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February14,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
ThisisthethirdreportinourseriesonEuropeanstartupcapitals.Parisisaleadingstartuphubgloballyandisthethird-largestEuropeancenterforstartupdevelopment.ThemainfactorsthatmakeParisoneofthetopstartuphubsinclude:
1) Knowledgespillovers:Thecityishometotopuniversitiesandresearchinstitutions,andrankshighintermsofR&Dexpenditure.
2) Accesstocapital:Paris-basedtechstartupsperformwellintermsofaccesstoearly-stagefundingandcrowdfunding.
3) Marketreach:Thecity’seconomyisoneofthelargestinEurope.
Deborah Weinswig
Managing Director,
Fung Global Retail & Technology
US: 917.655.6790
HK: 852.6119.1779
CN: 86.186.1420.3016
Deep Dive: Paris—
The Third-Largest European Startup Hub
2
February14,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
TableofContents
ExecutiveSummary.........................................................................................................................................3
Introduction....................................................................................................................................................4
1.TheParisStartupEcosystem........................................................................................................................4
TopParis-BasedStartups.................................................................................................................................4
Retail-FocusedAcceleratorsandIncubatorsinParis........................................................................................6
LookForwardbyShowroomprivé..............................................................................................................6
ImpulsebyVente-Privee.com....................................................................................................................9
OtherParisAcceleratorsandIncubators.........................................................................................................10
2.TheContext................................................................................................................................................11
Paris:TheThird-LargestEuropeanStartupHubandCatchingUp....................................................................11
WhatMakesParisaTopStartupHub.............................................................................................................11
HowParisCompareswithOtherStartupHubs...............................................................................................13
ParisRanks11thinthe2015GlobalStartupEcosystemRanking...............................................................13
ParisRanks5thintheEuropeanDigitalCityIndex2016............................................................................14
KeyTakeaways...............................................................................................................................................15
3
February14,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
ExecutiveSummaryThisisthethirdreportinourseriesonEuropeanstartupcapitals.Init,weprofilethreeParis-basedstartupsthathavemanagedtoattractsubstantialinterestfrominvestors:twotechcompanies,BlaBlaCarandDeezer,andVestiaireCollective,amarketplacefortheresaleofluxuryfashion.
Fashionandretailarethefocusoftwostartupsupportprogramslaunchedbyflash-salescompaniesShowroomprivéandVente-privee.com.In2015,ShowroomprivélaunchedLookForward,anincubatorthatsupportsnewcompaniesinfashionandretail,whileVente-privee.comannouncedthelaunchin2017ofanacceleratorprogramwhichaimstosupportcompaniesintech,fashionandretail.Weprofilethetwoprograms,andtheparticipatingstartups,inthisreport.
Parisisthethird-largeststartuphubinEuropebytotalinvestment,afterLondonandBerlin.TheFrenchcapitalshowedatotalinvestmentof€2.36billionin2014(latest).Parisstartupsattractedanaverageof€106,580investmentpercompanyversus€18,292inBerlin,accordingtoouranalysisofdatafromStartupHubsEurope.
InvestmentsinFrenchtechstartupsroseby84%between3Q15and3Q16,accordingtotheresearchfirmCBInsight.TheFrenchgovernmentandthecityofParisrecognizetheimportancetothecity’seconomyofcreatingafavorableenvironmentforstartup.Amixofprivateandpublicinvestmentswillsoonresultintheopeningoftheworld’slargeststartupcampusinParis,StationF,a35,000-square-meterstartupincubator.
ThereportalsoexamineshowPariscompareswithotherstartupclustersinEuropeandacrosstheglobe.Weconsidertworankings:Compass’s2015GlobalStartupEcosystemRanking,inwhichParisranks11th,andnonprofitorganizationNesta’sEuropeanDigitalCityIndex2016,inwhichitranked6th.Parisexcelsinthefollowingindicators:
• Knowledgespillovers:Thecityishometotopuniversitiesandresearchinstitutions,andrankshighintermsofR&Dexpenditure.
• Accesstocapital:Paris-basedtechstartupsperformwellinaccesstoearly-stagefundingandcrowdfunding.
