Start-ups: fundraising momentum continues

In a start-up market where funding rounds are multiplying, the Luxembourg Business Angel Network invested as much in 2020 as in 2019.

Luxembourg start-ups are on a roll at the beginning of 2021. Several major fundraisings or equity investments have been announced in recent weeks:

• The fintech PPro, which specialises in electronic payments for professionals, has raised €180 million;
• The start-up Tetrao, which uses artificial intelligence to analyse financial documents, now counts the Luxembourg Stock Exchange as a shareholder;
• EmailTree, which specialises in the automation of e-mail management, has just completed a €1.4 million financing round with its historical investors, Xavier Buck and Christophe Bianco, and also two new business angels;
• The financial platform HQLAx, which facilitates the transfer of ownership of financial assets by improving the mobility of collateral between tri-party agents and custodian agents, has raised €14.4 million from major financial sector players;
• DataThings, the University of Luxembourg's SnT spin-off specialising in the development of intelligent software systems for data management and analysis, has seen industrial engineering group Paul Wurth and energy provider Encevo each take a 10.3% stake in its capital.
• The fintech Investify, which offers a fully digitalised wealth management solution (on-boarding, robo-advisor, regulatory processes, etc.), announced that it had raised €4 million in funding.

This succession of good news is reassuring, especially in the current health and economic context. When looking at the figures, the COVID crisis does not seem to have impacted the market too much. "If we compare the statistics between 2019 and 2020, we have not noticed any big differences in terms of investments," notes Teona Khubutia, the manager of LBAN – Luxembourg Business Angel Network.
"We invested €6.9 million in 2019 and another €6.5 million in 2020."

While activity was virtually halted in the spring of 2020 when the first restriction and confinement measures were put in place, it took up again during the second half of the year, when almost all investments were concentrated.

"We worked hard on our exposure throughout 2020, which also resulted in an increased number of members as well as growing interest from start-ups. The number of evaluated start-ups has increased. The market remains very active.”

5% of lucky ones

Hundreds of start-up applications have been received and studied closely by LBAN's investment committee. This is a necessary step before start-ups can hope to pitch in front of a jury of potential investors. "Each month, on average 5 to 7 start-ups were invited to pitch. But not all of them received funding. It's the law of the market: of all the applications received, only 5% receive funding," explains Ms Khubutia.

Companies active in niche areas related to digital solutions were most in demand. They were also the fastest ones to develop new solutions to current problems.

The year 2021 has started in the same way as the end of 2020 and LBAN is organising multiple events with its different institutional partners. Thus, a "Lunch & Learn" presentation webinar will take place on 23 March in collaboration with Luxinnovation. This will be an opportunity to present the existing aid schemes for young innovative companies.