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If you ask a passerby about France, you are likely to get bombarded with clichés — you’ll get the wine, the cheese and the baguette thrown back at you within 30 seconds. If you’re lucky, you may get something on Camus or Baudelaire (but then you have really lucked out, so do pinch yourself). French tech is probably the last thing that would come up in the conversation. This, though, has been quietly, and rapidly, changing — the tech scene in France is gaining massive traction.
Now, it would be untrue to say that this is a completely new trend and that tech investors have entirely neglected France. Many, like ourselves, have been a fixture at the (sadly defunct) LeWeb, we invested in early French startups like Seesmic and Jolicloud, were avid readers of Rude Baguette (and its author’s subsequent thoughts and insights), and its predecessor Tech Baguette. After all, the first institutional round of Criteo was over 10 years ago. What has really changed, though, is the rate of change. France is rapidly entering an acceleration. So watch your backs, Silicon Valley, Sentier is after you!
Conscious of the accelerating pace of change in France, which we first flagged publicly in our 2016 State of European Tech Report, a large portion of the Atomico team headed to Paris last week to meet the with start-ups, investors and the wider founder and tech community.
Did I mention we are really excited about French tech? L-R Bryce Keane, Sophia Bendz, @nzennstrom, Yann de Vries, Evgenia Plotnikova (that’s me :-)), dmhynes, Niall Wass and alexis bonte
Have we seen a tipping point, a déclic? The indications are clear. France is now challenging the UK as an investment destination, having surpassed Germany for the first time in years. $2.7 billion was invested in France in 2016, up 63% on the previous year, vs $2.1bn raised by German start-ups in the same period and $3.7bn invested in the UK. With €472m already put to work across 169 rounds to date (according to Dealroom.co), 2017 is looking good. I, for one, tend to think that although the pace of change is accelerating, conditions for it have been fertilizing the French soil for a number of years.
Below are some of the reasons I think the time is now ripe for French entrepreneurs to take centre stage.
Great «paper» with a trove of valuable insights.
Given this, it is paradoxical to see 2 significant omissions :
1/ La French Tech was born from a Government initiative in 2013, heralded by former Minister Fleur Pellerin (now founder of Korelya Capital) following a report ordered by the Prime Minister to Caisse Des Dépôts (disclosure : I wrote it with a Shadow Advisory Board including Tariq, Richard, and a few others).
Fleur Pellerin came up with the brand, secured 215 M€ public money from the Investments for the Future Program, and gave responsibility to Caisse Des Dépôts to deploy.
2/ Speaking of public money, the “paper” also misses one of the key reasons for La French Tech and its funding rises : since 2010, a huge amount of public money has been injected in sustaining French Startups, both directly and indirectly (funds of funds). The Investments for the Future Program (again) is deploying 2+Bn € of investment money into funds, covering from early stage to growth capital. (Disclosure: I represent Caisse des Depots as the sole LP in these various funds).
They have invested either as an LP (in 25 seed funds nation wide, as well as in growth funds like Partech, KeenSight, Sofinnova to name a few), or as a minority co-investor in dozen of startups like Scality, Netatmo, SigFox, Actility, Ynsect to name a handful…
All these investments are since 2012 operated by Bpifrance, the French Public Investment Bank (and Caisse des Depots’s larger subsidiary)
Such massive public money injection had therefore created an equally massive leverage effect.
Both points should hence have deserved IMHO a mention in this remarkable post as well as Bpifrance...