• Marketreach:WithaGDPof$715billion(€647billion),thecity’smetropolitaneconomyisoneofthelargestinEurope.
TheabilitytoattractandretaintalentandthebusinessenvironmentarefactorsthatdragonParis’scompetitivenessasastartuphub.Stringentemploymentlawsmakethecityoneofthemostdifficultplacestohireemployees.Thecityperformsrelativelypoorlyinfactorssuchascostofofficespaceandeaseofdoingbusiness.
Parisisthethird-largeststartuphubinEuropebytotalinvestmentafterLondonandBerlin.
ThereportalsoexamineshowPariscompareswithotherstartupclustersinEuropeandacrosstheglobe.
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February14,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
IntroductionParisisaleadingstartuphubgloballyandoneofthetopEuropeancitiesforstartupdevelopment.YoungcompaniesinParisbenefitfromtheincreasinglevelofinvestmentfromthepublicandprivatesectorandfromthepresenceoftop-rankeduniversitiesandresearchinstitutions.
ThisreportprovidesanoverviewofParisasastartupecosystem,andexamineshowthecitycompareswithotherstartupclustersinEuropeandacrosstheglobe.ItisthethirdreportinourseriesonEuropeanstartupcapitals.OurpreviousreportsfocusonLondonandBerlin.
Wedividethereportintotwosections:
1) TheParisstartupecosystem:Thissectionreviewsthecity’skeystartupsandaccelerators,withafocusonretail-relatedcompanies.
2) Thecontext:Inthissection,weconsidertworankings:Compass’s2015GlobalStartupEcosystemRankingandNesta’sEuropeanDigitalCityIndex2016.
1. TheParisStartupEcosystemInthissection,wediscussthebiggestParisstartups,profiletworetail-relatedacceleratorsandprovidearundownofothernotableacceleratorsandincubators.
TopParis-BasedStartupsBlaBlaCarandDeezerarethetwoParis-basedstartupsthatraisedasignificantlevelofcapitalfrominvestors,asshowninFigure1.VestiaireCollective—afashionretailmarketplace—alsoraisedsubstantialinvestment.
BlaBlaCarisacar-ridesharingservicethatconnectsdriversandpassengersheadingtothesamedestination.Thecompanyoperatesin22countries.BlaBlaCarisbackedbyAccelPartners,InsightVentures,IndexVenturesandLeadEdgeCapital,andreceived$200million(€180million)infundingin2015,accordingtoCrunchbase.
Source:Blablacar.co.uk
YoungcompaniesinParisbenefitfromtheincreasinglevelofinvestmentfromthepublicandprivatesector.
BlaBlaCarandDeezerarethetwoParis-basedstartupsthatraisedasignificantlevelofcapitalfrominvestors.
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February14,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Deezerisamusic-streamingappandonlineplatform,whichgivesusersaccesstoacatalogueof40millionlicensedtracksand30,000radiochannels.Deezerhasanestimated6.9millionsubscribersasofDecember2016,accordingtoresearchfirmMIDIA.Thecompanyraised$110million(€99million)infundingin2016alone,accordingtoCrunchbase.
Source:Deezer.com
VestiaireCollectiveisamarketplacefortheresaleofluxurygoods,asortofeBayforhigh-endfashion.VestiaireCollectivechecksthequalityoftheitemsbeforetheyaredispatchedtocustomers.Thissystemstrengthensconsumers’trustandthecompany’sbrandreputation.
Thecompanywasestablishedin2009andhasreceivedatotalof$130million(€118million)infunding,including$62million(€56million)onJanuary24,2017,accordingtoCrunchbase.Investorsincludeprivate-equityandventure-capitalfirmsVitruvianPartners,VentechandBaldertonCapital.
Thecompany’smainmarketisFrance,whereitgenerates35%ofitsrevenue,butthefirmalsooperatesintheUK,Germany,Italy,SpainandtheUS,andisplanningtoexpandtoAsiain2017.
Source:Vestiairecollective.com
VestiaireCollectiveisamarketplacefortheresaleofluxurygoods,asortofeBayforhigh-endfashion.
