deep dive: paris - deborah weinswig€¦ · 14/02/2017  · vestiaire collective, a marketplace for...

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

ThisisthethirdreportinourseriesonEuropeanstartupcapitals.Parisisaleadingstartuphubgloballyandisthethird-largestEuropeancenterforstartupdevelopment.ThemainfactorsthatmakeParisoneofthetopstartuphubsinclude:

1) Knowledgespillovers:Thecityishometotopuniversitiesandresearchinstitutions,andrankshighintermsofR&Dexpenditure.

2) Accesstocapital:Paris-basedtechstartupsperformwellintermsofaccesstoearly-stagefundingandcrowdfunding.

3) Marketreach:Thecity’seconomyisoneofthelargestinEurope.

Deborah Weinswig

Managing Director,

Fung Global Retail & Technology

deborahweinswig@fung1937.com

US: 917.655.6790

HK: 852.6119.1779

CN: 86.186.1420.3016

Deep Dive: Paris—

The Third-Largest European Startup Hub

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

TableofContents

ExecutiveSummary.........................................................................................................................................3

Introduction....................................................................................................................................................4

1.TheParisStartupEcosystem........................................................................................................................4

TopParis-BasedStartups.................................................................................................................................4

Retail-FocusedAcceleratorsandIncubatorsinParis........................................................................................6

LookForwardbyShowroomprivé..............................................................................................................6

ImpulsebyVente-Privee.com....................................................................................................................9

OtherParisAcceleratorsandIncubators.........................................................................................................10

2.TheContext................................................................................................................................................11

Paris:TheThird-LargestEuropeanStartupHubandCatchingUp....................................................................11

WhatMakesParisaTopStartupHub.............................................................................................................11

HowParisCompareswithOtherStartupHubs...............................................................................................13

ParisRanks11thinthe2015GlobalStartupEcosystemRanking...............................................................13

ParisRanks5thintheEuropeanDigitalCityIndex2016............................................................................14

KeyTakeaways...............................................................................................................................................15

3

February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

ExecutiveSummaryThisisthethirdreportinourseriesonEuropeanstartupcapitals.Init,weprofilethreeParis-basedstartupsthathavemanagedtoattractsubstantialinterestfrominvestors:twotechcompanies,BlaBlaCarandDeezer,andVestiaireCollective,amarketplacefortheresaleofluxuryfashion.

Fashionandretailarethefocusoftwostartupsupportprogramslaunchedbyflash-salescompaniesShowroomprivéandVente-privee.com.In2015,ShowroomprivélaunchedLookForward,anincubatorthatsupportsnewcompaniesinfashionandretail,whileVente-privee.comannouncedthelaunchin2017ofanacceleratorprogramwhichaimstosupportcompaniesintech,fashionandretail.Weprofilethetwoprograms,andtheparticipatingstartups,inthisreport.

Parisisthethird-largeststartuphubinEuropebytotalinvestment,afterLondonandBerlin.TheFrenchcapitalshowedatotalinvestmentof€2.36billionin2014(latest).Parisstartupsattractedanaverageof€106,580investmentpercompanyversus€18,292inBerlin,accordingtoouranalysisofdatafromStartupHubsEurope.

InvestmentsinFrenchtechstartupsroseby84%between3Q15and3Q16,accordingtotheresearchfirmCBInsight.TheFrenchgovernmentandthecityofParisrecognizetheimportancetothecity’seconomyofcreatingafavorableenvironmentforstartup.Amixofprivateandpublicinvestmentswillsoonresultintheopeningoftheworld’slargeststartupcampusinParis,StationF,a35,000-square-meterstartupincubator.

ThereportalsoexamineshowPariscompareswithotherstartupclustersinEuropeandacrosstheglobe.Weconsidertworankings:Compass’s2015GlobalStartupEcosystemRanking,inwhichParisranks11th,andnonprofitorganizationNesta’sEuropeanDigitalCityIndex2016,inwhichitranked6th.Parisexcelsinthefollowingindicators:

• Knowledgespillovers:Thecityishometotopuniversitiesandresearchinstitutions,andrankshighintermsofR&Dexpenditure.

