1Mby1M Virtual Accelerator Investor Forum: With Alain le Loux of Cottonwood Technology Fund (Part 4)

Sramana Mitra: Give me some examples of the kind of medical companies that you have invested in.

Alain le Loux: I’ve invested in two companies. They are doing great, but it takes a lot of time. For one of them, we are already eight years in.

Sramana Mitra: What do they do?

Alain le Loux: Respiratory protection. It’s a long story to get them into the market.

Sramana Mitra: What is the local trend in the Netherlands or Northern Europe? What kinds of companies do you see more of? You said you only saw 20 robotics companies a year. What about other types of companies? Where is the sweet spot of Northern Europe right now?

Alain le Loux: Nanotechnology. Also photonics. We see a huge photonics industry in the Netherlands and Germany as well. Photonics doesn’t exist in other parts of the world, so it’s really interesting. It’s mostly breakthrough technology.

Sramana Mitra: Can you talk about some applications?

Alain le Loux: Mostly they’re a replacement for semiconductor chips but much faster, smaller, and with less battery consumption. We are invested in a photonics company in the US called Skorpios.

We predict them to be the new Intel. It’s a really interesting company. They already have a valuation of a billion-plus. We started nine years ago. It’s a silicon photonics company with very unique materials and composition. Those chips are really fast. It’s incredible.

Sramana Mitra: Which devices have they gone into so far?

Alain le Loux: They are ramping up production. There’s a small demand currently because all the corporates first want to test. 

Sramana Mitra: That’s really cutting-edge stuff. It’s interesting what you’re doing. I don’t know that many European funds that do this kind of work. Are there other funds that you work with that have this specialization?

Alain le Loux: Just small ones. We are really unique in the hard science focus. Most funds in Europe focus on the software industry or life sciences. In hard science, it’s really hard to find funds.

Sramana Mitra: I can imagine why the Series B is so difficult. For these kinds of businesses, Series B is not a revenue-generating round.

Alain le Loux: Yes. Sometimes, there is a market validation, but it’s more of references and corporates who are willing to buy. Real market validation is difficult. If you break through, the market is huge.

We are one of the best-performing funds in the US. We have IRR of 46% per annum. That’s also possible because we are early stage. You can really make a lot of money if you find the right deals.

Sramana Mitra: Thank you for sharing what you’re doing. We are happy to learn about your activities. Thank you for your time.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Alain le Loux of Cottonwood Technology Fund
1 2 3 4