"Successful startup hubs are international": Is Paris on the right track?

6 min read
03 May 2019

n recent years, Paris has been rising on the global startup stage. It's home to the world's largest startup campus, Station F, as well as the annual tech conference, VivaTech. Investment levels are also rising and some locals think entrepreneurship has become trendy. But in what ways can the City of Light’s ecosystem improve?

“The Parisian startup ecosystem isn’t as international as that of London, Berlin or Silicon Valley, but we are working to change that,” Roxanne Varza, director of the world’s biggest startup campus, Station F, told Startup Guide.  

Located in a former 1920s freight depot in the French capital’s 13th arrondissement, Station F opened in 2017 – the same year that President Emmanuel Macron unveiled his ambitious agenda to turn France into a startup nation. Now home to over 1,000 startups, the campus represents the country’s ambition to compete on the global startup stage.

In terms of new business creation, 2018 was a record year for the small but dense city, with nearly 700,000 new companies created in the tech, travel, tourism and hospitality industries.

We were the only English-speaking company in our incubator when we arrived two years ago.

In recent years, a rich array of organizations and events have also emerged to bolster the ecosystem, such as the annual tech conference in Paris, VivaTech, and startup accelerator, The Family.

In the run up to the launch of our Paris Vol. 2 guidebook which takes place this summer – featuring the hottest startups in the city, investors to keep on your radar and interviews from founders and experts – here’s a look at the aspects that are enabling the city’s startup scene to thrive.

A mover and shaker in the Paris startup scene: Roxanne Varza. Photo: Startup Guide

Rising investment and government initiatives

“There is definitely a sense of momentum in Paris at the moment,” says Sam Davies, a Paris-based founder of a content business for startups. Sam has been exploring the city’s startup scene over the last 18 months through his work as a journalist and in business development for news site, The Local.

“Paris is developing a reputation as a hub for innovative businesses and is shaking off its image as old-fashioned and strike-prone,” he adds.

Amidst uncertainty about how Brexit will impact the UK, and with Berlin’s rents inflating by the year, France has an opportunity to occupy more of Europe’s limelight, according to Sam.

With ambitions to topple London’s tech empire, Macron has begun to overhaul France’s economic and labor laws with the aim of reducing red tape and cultivating a more business-friendly environment for foreign founders.

Now, being an entrepreneur is considered trendy and helpful for society and the nation.

The French Tech Visa – introduced in 2017 to seduce entrepreneurs from overseas and encourage investment in deep tech and AI – is meant to accelerate the process for international tech startup founders looking to settle in France.

High profile investors have also taken note of the country’s promising ascent as a startup capital as levels of investment continue to rise.

From 2016 to 2017, the number of investment deals won by French tech companies grew by almost 45 percent, tech research and data platform CB Insights reveals, with Paris-based tech companies securing a record 347 deals in 2017.

In spite of all the hype, France still has a number of loopholes to jump through, says Sam. Although the government has tried to reduce taxation and make finance more readily available for startups through its public investment bank, bpifrance, Sam adds that the high costs associated with running a small business are still a notable challenge for young companies.

'Trendy' and impactful entrepreneurship

“In France, things have completely changed in the past five to seven years,” Quentin Sannié, cofounder and CEO of sound engineering and amplifiers company Devialet, told Startup Guide. “Now, being an entrepreneur is very trendy. It’s considered positive. It’s considered helpful for the society, for the nation.”

According to Quentin, the French tech movement has not only brought French industries into the 21st century but has also overturned traditional attitudes towards entrepreneurship.

Ahead of Paris’s VivaTech conference last year, Macron hosted the Tech for Good Summit at Palais de l’Elysée in the heart of the capital, gathering together 60 global tech leaders. These invitees included Mark Zuckerberg and Satya Nadella, the CEO of Microsoft, to discuss how tech can be leveraged to improve education, labor, and diversity.

Many startups in Paris are also using tech to pursue their own impact agendas. The French capital is home to startups such as the urban farm Agricool, which uses a vertical farming system based in the city to sell strawberries direct to consumers. There’s also Yuka, an app that helps consumers evaluate the nutritional value of food products.

Director of Station F, Roxanne Varza, says she's hoping to change the fact that the Paris ecosystem isn't as global as cities like London or Berlin. Photo: Startup Guide

What foreign founders should watch out for

“We were given a relocation package on a silver platter,” Lucas Lovell, cofounder of Hopstay, a smart city and tourism company that helps local governments optimize citizen support, told Startup Guide. Lucas moved with his company from Australia to Paris on the sails of the French Tech Ticket in 2017.

Among the 70 startups worldwide selected to join the program, Hopstay received a €45,000 grant from bpifrance to cover personal and business costs, four-year residence permits for their entire founding team and a spot in the Welcome City Lab tourism tech incubator.

Despite the initial welcome, Lucas says that his company felt like an alien presence in the startup scene. “When we first arrived two years ago, we were the only English-speaking company in our incubator. We definitely felt like foreigners,” he explains. “This presented a few challenges which caused us to adjust our sales approach and ramp up our French language skills.”

Paris is developing a reputation as a hub for innovative businesses; it's shaking off its image as old-fashioned.

In 2017, only 11 percent of startups in Paris had founders from outside the country, compared to 46 percent in Silicon Valley and 42 percent in London, according to the Global Startup Ecosystem Report. The same report reveals that only 10 percent of founders in Paris are women.

While Lucas says that the startup scene has become more international since he first arrived, Sam says that the mindset of the business environment “remains stubbornly French.”

“Traditionally, France has had a hierarchical attitude towards business; one that favors perfection,” Sam explains. “You can see that launching a flat-layered business, built around ideas of beta-testing and constant improvement, has been very hard for the French old-guard to grasp.”

Even though the term startup usually indicates flexible working and minimal hierarchy, the Paris ecosystem is still adapting to this new wave of activity, he adds. Moreover, while the government has undoubtedly implemented measures to attract foreign talent and diversify its ecosystem, Lucas and Sam agree that there’s room for improvement.

“For me, the most successful startup hubs are founded on cultural diversity and an international workforce,” says Lucas. “I think Paris is on the right track, but it’s still got a way to go.”

Main photo of Paris by Unsplash/Nil Castellvi