• Accesstocapital:Paris-basedtechstartupsperformwellinaccesstoearly-stagefundingandcrowdfunding.

• Marketreach:WithaGDPof$715billion(€647billion),thecity’smetropolitaneconomyisoneofthelargestinEurope.

TheabilitytoattractandretaintalentandthebusinessenvironmentarefactorsthatdragonParis’scompetitivenessasastartuphub.Stringentemploymentlawsmakethecityoneofthemostdifficultplacestohireemployees.Thecityperformsrelativelypoorlyinfactorssuchascostofofficespaceandeaseofdoingbusiness.

Parisisthethird-largeststartuphubinEuropebytotalinvestmentafterLondonandBerlin.

ThereportalsoexamineshowPariscompareswithotherstartupclustersinEuropeandacrosstheglobe.

4

February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

IntroductionParisisaleadingstartuphubgloballyandoneofthetopEuropeancitiesforstartupdevelopment.YoungcompaniesinParisbenefitfromtheincreasinglevelofinvestmentfromthepublicandprivatesectorandfromthepresenceoftop-rankeduniversitiesandresearchinstitutions.

ThisreportprovidesanoverviewofParisasastartupecosystem,andexamineshowthecitycompareswithotherstartupclustersinEuropeandacrosstheglobe.ItisthethirdreportinourseriesonEuropeanstartupcapitals.OurpreviousreportsfocusonLondonandBerlin.

Wedividethereportintotwosections:

1) TheParisstartupecosystem:Thissectionreviewsthecity’skeystartupsandaccelerators,withafocusonretail-relatedcompanies.

2) Thecontext:Inthissection,weconsidertworankings:Compass’s2015GlobalStartupEcosystemRankingandNesta’sEuropeanDigitalCityIndex2016.

1. TheParisStartupEcosystemInthissection,wediscussthebiggestParisstartups,profiletworetail-relatedacceleratorsandprovidearundownofothernotableacceleratorsandincubators.

TopParis-BasedStartupsBlaBlaCarandDeezerarethetwoParis-basedstartupsthatraisedasignificantlevelofcapitalfrominvestors,asshowninFigure1.VestiaireCollective—afashionretailmarketplace—alsoraisedsubstantialinvestment.

BlaBlaCarisacar-ridesharingservicethatconnectsdriversandpassengersheadingtothesamedestination.Thecompanyoperatesin22countries.BlaBlaCarisbackedbyAccelPartners,InsightVentures,IndexVenturesandLeadEdgeCapital,andreceived$200million(€180million)infundingin2015,accordingtoCrunchbase.

Source:Blablacar.co.uk

YoungcompaniesinParisbenefitfromtheincreasinglevelofinvestmentfromthepublicandprivatesector.

BlaBlaCarandDeezerarethetwoParis-basedstartupsthatraisedasignificantlevelofcapitalfrominvestors.

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Deezerisamusic-streamingappandonlineplatform,whichgivesusersaccesstoacatalogueof40millionlicensedtracksand30,000radiochannels.Deezerhasanestimated6.9millionsubscribersasofDecember2016,accordingtoresearchfirmMIDIA.Thecompanyraised$110million(€99million)infundingin2016alone,accordingtoCrunchbase.

Source:Deezer.com

VestiaireCollectiveisamarketplacefortheresaleofluxurygoods,asortofeBayforhigh-endfashion.VestiaireCollectivechecksthequalityoftheitemsbeforetheyaredispatchedtocustomers.Thissystemstrengthensconsumers’trustandthecompany’sbrandreputation.

Thecompanywasestablishedin2009andhasreceivedatotalof$130million(€118million)infunding,including$62million(€56million)onJanuary24,2017,accordingtoCrunchbase.Investorsincludeprivate-equityandventure-capitalfirmsVitruvianPartners,VentechandBaldertonCapital.

Thecompany’smainmarketisFrance,whereitgenerates35%ofitsrevenue,butthefirmalsooperatesintheUK,Germany,Italy,SpainandtheUS,andisplanningtoexpandtoAsiain2017.

Source:Vestiairecollective.com

VestiaireCollectiveisamarketplacefortheresaleofluxurygoods,asortofeBayforhigh-endfashion.

