New funds! Mergers! Acquisitions! Expansions! Right now, the French startup scene is HOT.The French startup scene gets a bad rap in the US. Part of it is the language barrier — non US startups rarely get coverage in the US commensurate with their size. Part of it is France’s reputation as a slacker country, and occasional boneheaded moves by the government. And of course, strikes and riots don’t help.
That being said, though, France has some amazing startups. Arguably the most valuable privately held startup in Europe is Vente Privée, the French inventor of the so-abundantly-copied private sales model. France has several continent-beaters (if not yet world beaters) in, among others, Meetic, Dailymotion, PriceMinister, respectively the European leaders in dating, online video and marketplace commerce.
What’s more important is that, kind of like New York, Paris has been experiencing a renaissance as a startup hub since the financial crisis. Several new, highly qualified super angel funds have cropped up, expanding the supply of always-too-scarce early stage capital. Startups are mushrooming everywhere. And, recently, M&A activity has picked up. All these elements are combining to rocket Paris to the next level, and the past few months have shown that.
Liligo is a travel price/comparison site that was founded in 2006 and was acquired by SNCF, the French national railway operator, for a reported 20-30 million euro. The site was active in 10 countries, had 40 employees and boasted 2 million monthly unique visitors.
(Source: TechCrunch France -- French)
Both Benchmark Group and CommentCaMarche.com are French content sites, and the sector is consolidating. Benchmark Group owns various news/content sites like Journal Du Net and Journal Des Femmes, as well as Copains d'Avant, the (emphasis on the quotes) 'French Facebook,' a site where you could easily find former classmates... and ignore them more efficiently than ever before. The deal is worth a reported 60 million euro.
(Source: FrenchWeb.fr -- French)
Exalead was once hailed as the 'French Google.' By that benchmark $165 million isn't a great result, but Exalead has built a great and successful enterprise search business, growing sevenfold over the past 5 years. The company was recently acquired by Dassault Systemes, a French enterprise software juggernaut.
Embauche.com -- literally, 'Hire.com' -- is a French job board with a focus on small and medium sized businesses. The company was reportedly acquired this week by Pages Jaunes Group, the French Yellow Pages. As an aside, Pages Jaunes Group, which was acquired by several private equity firms, is a great example of a company successfully going digital. It now gets the majority of its revenue from its online operations, and has a stronghold among small and medium sized businesses.
The Embauche.com deal has yet to be confirmed, but it would make sense: it would mesh nicely with Pages Jaunes' job site and has the same target audience and market.
(Source: FrenchWeb.fr -- in French)
ISAI is a 'dream team' super angel fund, started by a bunch of ultra-successful French serial entrepreneurs. It got started earlier this year with a $33 million fund, and recently did a second closing on that same fund, boosting it to almost $50 million dollars. With their average investment under a million dollars, that's a lot of investments ahead.
(Source: FrenchWeb.fr -- in French)
Marc Simoncini is the founder of Meetic, the publicly traded European leader in online dating, and also the founder of Jaina Capital, a $130 million (!) angel fund. Simoncini recently got started on a new TV show that showcases young entrepreneurs called I>[email protected] on i-Télé, a French 24 hour news channel. Despite the horrible name, the show is great news in a country that is much less entrepreneur-friendly than the United States.
Le Monde is France's 'paper of record,' its most prestigious daily newspaper. Like most newspapers, it has hit some serious doldrums in recent years.
Enter Xavier Niel, self-made billionaire founder of Free, France's number one independent ISP, and also a cofounder of international seed fund Kima Ventures. Xavier Niel was part of a syndicate of investors who bought Le Monde earlier this year. This is like Larry and Sergey buying the New York Times (which was actually rumoured for a time). It's a huge symbol of just how important tech is in France now.
(Disclosure: I cofounded a Kima Ventures company.)
Taken individually, none of these news items is huge. But put together, they add up to something worth much more than the sum of its parts: evidence that the French startup market is switching into high gear.
Companies are now routinely getting acquired in the 8 figures range. Each time this happens, several new business angels come online. Last year has seen the creation of several super angel funds that are aggressively investing at the seed stage, and where investors are experienced entrepreneurs, not bankers, two things which are relatively new in France. Both of those things are a virtuous circle: the more acquisitions, the more investors; the more investors, the more acquisitions. This is the kind of environment from which the Googles of this world eventually emerge.
And the acquirers aren't just web companies, but companies from various sectors: travel, media, yellow pages, etc. Large French companies are finally understanding that the internet is vital to their business, that it's a real business, and that the best move is often to pony up for people who understand it better than them.
And French society is recognising and adapting to the startup boom. We now have a TV show. It's not just startupland that's recognising that something is happening. The red tape and overtaxation that was the lot of French startups has largely been cleared away over the past few years, and if you have a web startup in France these days your biggest government-related problem is probably picking from a buffet of subsidies.
These are first steps, but things are changing here. In a big way.
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