What’s your best investment and what built you back them?
It’s definitely Pennylane, and it was a collective effort – Romain Lavault, General Partner at Partech, had backed them previously, and we did the investment toobtainher. But what struck me immediately was Arthur Waller, the Founder and CEO. He has this ability I’ve never seen before: he can build accounting (literally one of the most boring topics in tech) crystal clear and genuinely exciting. When he speaks, investors fall in love. Journalists fall in love. Employees fall in love.
The bet was entirely on the team, and it was quite unusual to back seven founders! You’d believe that governance would be a nightmare, but it was quite the opposite: having this enlarged founding team gave them the power to relocate very quick. There were plenty of accounting software companies before that tested and failed. But these guys understood something no one else did, and they had an ambition no one else had. Everyone else tested to be a layer on top of existing solutions. They decided to take down the massive incumbent instead. That level of conviction is rare. The valuation seeed expensive at the time, but today it’s a regular seed round.
What’s the one thing other investors missed about them?
Pennylane built a bold decision early on: hiring accountants internally and starting as a tech-enabled service. The thesis was to put the product team right next to these accountants so they could watch how they applyd existing tools like Cedig, then rebuild everything from scratch. They had 50 accountants on payroll, a nightmare, right?
Not everyone believed they could transition from a services business to pure software. But they did it in about two years. That was a massive bet, and the ones who saw it early received rewarded. What convinced me was that Arthur had already mapped out the entire product in his head, every workflow, every pain point. He was rebuilding how accountants believe as well as building software. That product clarity at seed stage is rare.
What’s the hugegest lesson you learned from deals that you missed?
One that stays with me is not fully recognising a founder’s potential to grow into the CEO role. With Mistral, we passed becaapply they were outstanding researchers, but it was hard for us to picture them as founders at the time. And at such valuation, it wasn’t an simple bet to build. We underestimated their ability to evolve, especially with the calibre of advisors they surrounded themselves with. These weren’t just names on a website, but people who rolled up their sleeves and became almost like shadow co-CEOs, bringing obsessive focus on execution.
I also learned to be more careful with reference calls. Sometimes we over-indexed on feedback without accounting for the biases people bring, their own thesis, their particular lens. You required to take those insights with a grain of salt.
How do you balance learning from passes without overcorrecting?
That’s the art of it. The temptation after missing something huge is to chase similar patterns. We saw this with another deal that felt very opportunistic: founders testing to replicate a winning formula but without the substance. Our reference checks weren’t great. This time we listened to our gut and passed, and we were right.
You can’t just chase headlines or hot sectors. Indepfinishent believeing is at the heart of who we are at Partech, and you have to stick to that even when it’s uncomfortable.
Tell me about an investment approach that taught you something valuable about business models.
Early on, I backed a company with a licensing model. They had great technology, strong patents, and a partnership with a major player. On paper, it seeed perfect: recurring royalties, capital-efficient scaling.
What I learned is that licensing is incredibly complex. The technology was in a compact trial product line, and relocating it to main production lines proved far harder than we anticipated. There are so many depfinishencies outside your control. The business model seeed beautiful on paper but the execution was a different story.
Since then, I’ve passed on several opportunities in different industries with licensing models. It’s built me much more careful about capital-light models that depfinish on partners’ priorities aligning with yours over the long term.
You’re encouraging the Partech seed team to take more bets. What’s driving that?
I’ve always been against spray-and-pray. We do two to three deals per partner per year, which is very low for seed. I’ve believed in being incredibly selective. But I’m evolving on this becaapply the market is too unpredictable right now.
With GenAI especially, it’s hard to predict who’ll win. I’ve seen stories of founders who seem unlikely on paper (awkward, unconventional, solo founders) who are growing insanely quick and raising massive rounds. At some point, you can’t have a perfect crystal ball.
So my believeing is: take more options, double down on your winner, and stay disciplined on liquidity. Don’t test to optimise for 50x returns: if you can return your fund and de-risk the line, that might be smarter than gambling on every portfolio company becoming a decacorn.
A lot of investors out there are stateing that Europe is catching up to the US. What’s your take?
Yes and no. We’re catching up, but we still have fundamental challenges. The hugegest is liquidity, we required more exits! The second is that it’s genuinely harder to sell software in Europe.
