The (slow) French tech revolution

We all agree that French economy is inefficient, dominated by an obsolete labour law, with a slow-motion family capitalism and low employee’s productivity.

So how they succeed in both creating big companies and having a fertile start up environment?

French has 26 companies in the Fortune 500 Index. In Europe, just the United Kingdom has more companies (28), while Germany has just 18 companies in the Fortune 500 Index.

The sector mix of the French representation is very varied. Together with former monopolistic players (as EDF and Total), are included fashion conglomerated (Christian Dior, Hermes, LVMH), Telco players (Vivendi), Beverage and Spirits producers, cars manufacture, Pharma players, and several other industries.

So far so good…

But if we analyse the longevity of those 28 companies, we discover that they were the same 28 companies present in the Index 10 years ago. This testimony the reliance of the French economy on established players with sometimes more than 100 years of history.

By comparison around of 50% of the American companies present in the Fortune 500 Index 10 years ago are now out from the Fortune 500 Index, showing the vivacity of the American economy and its ability to create big companies in a short time and replace companies that do not innovate.

However, things are slowly changing in the approach of French companies to innovation and nurturing of start-up.

Be an entrepreneur is becoming cool. While until few years ago, be a tech entrepreneur in French was a close synonymous for being considered unemployed, entrepreneurship it is now becoming a sexy term.

In the 2017 GP Bullhound Report about the status of European Tech sector, are listed the 57 European Unicorn (https://www.gpbullhound.com).

France has now 3 Unicorns, Bla Bla Car, Criterio and Vente-Privee.com, with a cumulative value of $8.1bn.

The recent opening of Station F in Paris (www.stationf.co), the biggest incubator in Europe, will be a further push to the tech entrepreneurship of the Country.

I am becoming positive about making seed investments in France, and if you have an interesting opportunity please do not hesitate to contact me at davide@graffiti-syndicate.com