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February14,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Figure1.SelectedParisStartupsbyTotalFundingValue
Startup Sector YearFounded FundingValueBlaBlaCar Transportation 2006 €280million
Deezer MediaandEntertainment
2006 €196million
Devialet ConsumerElectronics 2007 €131million
VestiaireCollective CommerceandShopping
2009 €56million
Showroomprive.com CommerceandShopping
2006 €42million
Doctolib HealthCare 2013 €25million
Happn CommunityandLifestyle
2013 €20million
FiguresatJanuary2017Source:Crunchbase
Retail-FocusedAcceleratorsandIncubatorsinParisParisishometoanumberofacceleratorsandincubators.Acceleratorsandincubatorsofferdifferenttypesofsupporttostartups,whichwedescribeinmoredepthinourreportAccelerators&IncubatorsinLondon.
LookForwardandImpulsearetwoexamplesofretail-focusedorganizationsinParisthathelpstartupstogrow.
LookForwardbyShowroomprivéLookForwardisanincubatorlaunchedin2015bye-commerceflash-salessiteShowroomprive.com.LookForwardsupportsfashionandretailstartupswithayear-longprogram.Moreover,theincubatororganizesayearlyFashionTechfestivaltoshowcasethemostsignificantinitiativesfromstartupsandfashionbrands.Thisyear,thefestivalwillbeheldfromJune28toJuly2atLaGaîtéLyriqueinParis.Bysupportinginnovativeventures,LookForwardaimstodisruptthewayfashionisproduced,distributedandconsumed.
Theprogramgivesstartupsaccesstotheincubator’sofficesinParisandtoapoolofmentoringcompanieswithexpertiseinfinance,logistics,administration,HR,marketingandcommunication.MentoringfirmsincludebankSociétéGénéraleandAmazonWebServices.
Source:Lookforwardproject.com
LookForwardandImpulsearetwoexamplesofretail-focusedorganizationsinParisthathelpstartupstogrow,supportingfashionandretailstartupswithayear-longprogram.
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February14,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
The selection criteria for a successful application to the program are thefollowing:
• Afocusonfashionandretail:Applicantsshouldhavethepotentialtodisruptthewaythefashionandretailindustryoperates.
• Internationalpotentialandscalability:Applicantsneedtoprovethattheirbusinesshasthepotentialtogrowandexpandinternationally.
• Aviableandprovenproject:Thecompaniesapplyingmusthavebeenalreadyfoundedandneedtopresentaproofofconcept.
• Acommittedteam:Thecompaniesmusthaveateammadeupofpassionateandpragmaticentrepreneursthataimtoseetheirfirmgrowing.
Inthefollowingtable,weprofilethecompaniesthathavetakenpartinLookForward’sprogramsinceitsinception.
Figure2.StartupsthatJoinedtheLookForwardIncubatorProgram
Induoisamakerofcotton-shirtfabricenhancedwithinvisibletechnology.Thefabricobtainediswater-andstain-repellentaswellasbreathable(odorresistant),butmaintainsthelookandfeelofregularcotton.WeprofiledthecompanyinourreportProfilingInduo,OfferingWater-RepellentCotton.
AskAnnaisanappthatenablesuserstoexchangefashiontips.Userscansharephotosoftheiroutfitswithfriendsorotherfashion-consciousindividualsthatusetheapp.
Clic&Fitisane-commerceretailer.Throughitsonlineplatform,customerscanaddinformationabouttheirstylepreferences,selectanumberofoutfitthattheylike,havethemsenttothemtotryon,decidewhichonetobuyandreturntheothers.
DeRigueurisacompanythatdesignsandsellsleathergoodssuchasmen’spurses,smartphonecasesandtabletsleeves.TheproductsarehandmadeinFrancewithhighspecificationandclassicdesign.
Dresswingisanonlineplatformthatenablestherentingofhigh-enddressesandaccessoriesfromotherusers.
Iglooenablesuserstohaveclothesfromlocalboutiquesdeliveredtothemtotryon.Thecustomerischargedfortheitemsthatshedecidestokeep,whiletheunwanteditemsarecollectedandreturnedtothestorebyadeliveryagent.Thecostoftheserviceis€1peritemandiscurrentlyavailableonlyinParis.
