How Partao raised €3 million with a prototype

Raising your first fundraising round as a startup can feel overwhelming, but it doesn't have to be. Alex Ootes, CEO and co-founder of Partao, shares how he and his team raised close to €3 million in pre-seed funding with no revenue, just a working prototype and a clear strategy.

Partao, now the largest heavy machinery parts marketplace in Europe, grew out of a personal frustration. Mr Ootes owns an excavator and a tractor for private use and struggled to find the right parts for his machines. Drawing on his long experience in automotive and e-commerce, he created the first version of what would become Partao’s marketplace website, using early AI tools to build it quickly. When he shared the idea with Virginia Strong, the two decided to turn it into a business. With no revenue and only this initial website in place, they set out to raise their first significant funding round in Luxembourg.

We started fundraising with no revenue, just two experienced professionals and a working prototype, and we aimed high.” 
Alex Ootes, Partao 

How to find the right lead investor for your startup

From the outset, they decided to pursue a larger pre-seed round. The aim was to secure a long enough runway to build a strong team and avoid returning to investors after a year. Early traction came quickly. When Mr Ootes updated his LinkedIn profile to signal that he had started working on a new venture, dozens of investors reached out to him directly. The team then built a focused list of European venture capital investors and activated their network for introductions.

A lead investor sets the terms of a funding round, brings credibility and often attracts additional investors. Fundraising quickly proved to be a structured and intensive process. Mr Ootes describes it as working through a pipeline with many steps. "At the end of the day, it is a sales funnel," he explains. While many investors were willing to have conversations, only a small share were able to lead a round of their size. This distinction became essential. "My biggest advice is to focus on the lead investors."

When it came to negotiating the term sheet, having several interested parties mattered just as much. "It is most important to have multiple options. That is your biggest negotiation lever." 

Treat fundraising like a full-time job, focus on a lead investor and ask the hard questions right up front.” 
Alex Ootes, Partao

Closing an oversubscribed funding round and spending wisely

The round became nearly three times oversubscribed and closed at close to €3 million. Once they secured the lead investor, another complementary investor came on board quickly. Their spending strategy remained disciplined. “We hired a team of around 30 people to build the foundations of the company, with a measured investment in marketing, and kept the rest very focused,” Mr Ootes explains.

AI now plays a central role across the company. It supports product data quality, helps manage operational processes, strengthens the sales funnel and even helps to find the right parts for customers. “There is so much AI integrated into our processes that it genuinely feels like an exciting moment to build a company.”

Using Fit 4 Scale and Luxembourg's startup ecosystem

Partao’s journey has been shaped by Luxembourg’s programmes. Coaches from Luxembourg’s leading startup accelerator Fit 4 Start and from the House of Startups helped them refine their sales approach and establish the processes that would support their first commercial traction. 

Fit 4 Scale, the recently launched national programme designed for ambitious companies ready to expand across Europe, has become a key resource. “We like these regular check-ins and it gives us great structure,” says Mr Ootes. The programme delivers tailored support in seven key areas and assigns each participant an experienced lead mentor to support their expansion into new markets and provide valuable insights on fundraising and access to additional public funding sources. 

Reflecting on his shift from a long corporate career to entrepreneurship, Mr Ootes highlights how different the day-to-day reality has become. In large organisations, senior roles often involve managing relationships and navigating internal dynamics. Building Partao allows him to return to the hands-on work he enjoys. “Being an entrepreneur means you wake up every morning and you have some fun,” he says. “I am really happy that I am now hands on, building a business and solving problems for customers, because that is what I love doing.”

His experience also shows how the Luxembourg startup ecosystem can accelerate a company’s early journey, especially when founders make the most of the programmes and networks available to them.

Read co-founder Virginia Strong’s perspective in the Women & Tech series.