The French Innovation Economy Is On Fire!

Macron Announces €5 Billion Targeted for Late-Stage Rounds and IPO’s

And that is just the beginning. Under the leadership of Cedric O, French Minister of the Digital Economy, and Kat Borlongan, Director of La French Tech, France is shaking things up. In less than five years since its inception, France is poised to become the #1 startup ecosystem in Europe.

Source: Your 5 key takeaways from this week’s French Tech announcements

Your 5 key takeaways from this week’s French Tech announcements

Last night, President Macron unveiled plans to help French Tech level up fast. But practically speaking, what does it all mean and more importantly — what’s in it for startups? (Lire en français.)

1. Making it rain: 5 billion EUR are about to fall upon the heads of France’s most promising startups.

The good news: French Tech went from an irksome lack of venture capital 4 years ago, to raising megaround after megaround in 2019.

Let’s take a moment to admire the impressive rounds we’ve had in just the past 6 months: Meero ($230M), Doctolib ($170M), Kyriba ($160M), Mano Mano ($120M), Ynsect ($120M), Dashlane ($120M), Vade Secure ($77M) and Wynd ($79M.)

The better news: There is still a lot of room for growth. And a lot more capital to back it.

President Macron announced yesterday that, following artful negotiations led by the French government, 5 billion is the total pledged amount from a collective of institutional investors and insurance companies to be redirected into French Tech over the next three years:

  • €2 billion will be invested in French venture capital funds focusing on late-stage investments. The goal here is to enable these funds reach a size of over €1 billion each, allowing them to take part in rounds of €50 to 100 million or more.
  • €3 billion will be invested via asset managers based in France who specialize in listed tech companies. The goal here is to gear up for IPOs by French Tech champions poised to go public.

If you have a hard time imagining how big that amount is, chew on this: in 2018, the total amount raised by every single French startup combined was just €3.6 billion. Shazam.

2. The French Tech Mission grew 10x, from 15 to 150+ persons. That’s what happens when French Tech strategy officially becomes part of national strategy.

The French Tech Mission — and I say this with enormous gratitude and pride — is now both the biggest and, organizationally-speaking, weirdest pro-startup team in modern government.

A short history lesson (Skip this if you’ve heard this song before):

When the French Tech Mission was first created in 2013 it was a team of 9. The pioneering team’s goal then was to advocate for startup culture, federate diverse members of a budding tech ecosystem, and put the red rooster on the map.

By the time I was appointed Director in 2018, that goal had been accomplished. More importantly, the world had already changed and with it, the things that needed to be done. Dubbed the “second” French Tech Mission, our goal became to make France one of the best countries in the world to start and scale global tech champions with a positive impact on the country. A tall order and yes, as you may have already guessed, certainly not something a 9-person taskforce can handle.

Fast forward to present day: Under Cedric O’s (our rockstar Minister of State for Digital Affairs) leadership, French Tech strategy has now been officially incorporated into national strategy. Startups are no longer about hoodies and ping-pong, but about creating opportunities, making sure France gets a say in a world where tech giants get a seat at the table, and moving the French economy forward.

President Macron’s announcements mark the arrival of the following extended members of our team. We will be onboarding them in the months to come:

  • A network of appointed « French Tech Government Correspondents » from 45 different ministries, government agencies, and regulators. On top of fueling our latest program (see #4) with a never-before-seen collection of perks, they also work with us to coordinate pro-startup policy at a national level. (Yes, we share a single Kanban board with a long to-do column.)
  • Heads of Economic Departments from the French Treasury stationed in embassies in all countries with French Tech Communities. Their job descriptions get tweaked to welcome new responsibilities helping our scale-ups with market entry, international development and attracting talent abroad.

…Oh, and did I mention we’re still hiring?

(If you need a refresher on French Tech’s strategy — in French — listen to me pitch it on-stage at last year’s French Tech Community Summit.)

3. We just published the Next40, a list of 40 rising French Tech champions with the strongest prospects of global growth

La French Tech and Bpifrance just published a list of 40 French startups with the strongest prospects of global growth based on economic performance criteria (available on our website). This list comprises companies that have their head offices in France and that have not yet undergone a trade sale or floated on the stock market.