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Figure1.SelectedParisStartupsbyTotalFundingValue

Startup Sector YearFounded FundingValueBlaBlaCar Transportation 2006 €280million

Deezer MediaandEntertainment

2006 €196million

Devialet ConsumerElectronics 2007 €131million

VestiaireCollective CommerceandShopping

2009 €56million

Showroomprive.com CommerceandShopping

2006 €42million

Doctolib HealthCare 2013 €25million

Happn CommunityandLifestyle

2013 €20million

FiguresatJanuary2017Source:Crunchbase

Retail-FocusedAcceleratorsandIncubatorsinParisParisishometoanumberofacceleratorsandincubators.Acceleratorsandincubatorsofferdifferenttypesofsupporttostartups,whichwedescribeinmoredepthinourreportAccelerators&IncubatorsinLondon.

LookForwardandImpulsearetwoexamplesofretail-focusedorganizationsinParisthathelpstartupstogrow.

LookForwardbyShowroomprivéLookForwardisanincubatorlaunchedin2015bye-commerceflash-salessiteShowroomprive.com.LookForwardsupportsfashionandretailstartupswithayear-longprogram.Moreover,theincubatororganizesayearlyFashionTechfestivaltoshowcasethemostsignificantinitiativesfromstartupsandfashionbrands.Thisyear,thefestivalwillbeheldfromJune28toJuly2atLaGaîtéLyriqueinParis.Bysupportinginnovativeventures,LookForwardaimstodisruptthewayfashionisproduced,distributedandconsumed.

Theprogramgivesstartupsaccesstotheincubator’sofficesinParisandtoapoolofmentoringcompanieswithexpertiseinfinance,logistics,administration,HR,marketingandcommunication.MentoringfirmsincludebankSociétéGénéraleandAmazonWebServices.

Source:Lookforwardproject.com

LookForwardandImpulsearetwoexamplesofretail-focusedorganizationsinParisthathelpstartupstogrow,supportingfashionandretailstartupswithayear-longprogram.

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

The selection criteria for a successful application to the program are thefollowing:

• Afocusonfashionandretail:Applicantsshouldhavethepotentialtodisruptthewaythefashionandretailindustryoperates.

• Internationalpotentialandscalability:Applicantsneedtoprovethattheirbusinesshasthepotentialtogrowandexpandinternationally.

• Aviableandprovenproject:Thecompaniesapplyingmusthavebeenalreadyfoundedandneedtopresentaproofofconcept.

• Acommittedteam:Thecompaniesmusthaveateammadeupofpassionateandpragmaticentrepreneursthataimtoseetheirfirmgrowing.

Inthefollowingtable,weprofilethecompaniesthathavetakenpartinLookForward’sprogramsinceitsinception.

Figure2.StartupsthatJoinedtheLookForwardIncubatorProgram

Induoisamakerofcotton-shirtfabricenhancedwithinvisibletechnology.Thefabricobtainediswater-andstain-repellentaswellasbreathable(odorresistant),butmaintainsthelookandfeelofregularcotton.WeprofiledthecompanyinourreportProfilingInduo,OfferingWater-RepellentCotton.

AskAnnaisanappthatenablesuserstoexchangefashiontips.Userscansharephotosoftheiroutfitswithfriendsorotherfashion-consciousindividualsthatusetheapp.

Clic&Fitisane-commerceretailer.Throughitsonlineplatform,customerscanaddinformationabouttheirstylepreferences,selectanumberofoutfitthattheylike,havethemsenttothemtotryon,decidewhichonetobuyandreturntheothers.

DeRigueurisacompanythatdesignsandsellsleathergoodssuchasmen’spurses,smartphonecasesandtabletsleeves.TheproductsarehandmadeinFrancewithhighspecificationandclassicdesign.

Dresswingisanonlineplatformthatenablestherentingofhigh-enddressesandaccessoriesfromotherusers.

Iglooenablesuserstohaveclothesfromlocalboutiquesdeliveredtothemtotryon.Thecustomerischargedfortheitemsthatshedecidestokeep,whiletheunwanteditemsarecollectedandreturnedtothestorebyadeliveryagent.Thecostoftheserviceis€1peritemandiscurrentlyavailableonlyinParis.

