Where are we with Emmanuel Macron’s “startup nation”?

June 2017. Newly elected President Emmanuel Macron is on his way to VivaTech in Paris, which is the French equivalent of the famous CES (Consumer Electronics Show) in Las Vegas. He walks the aisles for hours and ends with a poignant homage to “hyper-innovative France,” one that makes commitments without setting limits and that he intends to stimulate with tax cuts and lower fees. The last part is in English. Obviously. This is the moment when the new head of state calls for the birth of a “startup nation”.

The trick stuck to him. And even if Covid-19 and then Russia’s escalation towards war in Ukraine took him away from that image, and he decided to talk about pension reform and audiovisual license fees for his official entry into this campaign, Emmanuel Macron never misses an opportunity to salute the health of the young French escapes. Just like in January with the announcement of the 25th Tricolor Unicorn, a start-up with a valuation of at least $1 billion. A goal he set in 2019, when there were only five of them, and which was achieved three years in advance. icing on road mapNo. 26 has further joined the ranks since then with Spendesk, a platform that centralizes all employee spending.

So isn’t startup nation great? But if, milady, the ecosystem is all right. Startups raised €11.6bn in 2021, up 115% from 2020’s €5.4bn, according to EY’s latest barometer. According to the same background, there are 27,000 startups now, compared to 9,400 in 2016. In total, they have created almost a million jobs, and are projected to create 250,000 more by 2025. The bottom line is that one in four French people uses at least one unicorn every week (Doctolib, Blablacar, Lydia, Deazer, etc.) .

We have to admit that this dynamism is evident when you come to the PayFit premises. The young Parisian boxer, which has been offering VSE and SME tools for payroll and human resource management since 2016, joined the unicorn club at the very beginning of January, raising 250 million euros thanks to an American fund. Last year, she settled in the 8th arrondissement, a stone’s throw from Gare Saint-Lazare, in a former huge hangar where trains were repaired. The completely refurbished offices with huge glass roofs stretch over two floors and pretty well reflect the image we have of this kind of place where we talk about ‘to date’ investment. late stage ” (which interfere from the second round of the table) or “scalability” (the ability to evolve). Financial results are displayed in real time above the doors, employees, whose average age is barely 30 years old, move between open offices, “phone booths” and cozy sofas when they are not taking a nap or playing foosball.

New PayFit premises, rue de Saint-Petersburg in Paris.
New PayFit premises, rue de Saint-Petersburg in Paris. -PayFit

Thomas Zhanjan welcomes us to the large conference room. At 44 years old, 20 of which have been in tech, this former Criteo (world leader in online ad targeting) with a “grandfather profile” he says was hired last June as COO (Chief Operating director, “COO” in VF) to “take the company to the next level”. “We have 6,000 customers, we are present in four countries [France, Allemagne, Royaume-Uni, Espagne]. This year we are going to hire 400 more people, which means we will have more than 1,000,” he lists. We are experiencing very strong growth and a monstrous market ahead of us as we have the potential to meet the needs of millions of small businesses. »

“Strategic economic question”

PayFit’s goal is to offer these smaller organizations the same HR tools as larger ones, despite the fact that human resources are by definition more limited, allowing their employees to have access to the support they need for their well-being and productivity. “It is often difficult for these companies to manage this aspect. It makes sense to help them, because, in my opinion, they represent the real economy,” explains Thomas Zhanzhan.

“Startups have created affordable and popular services that are widely used. They have become a strategic economic issue,” says Maya Noel, CEO of France Digitale, an association representing more than 1,800 French digital entrepreneurs and investors. Evidence of this is that the structure saw five presidential candidates (Yannick Jadot, Anne Hidalgo, Valerie Pecresse, Eric Zemmour, Nicolas Dupont-Aignan), as well as representatives of Emmanuel Macron and Jean-Luc Mélenchon, go through their digital economy event. , entrepreneurship and innovation, last Wednesday. “In 2017, digital technologies were present in only a few programs. Today it is in everyone,” welcomes the leader.