LouisAntoinetteisanonlineportalthatcaterstoDIYenthusiastswhowanttosewtheirownclothing.Theretailersendsclientscompletekits—includingthepattern,fabricandhaberdashery—neededtomaketheoutfit.
Applicantsshouldhavethepotentialtodisruptthewaythefashionandretailindustryoperates.
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February14,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Upfitisaservicethathelpsconsumerstoselecttherightsizewhenbuyingonline,inturnhelpinge-commerceretailerstoreducereturns.Througha“FindmySize”tagontheretailer’sportal,thecustomercanenterherdatatoenableanalgorithmtocalculatewhattherightsizeis.
Wepopitisanonlinefashionretailerthatspecializesinindependentbrands.
Hivencyisanonlineportalthatputsfashionandapparelcompaniesintouchwithinfluencers.Thelattercanbuildtheirprofileontheportalandasktoreceiveproductsfromcompaniesforfreeinexchangeforgeneratingcontentonsocialmedia,includingInstagram.Thecompaniesgainfromthesocialmediaexposure.
Maintoolembedstechnologyintofashionaccessories.Theirfirstproduct,Classi,isaleathersmartstrapforclassicwatches.
TheChatbotFactoryhelpscompaniestoconnectwithcustomersthroughmessagingappssuchasWhatsApp,FacebookMessengerandKik,inordertodriveabrand’sengagement.
SegundoPisoisane-commercefashionretailerthattargetscustomersbasedintheFrench-speakingCaribbeanandFrenchGuyana.Itoffers48-hourdeliveryserviceandpricesinlinewiththeMetropolitanFrancemarket.
Africkreaisane-commercemarketplacefocusedonfashionapparelmadebyAfrica-basedorAfrica-inspiredfashiondesigners.
Endeerprovidesatechsolutiontolingeriemanufacturersandretailersthatcreates3D-printedandmade-to-measurelingerie.Thecustomerofalingerieretailercanscanherchestwithasmartphone.Endeer’salgorithmcreatesagenerativedesignbasedontheuniqueshapeofthecustomer,andthedesignis3Dprintedandintegratedintheproductionstageofthelingeriecompany.
Adoptrsisanappthathelpsuserstofindtheapplicationsthatsuittheirinterests.Throughanalgorithmdevelopedbythecompany,Adoptrsrecommendsnewappsandshowswhatnewappshavebeendownloadedbyfriends.
Birdycentisanappthatenablesuserstorounduptheirpurchasestothenearesteuroanddepositthechangeinsavingaccountsfrom140banks.
Source:Lookforwardproject.com
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February14,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
ImpulsebyVente-Privee.comImpulseisasoon-to-be-launchedacceleratorfromflash-saleswebsiteVente-Privee.com.TheacceleratorwillbelocatedinStationF,astartupcampusthatwillopeninApril2017,inParis.WedescribeStationFinmoredetailelsewhereinthisreport.
Accordingtoitswebsite,Impulseaimsto“tosupportthebestFrenchandEuropeanstartupsinvolvedinimaginingthetoolsoffashionfortomorrowandtheonlineandofflineconsumptionoffashion,bydevelopingthefunctionalities,technologiesandservicesneeded.”
Source:Accelerateur.vente-privee.com
Impulsewillprovideanine-monthsupportprogramtonewcompanies.Theprogramwillenablestartupstoaccess:
• Ateamoffivepeople:Thesestaffworkfulltimeattheacceleratortosupportcompanies.
• Abusinessmentor:Aprofessionalthatwillshareknowledgeonthestartup’sbusinessissues.
• Anelevatorday:Anoccasiontopresentthebusinessideatoacommitteeofinvestors.
• Mutualsupportsessions:Occasionstoshareideaswithotherstartupentrepreneurs.
• Workshops:Sessionsonfinance,legal,technical,commercialandfund-raisingissuesledbysector’sexperts.
• Pitchtrainingsessions:Supportonfundraisingandhowtoattractinvestors.
Vente-Privee.comiscurrentlylookingfor20startupsinfashion,techandretailtojointheprogram.Theflash-salesfirmislookingforcompaniesthataimtoprovidesolutionstooptimizeconsumers’onlineexperienceintheretailfashionsectorandtechnicalinnovationsaimingtodigitalizeandtransformthecustomers’shoppingexperienceinfashion.Toqualifyfortheprogram,companiesshouldhavethefollowingcharacteristics:
• Objective:Startupsshouldaimtogrowtheirrevenueandpossiblyaimforinternationalexpansion.