LouisAntoinetteisanonlineportalthatcaterstoDIYenthusiastswhowanttosewtheirownclothing.Theretailersendsclientscompletekits—includingthepattern,fabricandhaberdashery—neededtomaketheoutfit.

Applicantsshouldhavethepotentialtodisruptthewaythefashionandretailindustryoperates.

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Upfitisaservicethathelpsconsumerstoselecttherightsizewhenbuyingonline,inturnhelpinge-commerceretailerstoreducereturns.Througha“FindmySize”tagontheretailer’sportal,thecustomercanenterherdatatoenableanalgorithmtocalculatewhattherightsizeis.

Wepopitisanonlinefashionretailerthatspecializesinindependentbrands.

Hivencyisanonlineportalthatputsfashionandapparelcompaniesintouchwithinfluencers.Thelattercanbuildtheirprofileontheportalandasktoreceiveproductsfromcompaniesforfreeinexchangeforgeneratingcontentonsocialmedia,includingInstagram.Thecompaniesgainfromthesocialmediaexposure.

Maintoolembedstechnologyintofashionaccessories.Theirfirstproduct,Classi,isaleathersmartstrapforclassicwatches.

TheChatbotFactoryhelpscompaniestoconnectwithcustomersthroughmessagingappssuchasWhatsApp,FacebookMessengerandKik,inordertodriveabrand’sengagement.

SegundoPisoisane-commercefashionretailerthattargetscustomersbasedintheFrench-speakingCaribbeanandFrenchGuyana.Itoffers48-hourdeliveryserviceandpricesinlinewiththeMetropolitanFrancemarket.

Africkreaisane-commercemarketplacefocusedonfashionapparelmadebyAfrica-basedorAfrica-inspiredfashiondesigners.

Endeerprovidesatechsolutiontolingeriemanufacturersandretailersthatcreates3D-printedandmade-to-measurelingerie.Thecustomerofalingerieretailercanscanherchestwithasmartphone.Endeer’salgorithmcreatesagenerativedesignbasedontheuniqueshapeofthecustomer,andthedesignis3Dprintedandintegratedintheproductionstageofthelingeriecompany.

Adoptrsisanappthathelpsuserstofindtheapplicationsthatsuittheirinterests.Throughanalgorithmdevelopedbythecompany,Adoptrsrecommendsnewappsandshowswhatnewappshavebeendownloadedbyfriends.

Birdycentisanappthatenablesuserstorounduptheirpurchasestothenearesteuroanddepositthechangeinsavingaccountsfrom140banks.

Source:Lookforwardproject.com

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

ImpulsebyVente-Privee.comImpulseisasoon-to-be-launchedacceleratorfromflash-saleswebsiteVente-Privee.com.TheacceleratorwillbelocatedinStationF,astartupcampusthatwillopeninApril2017,inParis.WedescribeStationFinmoredetailelsewhereinthisreport.

Accordingtoitswebsite,Impulseaimsto“tosupportthebestFrenchandEuropeanstartupsinvolvedinimaginingthetoolsoffashionfortomorrowandtheonlineandofflineconsumptionoffashion,bydevelopingthefunctionalities,technologiesandservicesneeded.”

Source:Accelerateur.vente-privee.com

Impulsewillprovideanine-monthsupportprogramtonewcompanies.Theprogramwillenablestartupstoaccess:

• Ateamoffivepeople:Thesestaffworkfulltimeattheacceleratortosupportcompanies.

• Abusinessmentor:Aprofessionalthatwillshareknowledgeonthestartup’sbusinessissues.

• Anelevatorday:Anoccasiontopresentthebusinessideatoacommitteeofinvestors.

• Mutualsupportsessions:Occasionstoshareideaswithotherstartupentrepreneurs.

• Workshops:Sessionsonfinance,legal,technical,commercialandfund-raisingissuesledbysector’sexperts.

• Pitchtrainingsessions:Supportonfundraisingandhowtoattractinvestors.

