January 2022 saw France create their 25th unicorn.
Impressively, this number was reached a full three years ahead of the ambitious unicorn schedule set by President Emmanuel Macron in 2025. Macron’s broader goal is to achieve 100 French unicorns by 2030, including 25 green unicorns (companies focused on creating technology that will reduce human impact on the environment). And the French indeed appear to be on track to crack this tech target.
French tech companies raised EUR 11.6 billion in funds in 2021. This was an increase of 115 percent against 2020. Overall, it was a record-breaking fundraising year for the sector.
The country’s steep climb up the unicorn ladder is even more impressive when one considers they only possessed three unicorns five years ago. They still fall behind their European competitors. The UK currently boasts 44 unicorns, while Germany is home to 30. That said, in France, the number of unicorns has tripled in the last three years, compared to just 69 percent in the UK and 44 percent in Germany.
Is France a tech hub?
In the Global Innovation Index for 2021, France climbed to 11th, ascending five spots since 2019. Of the 132 countries ranked in the index, France was ranked 6th for creativity. This 13-position improvement since 2019 was backboned by the country’s output in design patents in the scientific and industrial sectors.
According to the European Patent Office, France is second in Europe for filed patents and number five worldwide.
What technology is France known for?
France has bet big on deep tech, which includes tech solutions designed to tackle advanced engineering and scientific challenges like artificial intelligence, autonomous driving, and space flight. For instance, in 2019, Macron declared a EUR 2.5 billion plan to develop 500 French deep tech startups annually from 2025 onwards. Almost one in four startups in France’s Next40 program comes from the deep tech sector. In line with the France 2030 plan, from 2022 to 2026, the “Industrial startups and SMEs Plan” will make EUR 2.3 billion available to industrial deep tech companies.
France has backed itself to thrive in deep tech for two core reasons. They heavily invested in research, industrial network, and a perceived lack of U.S. competition in this area. In 2021, France increased their number of deep tech startups by 30 percent. And in January of 2022, a warehouse robotics manufacturer, Exotec, became the country’s first deep tech startup to reach the coveted unicorn status.
Where is the Silicon Valley of France?
The tech sector in Paris is fast-growing due to considerable infrastructure and data center investments. For instance, Paris tech companies can access eight regional business clusters and 1,200 research and development (R&D) centers. The Paris tech hub is tightly linked to the internationally renowned startup campus Station F.
This is a 50,000-square metercampus created to encourage startup activity in the city. It houses 1,000 early-stage startups, 30 startup programs, 35 public administrations, 150 VCs, and four mentorship offices. American tech giants like Facebook and Google have set up research centers for their AI endeavors in the city.
What are some of the most prominent French unicorns?
As France continues to produce unicorns at an incredibly high rate, there are a few that stand out for their current valuations and success to date, including:
- Qonto, founded in 2016, is a freelancer and small business payment platform. It is currently valued at USD 5 billion.
- Sorare, a blockchain-based fantasy football platform, was founded in 2018 and is valued at USD 4.3 billion.
- Mirakl, founded in 2012, is a cloud-based ecommerce software platform valued at USD 3.5 billion.
- ContentSquare is a customer journey analytics platform that is cloud-based and AI-powered. Founded in 2012, it is now valued at USD 2.8 billion.
- ManoMano, an online home renovation marketplace founded in 2012 is valued at USD 2.6 billion.
Can France reach its unicorn targets?
The “La French Tech” initiative created by the government is designed to accelerate the 40 top-performing startups to unicorn status. This entails fast-tracking any administrative requirements and integrating startups into the government’s economic policies. “French Tech 140” is another government scheme that aims to repeat the successful blueprint of “La French Tech” but on a larger scale.
The government has also assigned a tech correspondent to all government agencies. This is aimed at weaving a network of government employees into the administrative fabric of French governance, which will naturally work toward the interest of startups.
All of this preparation, and crucially, government assistance, means it is likely that France can succeed in its ambitious unicorn plans and convert the country into a tech startup hub.
What are the challenges for French startups reaching unicorn status?
A study released by EY and France Digitale in September highlighted that recruitment is the main challenge faced by tech startups in France. Korn Ferry also reported that France is one of the most affected countries by the recent skills shortage. For example, in France alone, more than 15,000 cybersecurity expert positions – an in-demand role among tech companies to prevent against data breaches and attacks — are open but not filled, according to a report by consulting firm Wavestone.
To maintain the upward trajectory of the country’s unicorn growth, successful recruitment is crucial. To accomplish this, companies need to hire talent abroad more efficiently. Compliance is always an obstacle, with companies weary of the headaches that different laws and regulations can bring.
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