• Location:ThecompaniesmustbebasedinEurope.
Impulseisanacceleratorthate-commerceflash-salessiteVente-Privee.comisabouttolaunch.
Vente-Privee.comiscurrentlylookingfor20startupsinfashion,techandretailtojointheprogram.
Impulsewillprovideanine-monthsupportprogramtonewcompanies.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
• Sizeandmaturity:Companiesshouldhaveatleasttwoemployeesand12monthsofactivity.
• Capital:Thepartnersmustholdatleast50.1%ofthesharecapital.
• Theteam:Thecompanyshouldsharethevaluesofambition,humilityandintegrity.
OtherParisAcceleratorsandIncubatorsFurtherexamplesofacceleratorsbasedinParisarelistedbelow.
Figure3.ParisAcceleratorsandIncubators
Source:Paris-tech-guide.com
Name URL BriefDescription
MicrosoftVentures–ParisAccelerator
https://microsoftventures.com/accelerators/paris
MicrosoftVenturesAcceleratorisathree-monthprogramaimedathelpingstartupsbuildtheirproductsandstrengthentheirbusinesses.Theprogramoffersfreetechnical,designandbusinesscoachingfromcompaniessuchasEventbrite,DeezerandCriteo.
L’Accélérateur http://laccelerateur.fr/ L’Accélérateurisathree-monthacceleratorwhichhelpsstartuptogrowbyprovidingawiderangeofsupportsuchasmentorshipandmediaexposure.
LeCamping https://paris.numa.co/startups/ LeCampingisafour-monthaccelerationprogramatNuma,adigitalhubintheheartofParis.LeCampinghelpsstartupsonspecificmatters,fromproductdevelopmenttofinanceandlegalissues.
50Partners http://en.50partners.fr/ 50Partnersisanincubatorfoundedby50ITentrepreneurs,amongwhichFredericMazzella(founderandCEO,Blablacar)andJustinZiegler(founder,PriceMinister),whichprovidesentrepreneurswithfreesupport,services,workspaceandmentorship.Itskeyexpertiseincludesweb,media,mobileandsoftware.Entrepreneursjointhefour-monthprogrambymaking50Partnersastakeholder—upto7%commonshares.
Agoranov http://www.agoranov.com/ Agoranovisapublicincubatorfoundedbyseveralscientificinstitutions,includingtheUniversityPierreandMarieCurie,ParisDauphine,EcoleNormaleSupérieureandParisTech.Ithashelpedcreatemorethan250innovativecompaniesinvariousscientificfieldssuchashealth,biotechnologiesandsecurityservices.
PartechShake http://partechshaker.com/ PartechShakeroffersstartupsofficesinParisinteractionwithglobalcorporatesandrecruitmentadvice.Italsohostsvariouseventsrelatedtodigitalbusiness,technologyandopeninnovation.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
2. THECONTEXTInthissection,weconsidertheenvironmentforstartups,acceleratorsandincubatorsinParis.
Paris:TheThird-LargestEuropeanStartupHubandCatchingUpParisisthethird-largeststartuphubinEuropebytotalinvestment.DespiteregisteringlowertotalinvestmentandalowernumberofcompaniesthanLondonandBerlin,Parisstartupsattractedanaverageof€106,580infundingpercompanyversusBerlin’s€18,292,accordingtoouranalysisofdatafromStartupHubsEurope.
Figure4.StartupEnvironmentinParisvs.LondonandBerlin:KeyFigures,2014
Indicator Paris London Berlin
TotalInvestment €2.36billion €8.32billion €3.13billion
EmployeeCount 135,866 1.49million 666,187
Revenue N/A €207billion €45.5billion
NumberofCompanies 22,143 276,280 171,112
Source:StartupHubsEurope
WhatMakesParisaTopStartupHubTheFrenchgovernmentandthecityofParisrecognizetheimportanceofcreatingafavorableenvironmentforstartupstogrowthasawaytocreatejobsandboosttheeconomy.
