1Mby1M Virtual Accelerator Investor Forum: With Alain le Loux of Cottonwood Technology Fund (Part 3)

Sramana Mitra: What differences are you seeing in the trends in Europe versus America?

Alain le Loux: For follow-on rounds in the US, the money is easier than in Europe. In Europe, only less than 10% of Series A investments raise a B round. That’s a pity.

It looks like there is more money available in the US for follow-on rounds. You see a lot of unicorns in the US as well because there is a lot of money available.

Sramana Mitra: I am in Silicon Valley. Even Silicon Valley VCs are willing to invest in companies in other parts of the world in late-stage companies.

Alain le Loux: That’s correct. If we invest $2 million, it’s still an early-stage deal after 24 months. Mostly we attract money from corporates, because they have a real interest in technology. It’s really late stage when other VCs come in.

Sramana Mitra: The B round is the problem.

Alain le Loux: The B round is always the biggest challenge.

Sramana Mitra: What are the places, in terms of institutions or companies, where there is a lot of robotics work going on in Europe?

Alain le Loux: You have Netherlands and Germany. They have a lot of technical universities that focus on robotics. In the Netherlands for example, we have the University of Delft and the University of Twente. They are robotics-focused.

You also now see a trend of medical robots which can help medical doctors. Most of the robotics are spin-offs from universities. 

Sramana Mitra: Elsewhere in Europe?

Alain le Loux: Germany as well. They’re a world champion in manufacturing and they also focus on robotics.

Sramana Mitra: The applications are more manufacturing-oriented applications?

Alain le Loux: Yes, that’s right. They like to automate manufacturing.

Sramana Mitra: What about Italy? Italy also had a long tradition of manufacturing, but it has lost its way. What’s happening in Italy?

Alain le Loux: Probably yes, but we don’t scout actively in Italy.

Sramana Mitra: Very interesting. What else would you like to discuss from your work? You mentioned that you do a lot of energy work. Are you doing the IoT stuff?

Alain le Loux: It depends. I see a lot of IoT pitch decks. The challenge is there is so much competition in that space. We like to invest in companies without direct competition. You can solve problems in a different way or an indirect way.

We like to invest in breakthrough technologies where there is almost no competition. In IoT space, it’s crazy how much competition there is. It’s fairly difficult to figure out the real winner.

I see a lot of interesting things. It will be fairly difficult to figure out upfront what could make a difference.

Sramana Mitra: What about in medical? What are the trends that you are aligned within medical?

Alain le Loux: In the medical scene, mostly you try to solve a single problem with a single solution. There is a long trail before you get to the market. It has some extra risks.

On the other side, the markets are mostly huge. If you try to solve one problem and a medical doctor doesn’t like your technology, you have a real problem. You have technology in the market which will not be picked up by the market.

My advice always is to attract some medical doctors and professionals before anything else.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Alain le Loux of Cottonwood Technology Fund
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