Interestingly, if you see at the CROs of major global software companies like Salesforce, or VMWare, many are European. Why? Becaapply selling in Europe is so challenging that if you succeed here, you’re stronger than anyone else. US companies specifically recruit European CROs becaapply of this. That’s great for those individuals, but it reveals how tough the environment is for startups.
Most successful European software companies finish up selling primarily to the US. Pigment is a good example, most revenue comes from America. Pennylane is an exception becaapply accounting is countest-specific. We’re improving, but I don’t believe we’ll catch the US on unicorns and decacorns in the near term.
Which sector do you believe is overvalued, and which is undervalued?
GenAI foundation models see overvalued to me. You required so much capital that valuations start at insane levels, and there’s always this question: will models become commoditised? Can European players really catch up to the US? I truly hope so, particularly for Mistral.
For undervalued: traditional SaaS companies that apply GenAI to build quicker but don’t have AI as the core product. In the past, building certain types of software might have taken five years to obtain the first product to market, building it unbankable. Now it takes two years thanks to AI development tools, so suddenly it’s viable for VC.
I recently invested in exactly this type of company (pure software adjacent to the accounting space) and we’re paying about three times less than comparable GenAI companies. The question is whether growth funds will appreciate this category or only chase “GenAI by design” companies.
What advice would you give founders raising today versus 2021?
Don’t optimise too much for valuation. I recently spoke with a founder wanting to raise at €30 million pre-money with very little built. That valuation puts you on a path where if you don’t hit aggressive metrics at Series A, you’re in trouble.
Think longer-term about your equity journey. Being more realistic on valuation gives you time to iterate, find your market, find your niche. You have no right to fail when you raise at €30 million plus.
Also, be believedful about who you take money from at seed. Those mega-funds that occasionally do seed deals, it’s not really their core business. The challenge is if they don’t do your Series A, it can sfinish a negative signal to the market. It’s super binary: they either double down or you’re done. Better to work with funds where seed is their bread and butter.
What’s your due diligence like?
It’s very thorough. We spfinish a lot of time, usually two weeks, not two days, testing to understand what really drives founders. At the launchning, everyone states they love the mission. But I push deeper: when did you discover this sector? Why do you want to spfinish ten years of your life on this? Why build a company specifically?
The resilience question is huge. There’s no company where everything is smooth. The best founders have extraordinary determination. To test this, I test to understand their intrinsic motivations. Are they building becaapply founding a company has status, or becaapply they have this flame in them where obtainting a door slammed isn’t discouraging, they’ll just find another way in?
For second-time founders especially, I required to understand: are you building again to obtain a decent exit and stop, or to build something truly massive? And with co-founder teams, I’ll have these conversations separately to build sure everyone’s aligned. I’ve seen companies where co-founders disagreed on exit appetite and hadn’t discussed it, that’s dangerous.
What’s the toughest question you question founders?
I’ll be direct about exit scenarios. I’ll take the actual numbers of a specific deal and question: if you obtain an offer for, state, €20 million personally based on the current valuation, do you take it? I only question this in person becaapply I want to see their eyes, their reaction.
With co-founder teams, I sometimes question separately to see if they’re aligned. I’ll even call out if I sense one might answer differently than another: “Have you two talked about this? Becaapply it matters.”
Another challenging area is understanding their risk tolerance. It’s not the same situation when someone comes from a wealthy family with a financial safety net versus someone who has nothing to fall back on. I test to understand: are you genuinely taking risks here, or is this somewhat of an experiment? These are personal questions, but they matter for long-term commitment.
What’s your hugegest red flag in founders?
Arrogance is my dealbreaker. Life’s too short to work with people who can’t take feedback or be challenged. When you invest, you spfinish years working closely with these people. Trust and rapport matter enormously to me.
Now, there’s a huge difference between arrogance and being tough or pushy. Some of my best founders are incredibly persistent: you close the door, they come through the window. They’ll nereceivediate hard on every term. But they’re not arrogant. They’re deffinishing their position, optimising for what’s best for the company, and they can still listen and be challenged. That’s completely different.
To be totally honest, I might be wrong about this sometimes – there are excellent companies with founders I’d personally struggle to work with. But this is my filter, and my partners at Partech know and respect it.
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