“Young Graduates Who Fuel Innovation Are Still Missing”
Alain Rodermann is a co-founder and managing partner of Expon Capital and a frequent jury member of Fit 4 Start. We caught up with the longtime investor and healthtech enthusiast to learn more about the growing ecosystem and the challenges ahead.
What are your views on the recent development of the healthtech ecosystem in Luxembourg?
Luxembourg’s startup ecosystem has been growing steadily over the past years as more and more initiatives have been put in place to push entrepreneurship. From Fit 4 Start to public incubators, public and private initiatives alike. As I understand it, a couple of clusters have been prioritised by the government, among them spacetech and healthtech.
It helps that healthtech is very close to the university because it allows for a transfer of technology to the startup ecosystem. As we have seen with the first spin-offs this is a very good beginning and I am sure that there will be more to come in the near future.
I think it’s great that Luxembourg has decided to concentrate its efforts on healthtech because we have a very efficient healthcare system in Luxembourg and a lot of interaction among the key players.
How would you describe the state of healthtech in Luxembourg? Is Luxembourg lagging behind or getting started just in time?
There is no doubt that this ecosystem is behind some of those in other European countries. What is missing is a large number of university-educated students in the field of healthcare. But the Luxembourgish university is quite small, so young graduates who fuel innovation are still missing. Furthermore, healthtech is tricky because most of the people working in the sector have PhDs and not MBAs which does not make them the best people to start a company.
We are lagging behind in terms of maturity, but we are catching up very fast. I think there are a number of things that were put in place that make Luxembourg an attractive place for entrepreneurship. However, currently, we are not seeing enough entrepreneurs who actually come from Luxembourg.
Furthermore, our funding is not yet at the same level as that of other countries. But we are building this ecosystem step by step so it will take some time until we get there. But I strongly believe that at some time in the future we will have 1,000 startups in Luxembourg.
“What is missing is a large number of university-educated students in the field of healthcare.”
Alain Rodermann, Co-founder & Managing Partner at Expon Capital
You mention Digital Health as one of Expon Seed’s investment targets. What kind of companies and digital solutions fit under that umbrella term?
What we don’t do at Expon is invest in developing new drugs because for that you need huge amounts of money and funds that are 5-10x bigger than ours. That’s why we decided to focus on anything that is digital because digital is cheap, flexible and allows you to pivot when necessary.
There are also more opportunities in that space. One of the companies we have invested in is HelloBetter, a company that develops digital treatments for mental health problems. What’s important to realise is that their phone application is not a game but has gone through clinical trials and is even reimbursed by healthcare. This shows how digital solutions are becoming an important part of healthcare.
Other solutions which fit under this umbrella are applications, software used by hospitals, machinery for diagnostics and anything IoT such as smart watches. The smart watches extract so much data that, if mixed with insights from your DNA, will have a very bright future.
For the first time in the history of Fit 4 Start, a dedicated track for healthtech has been opened. How big an impact will this have on the healthtech ecosystem?
I think it will have a huge impact. First, it puts Luxembourg on the map as companies from all over the world are applying and seeing that Luxembourg is active in this sector. Many countries don’t know a lot about our ecosystem, so such initiatives give us much needed exposure.
Second, the pitching events bring a lot of international entrepreneurs to Luxembourg. While not all of them will be selected, it allows them to learn more about our ecosystem and helps establish links between different networks.
What I’m also noticing is that companies coming out of Fit 4 Start have a higher maturity level than in the past. A lot of them completely change their approach and professionality and are thus more likely to attract funding.
You’ve mentioned education and funding as two pillars which can still be improved. What other measures are still necessary to expand the healthtech ecosystem?
I strongly believe in the potential of beehive incubators. If you put a lot of young companies that are working in related fields in the same place, you suddenly start attracting more and more of them. This is critical to growing an ecosystem which is why it’s great that a Health
And Life science Innovation (HE:AL) Campus is being opened in the future.
To keep growing the ecosystem and attract more healthtech companies I think we need to improve the level of maturity of employee stock options. I think if we could make some small adjustments to these, Luxembourg could become a lot more attractive to some companies and employees. I think it’s a system that should not be very difficult to put in place and France could be taken as an example where this was very well executed.
This article was first published in the Silicon Luxembourg magazine. Get your copy.
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