
“Part of the fund will be invested in companies with a connection to Luxembourg – headquartered in Luxembourg or with plans to locate in Luxembourg.
Let’s talk about your investors. How does having a large proportion of your public sector sponsors change for the fund, compared to a fund with a majority of private sector sponsors? Does it change your strategy, outlook, operations?
“It doesn’t change anything. We operate like any other fund. We are a financial investor whose goal is to maximize returns for our employees.
What are your prospects for aerospace start-ups in Luxembourg and in Europe? Is the industry competitive with its North American and Asian competitors?
“Luxembourg has played a pioneering role in the democratization and development of the space sector in recent decades. The country continues to provide important local support to start-ups in the space sector and is a privileged location for international space companies. We can say that the country has always been very successful in this sector.
Europe has come a long way in building and supporting a thriving space technology ecosystem, with initiatives such as the European Commission’s Cassini program and the European Space Agency’s incubation programs, as well as increasing support from major companies that have become aware of the threats and opportunities presented by industry start-ups.
The private finance market remains relatively limited and does not have enough ‘dry powder’ (understanding uninvested capital) to support emerging companies throughout their lifecycle – this problem is not specific to the space sector. Consequently, young European space companies tend to look to the United States or the international investment community when it comes to raising significant funds to support their growth. While Europe has made good progress, it is lagging behind the United States in the number of emerging space companies and available funding.
Asia is relatively fragmented and China has its own set of largely state-backed initiatives in the space sector. India, Japan and Australia have been relatively active with a number of startups raising large sums of money in recent quarters.
Do you plan on raising other funds soon, either for the Orbital Ventures Fund or for another fund focused on the aerospace sector?
“We are in the process of rolling out the Orbital Ventures fund and hope to continue investing in EU-related space ventures in the future.
Space Resources Week
a conference taking place at Luxexpo from May 3-5 will include a panel titled “Make resources and the moon bankable” on Wednesday afternoon.
This article was written for Delano, translated and edited for Paperjam.