The Next40 set the standard for the kind of tech champions France needs — companies whose growth translates to a positive impact on the French Tech ecosystem and the economy as a whole. Median growth in the last 3 years for Next40 companies is at 158%. More importantly, while more traditional companies are dealing with stagnating net job creation, growth in Next40 employee numbers averaged 30% in the last 12 months.

(Also, let’s be honest here: beyond celebrating each individual Next40 company and their journeys, we’re also celebrating that this list exists at all. Our team sifted through this data and can tell you with absolute confidence than even just a year ago, we wouldn’t have been able to pull a list of 40 companies performing at this level.)

It is our hope that by celebrating and supporting the Next40 that they are able to reach their full potential and pave the way for the next generation of French entrepreneurs.

Meet our first-ever recipients:

4. More than just another list, the Next40 grants access to a historically unprecedented list of perks, pooled together by 40+ ministries and government agencies.

Spotlight as one of France’s 40 future tech champions, in national marketing campaigns and other global French Tech communication efforts.

Pre-IPO support from Euronext carried out by a team of experts (lawyers, bankers, auditors, etc.) Euronext is creating a pre-IPO “Next40 Roadshow,” allowing them to meet one-on-one and to pitch directly to market analysts and specialists of the European tech scene.

Admission into French Tech 120France’s new growth-stage program which offers unprecedented support to help bolster them become global leaders. For up to one year, French Tech 120 companies (of which the Next40 are a subset) get access to a swath of advantages too long to list here. The short version:

  • 3 wishes. French Tech 120 can go into Aladdin-mode and request up three things of the French Tech Mission and its Correspondents throughout the year. Within the limits of legality, of course. “I need to strengthen our network in China. Can our CEO join the President’s official delegation?” Sure. “We need to simulate how our tech would work in a rocket launch. Would the National Space Agency (CNES) let us use their facilities?” Very likely. “We’re about to hire 30 people from 5 countries and need them and their families to get to France in a month. Can I get coordinated visa support from our embassies?” No problemo.
  • Bizdev opportunities with the state. Expedited approval as supplier companies, and business appointments with ministries and government agencies such as UGAP (France’s public procurement department), the Ministry of Armed Forces or the CNES (France’s national space agency).
  • On top of the 3 wishes, unlimited access to a range of services offered by 40+ ministries and government agencies, designed to meet the needs and speed of startups in hyper-growth. Our growing catalog is split into 4 categories: international development, funding, go-to-market and support with government-related issues.
  • A wide (and totally legit) berth for experimentation: Government support to build customized regulatory and legal sandboxes. This means French Tech 120 companies, especially those in areas that move too fast for proper regulation, may benefit from regulatory and legal exemptions over a pre-determined period of time.

Year-round support from a dedicated “Startup Engagement Manager,” to help them make the most of the program.

(Applications open for the remaining 80 of the French Tech 120 in December 2019. Talk to your French Tech Capitals or sign-up for our newsletter to make sure you’re in the loop.)

5. As far as gender balance amongst France’s top founders go, there is no other way of putting it: It sucks.

There’s no way of sugar-coating this: Out of the 40 companies, only one has a female founder. One.

As you might imagine, there were many that made affirmative action suggestions. But, look: our selection criteria are quantitative, and neither Cedric O nor myself believe in modifying it to artificially add more women.

If we want more diversity in France’s highest performing startups, it’s not our criteria that we need to change, it’s our ecosystem.

Granted, startups are so much more than just their founders. We tend to reinforce this cult of the founder, when — especially at the growth stage — success is about the team. Diversity is far from dire at the company-level: 40% of Next40 companies’ employees are women, with similar gender ratios amongst their senior staff. The question I’ve been asking myself is: If there are so many women leading startups at C-level roles, then why aren’t there more women founding them?

Role models play a big part in improving gender balance. The French Tech Mission no longer speaks at, partners with or funds tech events with less than 35% of female speakers. It’s not just symbolic engagement, it is a strict policy written into all our event contracts. We’re still cooking up new ways to do more. In the meantime, I encourage anyone reading this to, please, have your companies adopt the same policy.

(If you’re asking, “Well, what about socio-economic diversity?” read “We need to make tech entrepreneurship more inclusive. And for that we need your help.” or check out our new talent program, French Tech Tremplin.)

Kat Borlongan

WRITTEN BY

Director, French Tech Mission (French Ministry of Economy and Finance)