ThecityofParisrunsaseriesofinitiativesaimedathelpingstartupstogrow.TheseincludeParisFinancePlus,whichgivesfinancialsupporttonewcompaniesthatfollowcertainsocialandenvironmentalcriteria;RéseauEntreprendreParisandParisInitiativeAmorçage,whichsupportswithgrantsthosestartupswithstronggrowthandinnovationpotential;andADIEParisInitiativeEntreprendre,whichhelpsnewcompaniestoaccesscredit.
Source:paris.fr
Pariscompaniesattracted€106,580infundingpercapitaversusBerlin’s€18,292percapita.
ThecityofParisrunsaseriesofinitiativesaimedathelpingstartupstogrow.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
PublicandprivateinvestmentshavebeenincreasinginabidtohelpParistocatchupwithotherEuropeanstartuphubssuchasLondonandBerlin.Privateinvestorshaveraised€200milliontobuildStationF,a35,000-square-meterstartupcampus—theworld’slargestsuchcampus—expectedtoattract1,000domesticandforeigntechnologycompaniestotheFrenchcapital.
StationFispartofanurbanregenerationprojectwhichreceived€70millioninfundingbythecity’sauthorities.HalleFreyssinet—thebuildinginwhichthestartupincubatorislocated—wasusedbythestaterailwaycompanyasaloadingdock.ThestartupcampusisexpectedtoopenonApril1,2017.ImpulsebyVente-Privee.com,profiledearlier,willbebasedinthecampus.
Source:Stationf.co
Theeffortsofbothpublicandprivateinvestorsappeartobestartingtoproduceresults.Frenchinvestmentintechstartupsroseby84%betweenthethirdquarterof2015andthethirdquarterof2016,accordingtotheresearchfirmCBInsight.ThevastmajorityoftheseinvestmentswereinParis-basedcompanies.ThestronggrowthininvestmentflowishelpingtheFrenchcapitaltocatchupwithLondon.
Figure5.TotalInvestmentsinTechStartups(EURMil.)
Source:CBInsight
417
768802 824
641
414
3Q15 3Q16France UK Germany
Frenchinvestmentintechstartupsroseby84%between3Q2015and3Q2016.
Privateinvestorshaveraised€200milliontobuildStationF,a35,000squaremetersstartupcampus.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
HowParisCompareswithOtherStartupHubsInordertobetterunderstandwhichcharacteristicsmakeParisoneofthetopstartupecosystemsglobally,weconsideredtwoindexes—oneglobalandoneregional—whichrankstartuphubsaccordingtospecificindicators:the2015GlobalStartupEcosystemRankingandtheEuropeanDigitalCityIndex2016.
ParisRanks11thinthe2015GlobalStartupEcosystemRankingParisisthe11th-bestecosystemforstartupsglobally,accordingtothe2015GlobalStartupEcosystemRankingcompiledbyCompass,aSanFrancisco-basedonline-analyticscompany.Theindexranksstartuphubsonfivecriteria:
1) Performanceofthefundinginvestedinthestartups
2) VCfundingandthetimeittakestoraisecapital
3) Talentavailability
4) Marketreach
5) Startupexperience,suchasmentorshipbyveteranstartupfounders
Thecriteriaisbasedoninsightscollatedfromdifferentsources,includingsurveysandinterviewswithstartupsandentrepreneurs.TheindexdoesnotcoverChina,SouthKoreaorJapan.Intermsofspecificindicators,Parisperformswellinmarketreach,butlagsotherhubsintalent.
Marketreach:WithaGDPof$715billion(€647billion),Paris’smetropolitaneconomyisoneofthelargestinEurope,andsignificantlyabovetheEuropeanaverageof$300billion(€271million),accordingtoCompass.Otherthanthecity’seconomy,theUS,FranceandChinaarethetoptargetmarketsforParis-basedstartups.
Talent:Parislagsotherstartuphubsinitsabilitytoattracttalent.Stringentemploymentlawsmakethecityoneofthemostdifficultplacestohireemployeescomparedtootherhubs.Ittakes54daystohireanengineerinParis.ThiscompareswiththeEuropeanaverageof47days.Moreover,withonly22%ofstartupemployeescomingfromoutsideFrance,theParissceneislessdiversethanintherestofEurope,wheretheregionalaverageis35%offoreignemployeesworkinginstartups.