Here we must put an end to a fairly common label. Startups have not grown like magic thanks to the arrival of a 40-year-old president who sometimes wears a suit without a tie and uses English words in his sentences. A movement that stuttered in the 2000s accelerated dramatically during the five-year rule of François Hollande. At the end of 2012, the Banque Publique d’Investissement (BPI) was created, specifically responsible for financing the growth of French companies, and then in 2013, Digital Economy Minister Fleur Pellerin launched Operation French Tech. Goal: “To make France one of the most attractive countries in the world for start-ups that want to get started and intend to conquer international markets. ” Only that.

The government of Philippe and later of Castex continued this momentum, for example by voting on the Pacte law in 2019 containing six measures intended for start-ups and creating a system called the “Tibi Initiative” to encourage the institutions of investors (banks or insurance companies) to invest in rounds. Because it turned out that in order to raise funds worth more than 40 million euros, French startups often had to attract foreign capital. “Yes, there has been clear political voluntarism during the last five years, but this success is due to all the consistent efforts since 2010,” Maya Noel says. And then this is a general trend, not only French. While the amount invested in startups doubled last year in France, they followed the same trend or even slightly better in Germany and the UK.

Investors for all stages of development

In fact, France is only catching up with its European neighbors – not to mention the newcomers to Silicon Valley. But it’s starting to have its napkin ring in this global market. The last CES in January was attended by 130 French startups, the second largest contingent after the US. “A whole marketing campaign is being carried out around French entrepreneurship, which really helped all the companies that started their activities in 2014-2015,” Alexandre Martin estimates. The 30-year-old knows what he’s talking about: He founded Colonies with two friends in 2017. His company offers a new concept of housing, a cross between a hotel and a roommate. Clients, mostly young workers, rent a room or studio in a residence of sorts that provides access to large common areas and services such as a gym, hot tub, garden or rooftop, depending on the location.

Thanks to several fundraisers, the Colonies now have a presence in Ile-de-France, Lille, Marseille, Bordeaux, Toulouse and Berlin, with Lyon, Nantes, Montpellier and Brussels waiting in the coming weeks. “All the investors we need to finance the various stages of development [capital-risque au départ, capital-développement ensuite] there is now. Previously, there were none, there was a kind of glass ceiling because it was difficult to attract large investors, he says. Today, you have all the European and US funds listed on the Paris market that you can request. This is one of the big changes in recent years. “Fifteen years ago, creating PayFit would have been difficult,” confirms Thomas Zhanjan. I’m not sure we’d find enough to raise the money so easily. »

Talent war

However, there is still much to be done to continue this ascent. At the moment, a war is raging to poach “talent”, as they say in the industry. “Today, the main obstacle to development is finding the right solutions,” says Maya Noel, CEO of France Digitale. There is a lot of tension in the market because there are many requirements and skills change very quickly. “It is for the training of new digital professions (the profiles of product developers, data analysts and salesmen are the most in demand today) that we should put a package on,” our interlocutors insist. But “we can’t just wait for the next generation to arrive and be ready, we have pressing needs,” says Maya Noel. In particular, she recommends making it easier to own employee shares, “a real leverage when you don’t have the funds to equalize wage levels,” and introducing tools that make it easier to attract foreign talent. The “French technical visa”, introduced at the end of 2016, allowed the pump to start up, but its scope became too narrow.

These are the challenges of the next five-year term, with or without Emmanuel Macron. Because the mid-startup does not wear T-shirts “to go” in support of the re-election of the outgoing. “The most important, besides the person, the image of youth, were the facts,” sums up Thomas Zhanzhan. La French Tech has already started and it was really important for us to see if we were going to accelerate further. It was. For us on the inside, his “startup nation” was more than just a side effect. But if another president arrives tomorrow, older and with a different language, if he continues all this, that is also good. Technological “grandfather” is not worried. “We’ll see what the campaign is like, but there’s no reason to stop it,” he says, smiling.

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