Understanding France's DeepTech start-up scene

“[J]e veux que la France soit championne en la matière et se positionne enpointe de cette nouvelle revolution industrielle.”

(“I want France to be a champion in this field and to be at the forefront of this new industrial revolution.”) - President Macron, X.

After announcing his commitment to make France a leader in the field of AI and DeepTech last summer, the nation held its annual, and Europe’s largest technology event, VivaTech. There, and in person, the President reconfirmed the continuation and expansion of his original plan to make France “championne de l’innovation”. (BFMTV)

He has run his presidency on making France a “startup nation”, advocating for policies and investment to foster greater research, innovation and entrepreneurship. (Inc.) His vision has been to make France a leader by embracing digital transformation, using the State to support the growth of the nation’s tech industry.

This culminated in “France 2030”, a plan to commit €30bn towards creating the “high-tech champions of the future” by 2030. (Gouvernenment, EuroNews) Since then, Macron has added to this plan with an additional aim of seeing the creation of 100 French tech unicorns within the same timeframe. (Sifted)

Bpifrance, France’s sovereign wealth fund, has been Macron’s sword in fighting this battle. In 2022 alone, it invested €13.5bn into the French start-up ecosystem (Bpifrance).

So, with all this ambition and funding being poured into France, how has it done so far?

• France has 29 unicorns – with more than 60% of them headquartered in Paris – and number of soonicorns;
• 12,000 start-ups in the Paris Greater Metropolitan area – more than London and Berlin;
• There are 1,500+ active investors in France, behind only the UK and Germany;
• The nation has the strongest growth in tech-focused job searches of any European country; and
• According to the WIPO’s ‘Global Innovation Index 2023’, France supplanted China to become the 11th most innovative country in the world.

(French Unicorn, EuroNews, Sifted, State of European Tech, WIPO, Sifted)

After making his way through the aisles of VivaTech 2023, President Macron joined an exclusive panel of start-ups on Stage One to address the AI landscape of France.

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Sitting on the panel was Gilles Meyer, CEO of Actronika – a leading specialist in haptic technology and BTV portfolio company. Meyer took the opportunity to ask about the country’s plans relating to industrialisation, competitiveness, cultures, and the metaverse. In his response, Macron announced a series of follow-on commitments to France 2030:

• €500mn to finance the creation of 5-10 AI-clusters;
• Massive investment to boost France’s computing capacity and accelerate the development of AI;
• €7bn raised from institutional investors under the Tibi 2 Initiative, with a target of €10bn; and
• €200mn dedicated to immersive culture and the metaverse.

(Youtube, Club Innovation Culture)

Speaking with Meyer afterwards, he praised the event as “very important” and “well-prepared”, notably saying of France:

“What I see is that the people in government are very cognizant of the different verticals that they want to push, it’s clever. … I think not only the people in the local government are up to date with what is happening, but they know who are the potential actors that will matter in the future.”

He continued:

“We have great talent in France, great schools, the tech culture is well-developed, and obviously, the government is doing as much as possible to be able to cater to the needs up to a certain level of those companies.”

When asked, however, what the challenges were that France faced, Meyer pointed towards the funding environment across Europe:

“In Europe, you’re always talking millions. In the States, they’re talking billions.”

Despite the fundraising success of French VC funds, French start-ups were less fortunate with their funding which plummeted 41.8% in 2023 – one of the sharpest drops in Europe. (Sifted)

Start-ups in France look to be supported at the ideation and creation stages, but scaling these businesses is where deep-pocketed institutional investors need to be involved. The growth stage of these companies is a common problem faced around the world’s innovation hubs, including the UK.

France, however, have the Tibi Initiatives to carry this. What started as a report flagging the insufficient financing available to French technology companies, turned into €5bn in funding under Tibi I. The first initiative placed France as the leading European ecosystem for financing new technologies. (Gouvrenement)

These initiatives set France apart from other European nations whereby they emulate the US’s position and encourage institutional investors into high-risk technology investments, something the UK even falls short on. Tibi II has now secured €7bn to replicate the success of Tibi I to bring more institutional investors into the nation’s innovation ecosystem.

France has all the pieces for them to become a genuine rival to the dominance of Silicon Valley. With only five years remaining, the race is on for France to achieve its ambitious France 2030 plan.

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To find out more about Actronika, visit www.actronika.com