Figure6.2015GlobalStartupEcosystemRanking:ParisRankingforEachIndicator
Indicator Ranking
MarketReach 6/20
Performance 13/20
Funding 13/20
StartupExperience 15/20
Talent 16/20
Note:Rankingisoutof20,with1/20thebestresultand20/20theworstresult.Source:2015GlobalStartupEcosystemRanking
Parisisthe11th-bestecosystemforstartupsglobally.
Paris’smetropolitaneconomyisoneofthelargestinEurope.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
ParisRanks5thintheEuropeanDigitalCityIndex2016TheEuropeanDigitalCityIndex2016ranks60Europeancitiesbasedonhowwelltheysupportdigitalentrepreneurs.ItiscompiledbyNesta,aUKinnovationandinvestmentcharity.Therankingsarebasedonindicatorssuchasavailabilityoffinancingandskilledworkers,andqualityofsupportinginfrastructureandnetworks.In2016,Parisranked5th.
Knowledgespillovers:Paristakesthetopspotinthisindicator.Thecityishometotopuniversitiesandresearchinstitutions,andrankshighintermsofR&Dexpenditure.
Accesstocapital:ParisranksasatopstartuphubinEuropeforbothearly-stagefundingandcrowdfunding.Paris-basedtechstartupsraisedalmostdoublethecapitalraisedbyBerlin-basedstartupsandnotmuchlessthanLondonstartups,asfigure5aboveshows.
Non-digitalinfrastructure:Goodairportandtrainconnectivitycontributetotheresultinthisindicator.
Businessenvironment:Thecityperformsrelativelypoorlyinfactorssuchascostofofficespaceandeaseofdoingbusiness.FrancetendstohavehighertaxesandbureaucracythanotherEuropeancountries.Moreover,Englishisnotwidelyspoken,remoteworkisstillnotpopularandthecostoflivingisrelativelyhighwhencomparedtootherlargeEuropeancities.
Figure7.EuropeanDigitalCityIndex2016:ParisRankingforEachIndicator
Indicator Ranking
KnowledgeSpillovers 1/60
AccesstoCapital 2/60
Non-digitalInfrastructure 6/60
DigitalInfrastructure 7/60
EntrepreneurialCulture 16/60
Mentoring 21/60
Market 27/60
Skills 27/60
Lifestyle 50/60
BusinessEnvironment 58/60
Note:Rankingisoutof60,with1/60thebestresultand60/60theworstresult.Source:Nesta
ParisranksasatopstartuphubinEuropeforbothearly-stagefundingandcrowdfunding.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
KeyTakeawaysParisisaleadingstartuphubgloballyandoneofthetopEuropeancentersforstartupdevelopment.Parisisthethird-largestEuropeanstartuphubafterLondonandBerlinbytotalinvestmentattracted.Thecityranks11thinCompass’s2015GlobalStartupEcosystemRankingand5thinNesta’sEuropeanDigitalCityIndex2016.
InvestmentsinFrenchtechstartupsroseby84%between2015and2016,accordingtotheresearchfirmCBInsight.ThemainfactorsthatmakeParisoneoftheleadingstartuphubsinclude:
• Knowledgespillovers:Thecityishometotopuniversitiesandresearchinstitutions,andrankshighintermsofR&Dexpenditure.
• Accesstocapital:Paris-basedtechstartupsperformwellinaccesstoearly-stagefundingandcrowdfunding
• Marketreach:Paris’smetropolitaneconomyisoneofthelargestinEuropeandsignificantlyabovetheEuropeanaverage.
TheabilitytoattractandretaintalentandthebusinessenvironmentarefactorsthatdragonParis’scompetitivenessasastartuphub.Stringentemploymentlawsmakethecityoneofthemostdifficultplacestohireemployees.Thecityperformsrelativelypoorlyinfactorssuchascostofofficespaceandeaseofdoingbusiness.
TheabilitytoattractandretaintalentandthebusinessenvironmentarefactorsthatplayagainstParis’scompetitivenessasastartuphub.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comFilippoBattainiResearchAssociate
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