Paris, the up­start startup cap­i­tal

Kuwait Times - - ANALYSIS -

Could Paris, the City of Light, soon be­come known as the City of In­no­va­tion help­ing pro­pel young en­trepreneurs to push tech­no­log­i­cal and busi­ness fron­tiers? While ef­forts by Paris to lure fi­nan­cial com­pa­nies from London in the wake of Bri­tain’s vote to leave the Euro­pean Union have dom­i­nated the head­lines, a dif­fer­ent sort of ri­valry has also been play­ing out. With over three dozen startup in­cu­ba­tors, in­clud­ing the con­ti­nent’s largest, and soon the world’s largest, Paris is vy­ing with London to be­come Europe’s in­no­va­tion cap­i­tal.

Although per­cep­tions are that France is not as friendly a place to do busi­ness - it ranked 27th compared with 6th for Bri­tain in the World Bank’s ease of do­ing busi­ness last year - a re­cent sur­vey shows that Paris is catch­ing up to London and other top spots among star­tups. “There isn’t just Sil­i­con Val­ley to help star­tups emerge, Paris is to­day in the top three worldwide,” said Loic Dosseur, co-direc­tor of Paris and Co, the city’s eco­nomic devel­op­ment and in­no­va­tion agency.

The EY con­sul­tancy found that France squeaked by Bri­tain for the num­ber of start-up fi­nanc­ing op­er­a­tions in the first half of this year. Part of the rea­son is an ex­pand­ing net­work of in­cu­ba­tors to foster the growth of star­tups. In­cu­ba­tors of­ten pro­vide star­tups with more than just of­fice space, such as ad­vice on dif­fer­ent as­pects of run­ning a busi­ness and make them more vis­i­ble to po­ten­tial in­vestors. Some fo­cus on cer­tain sec­tors to help pro­mote bet­ter fer­til­iza­tion of ideas.

Startup Spring­board

Take, for in­stance, The Trem­plin, or Spring­board in English, an in­cu­ba­tor ded­i­cated to help­ing sports-related star­tups that is lo­cated in­side Jean Bouin sta­dium in Paris. One of The Trem­plin’s clients is Yppa, which of­fers a plat­form to har­ness the smart­phones of spec­ta­tors for light shows at sta­di­ums and con­certs that launched in May. “You want to trans­mit, share what you’ve done, the ad­ven­ture that you are liv­ing,” said Yppa’s co-founder Francois De­cock.

The Trem­plin is one of nearly a dozen in­cu­ba­tors that has been set up by Paris and Co in a city that now hosts some 250 star­tups. Dosseur said The Trem­plin’s fa­vor­able at­mos­phere was in keen de­mand by star­tups, with eight ap­pli­ca­tions for ev­ery place. And Paris is push­ing for­ward to meet that de­mand. “We opened the Cargo this year which is the largest in­cu­ba­tor in Europe with 15,000 square me­tres hous­ing 50 star­tups,” said Jean-Louis Mis­sika, the as­sis­tant to Paris Mayor Anne Hi­dalgo for eco­nomic at­trac­tive­ness and devel­op­ment. Paris will soon get the world’s largest in­cu­ba­tor with Sta­tion F, a 34,000-sq-m fa­cil­ity bankrolled by Xavier Niel, who shook up the French Internet and mo­bile mar­ket with his low-cost Free ser­vice.

Fund­ing Bo­nanza

The report by EY found that in the first half of the year, France edged out Bri­tain in the num­ber of fi­nanc­ing op­er­a­tions for star­tups. France had 27 per­cent of the to­tal op­er­a­tions, fol­lowed by 25 per­cent for Bri­tain and 22 per­cent for Ger­many. “The trend is good and achiev­ing first place is in­ter­est­ing as it gives us ar­gu­ments to at­tract for­eign in­vestors that want to in­vest in Europe, in par­tic­u­lar the Chi­nese and Amer­i­cans,” said Jerome Faul, head of the in­no­va­tion cap­i­tal com­mit­tee at the AFIC as­so­ci­a­tion of French pri­vate eq­uity firms.

By the amount raised, how­ever, Bri­tain was far in the lead at 34 per­cent, with France in sec­ond place at 16 per­cent, although that was still over one bil­lion eu­ros. Martin Mig­not, a part­ner at the In­dex Ven­tures, which op­er­ates in the United States and across Europe, says it is far eas­ier to raise large amounts of late-stage fund­ing in London due to the depth of the cap­i­tal mar­kets there. But for early stage star­tups “look­ing for only two, ten or even twenty mil­lion, then you can do it in Paris”, said Mig­not, whose firm has fi­nanced star­tups such as Bri­tish food de­liv­ery ser­vice De­liv­eroo and the Paris-based on­line ad­ver­tis­ing firm Cri­teo, which has gone pub­lic.

Quant Ad­van­tage

While London still has the lead in at­tract­ing in­ter­na­tional tal­ent, Mig­not said Paris is at­trac­tive to com­pa­nies as “it has a slightly lower cost base and prob­a­bly more avail­able tal­ent, es­pe­cially in en­gi­neer­ing”. Paris univer­si­ties are es­pe­cially known for pro­duc­ing quants - top­notch math­e­ma­ti­cians - who cre­ate the al­go­rithms be­hind soft­ware. “I think this is one area where France has a big ad­van­tage,” he said. Mig­not said he was prac­ti­cally alone when he be­gan look­ing for star­tups in France to in­vest in seven years ago, but now there are a num­ber of for­eign ven­ture cap­i­tal firms with staff based in Paris, which he pointed to as an in­di­ca­tion of the devel­op­ment of the mar­ket. The French state has also played an im­por­tant role in fund­ing star­tups, with a 600-mil­lion-euro seed fund that it launched sev­eral years ago, mind­ful that they can drive the cre­ation of new jobs.

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.