How France wants to become a tech giant

Elektronik

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Vive la France — that was the dominant message of the day throughout a tour of the French tech ecosystem. However is it time to spend money on French startups?

Round 40 companions of enterprise capital companies, in addition to restricted companions, got here to Paris to speak about tech in France, from Andreessen Horowitz to Greylock Companions, Khosla Ventures and extra. The 2-day roadshow happened at Station F, the Vision Institute, iBionext and the Elysée Palace.

I grew up in France and it all the time surprises me that the identical clichés come up many times. When Symphony founder and CEO David Gurle answered questions on what it’s wish to construct an engineering group in France, it might have been straightforward to foretell the questions — labor regulation is just not versatile sufficient, French individuals are lazy, they go on strike on a regular basis…

Based on Gurle, who's nice at storytelling, Symphony has been taking a look at round 15 nations for his or her subsequent workplace. They first chosen Singapore however couldn’t put a group collectively.

“We went to the board and stated the subsequent step is to spend money on France,” Gurle stated. At first, the board was actually reluctant, citing the identical considerations.

Chairman of Enterprise France and Ambassador for Worldwide Investments Pascal Cagni has been coping with these considerations for years. As an example, on the subject of labor regulation, he says the regulatory framework is now predictable and restricted — in contrast to within the U.Okay. or Germany, as an example. You'll be able to hearth individuals everytime you need. It signifies that you’ll need to pay a severance package deal, however every part is laid out.

Silicon Valley is overheating proper now. It’s develop into more and more costly and difficult to construct an organization — the tech business is getting greater and the most important tech corporations now dominate the expertise market. That’s additionally a part of the rationale why Silicon Valley veterans are wanting outdoors of their consolation zone.

Rushing issues up

The query wasn’t about whether or not startups in France are a factor or not. The tone of the dialog was about tempo and depth. Is it time to take a position now or ought to we wait?

“We’ve observed that we began investing extra in European startups with out even desirous about it — not simply French startups, however throughout Europe,” Battery Ventures Common Companion Chelsea Stoner advised me.

Relying on the research, France and the U.Okay. are battling to be the primary European nation on the subject of the variety of VC offers and the full sum of money raised.

Once I stated three and a half years in the past that France can be the tech chief in Europe, no one believed that — and it’s occurring. John Chambers

However much more essential than onerous information, the momentum has been fairly beautiful. A number of years in the past, I might cowl each single deal over $1 million. Now there are such a lot of startups valued at a whole lot of tens of millions of dollars that it’s arduous to maintain monitor of all funding rounds above $20 or $30 million.

France has a number of the greatest engineering faculties on the planet. And now, most students need to work for a startup. So if France has loads of capital and an enormous pool of expertise, what’s lacking? Ought to French startups get extra help from the French authorities?

“5 or 6 years in the past, I might have stated hold the federal government as distant as attainable and I used to be fallacious,” former Cisco CEO John Chambers informed me. Chambers is now ambassador for La French Tech and doesn’t spend money on French startups as a way to keep away from conflicts of curiosity. “Once I stated three and a half years in the past that France can be the tech chief in Europe, no one believed that — and it’s occurring,” he stated.

OpenClassrooms co-founder and CEO Pierre Dubuc stated throughout a panel that one piece of regulation that has helped his startup quite a bit is the French Tech Visa. Because of this program, the corporate can get visas for future staff in only a matter of weeks.

Chambers says that it really works each methods. American staff apply to the French Tech Visa, work for French startups for some time after which come again to the U.S. It strikes the needle with regards to altering mindsets within the U.S.

The French tech ecosystem additionally wants time. Whereas there are a ton of excellent engineers, a number of individuals informed me gross sales individuals and advertising expertise are nowhere close to the extent of American tech corporations.

Some staff might want to undergo three or four totally different corporations and expertise many various conditions to turn into higher. At this level, they will reinvest their information into startups.

Huge, late-stage VC funds may also assist velocity issues up. “Many individuals misunderstand the worth of enterprise capital,” Chambers informed me. Nicely-established funds have robust processes and know how one can rent prime administration. That’s why bringing these VCs and LPs to Paris might assist change issues.

Macron’s macroeconomics

With out turning this text right into a political piece, it’s exhausting to speak about overseas buyers coming to Paris with out mentioning the yellow vests motion.

LVMH Chief Digital Officer Ian Rogers had a nuanced tackle the modifications within the tech ecosystem. “It’s clear that they're [changing the mindset] and it’s clear that there’s opposition,” he stated. “That is an thrilling second, it’s additionally in all probability a bubble. Let’s see what’s on the opposite aspect.”

In different phrases, tech is usually a damaging business. No one needed to state that so immediately, however everyone had that in thoughts.

Ron Conway even informed me that Airbnb might be the answer to deal with inequalities. “This entire yellow coats situation, that’s about revenue inequality,” he informed me. There are 500,000 hosts in France producing $three billion in income — and there ought to be extra based on him. However I don’t assume startups can clear up every part, sadly.

“There are going to be a number of setbacks alongside the best way and we’re seeing that with the social motion, however we shouldn’t lose the top objective,” Chambers advised me.

In fact, seeing France implode is in nobody’s curiosity. VC companies are additionally taking a look at totally different alternatives as a result of Donald Trump and Brexit make the longer term unpredictable.

Nevertheless it’s unclear if minimizing social actions is wishful considering or long-term considering.

Shifting as a gaggle

What was fascinating about right now’s go to is that some individuals are already investing quite a bit in French startups whereas others are utterly new to the French tech ecosystem. Whenever you hear Tony Fadell say that he’s invested in French startups with Xavier Niel for a couple of years, it creates a worry of lacking out.

“You see how the valley goes, it strikes as a gaggle,” Chambers advised me.

Bringing dozens of buyers to Paris created some type of emulation. No one needs to be the primary one to spend money on one thing new, however no one needs to be the final one, both.

Listing of buyers:

  • Joe Schoendorf, Accel Companions
  • Martin Casado, Andreessen Horowitz
  • Bernard Liautaud, Balderton
  • Chelsea Stoner, Battery Ventures
  • Philippe Lafont, Coatue
  • Matt Turck, FirstMark Capital
  • Hany Nada, GGV Capital
  • Dana Settle, Greycroft
  • Sarah Guo, Greylock Companions
  • Irena Goldenberg, Highland Europe
  • Erel Margalit, Jerusalem Enterprise Companions (JVP)
  • Samir Kaul, Khosla Ventures
  • Philipp Freise, KKR
  • Klaus Hommels, Lakestar
  • Scott Sandell, New Enterprise Associates
  • Isaac Hillel, Pitango Enterprise Capital
  • Boaz Dinte, Qumra
  • Ron Conway, SV Angel
  • Mark Suster, Upfront Ventures
  • Talbot Heppenstall, UPMC
  • Paul Graham, Y Combinator
  • Jessica Livingston, Y Combinator

+ 17 restricted companions

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