Vente-Privee.comiscurrentlylookingfor20startupsinfashion,techandretailtojointheprogram.Theflash-salesfirmislookingforcompaniesthataimtoprovidesolutionstooptimizeconsumers’onlineexperienceintheretailfashionsectorandtechnicalinnovationsaimingtodigitalizeandtransformthecustomers’shoppingexperienceinfashion.Toqualifyfortheprogram,companiesshouldhavethefollowingcharacteristics:

• Objective:Startupsshouldaimtogrowtheirrevenueandpossiblyaimforinternationalexpansion.

• Location:ThecompaniesmustbebasedinEurope.

Impulseisanacceleratorthate-commerceflash-salessiteVente-Privee.comisabouttolaunch.

Vente-Privee.comiscurrentlylookingfor20startupsinfashion,techandretailtojointheprogram.

Impulsewillprovideanine-monthsupportprogramtonewcompanies.

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

• Sizeandmaturity:Companiesshouldhaveatleasttwoemployeesand12monthsofactivity.

• Capital:Thepartnersmustholdatleast50.1%ofthesharecapital.

• Theteam:Thecompanyshouldsharethevaluesofambition,humilityandintegrity.

OtherParisAcceleratorsandIncubatorsFurtherexamplesofacceleratorsbasedinParisarelistedbelow.

Figure3.ParisAcceleratorsandIncubators

Source:Paris-tech-guide.com

Name URL BriefDescription

MicrosoftVentures–ParisAccelerator

https://microsoftventures.com/accelerators/paris

MicrosoftVenturesAcceleratorisathree-monthprogramaimedathelpingstartupsbuildtheirproductsandstrengthentheirbusinesses.Theprogramoffersfreetechnical,designandbusinesscoachingfromcompaniessuchasEventbrite,DeezerandCriteo.

L’Accélérateur http://laccelerateur.fr/ L’Accélérateurisathree-monthacceleratorwhichhelpsstartuptogrowbyprovidingawiderangeofsupportsuchasmentorshipandmediaexposure.

LeCamping https://paris.numa.co/startups/ LeCampingisafour-monthaccelerationprogramatNuma,adigitalhubintheheartofParis.LeCampinghelpsstartupsonspecificmatters,fromproductdevelopmenttofinanceandlegalissues.

50Partners http://en.50partners.fr/ 50Partnersisanincubatorfoundedby50ITentrepreneurs,amongwhichFredericMazzella(founderandCEO,Blablacar)andJustinZiegler(founder,PriceMinister),whichprovidesentrepreneurswithfreesupport,services,workspaceandmentorship.Itskeyexpertiseincludesweb,media,mobileandsoftware.Entrepreneursjointhefour-monthprogrambymaking50Partnersastakeholder—upto7%commonshares.

Agoranov http://www.agoranov.com/ Agoranovisapublicincubatorfoundedbyseveralscientificinstitutions,includingtheUniversityPierreandMarieCurie,ParisDauphine,EcoleNormaleSupérieureandParisTech.Ithashelpedcreatemorethan250innovativecompaniesinvariousscientificfieldssuchashealth,biotechnologiesandsecurityservices.

PartechShake http://partechshaker.com/ PartechShakeroffersstartupsofficesinParisinteractionwithglobalcorporatesandrecruitmentadvice.Italsohostsvariouseventsrelatedtodigitalbusiness,technologyandopeninnovation.

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

2. THECONTEXTInthissection,weconsidertheenvironmentforstartups,acceleratorsandincubatorsinParis.

Paris:TheThird-LargestEuropeanStartupHubandCatchingUpParisisthethird-largeststartuphubinEuropebytotalinvestment.DespiteregisteringlowertotalinvestmentandalowernumberofcompaniesthanLondonandBerlin,Parisstartupsattractedanaverageof€106,580infundingpercompanyversusBerlin’s€18,292,accordingtoouranalysisofdatafromStartupHubsEurope.

Figure4.StartupEnvironmentinParisvs.LondonandBerlin:KeyFigures,2014

Indicator Paris London Berlin

TotalInvestment €2.36billion €8.32billion €3.13billion

EmployeeCount 135,866 1.49million 666,187

Revenue N/A €207billion €45.5billion

NumberofCompanies 22,143 276,280 171,112

Source:StartupHubsEurope

WhatMakesParisaTopStartupHubTheFrenchgovernmentandthecityofParisrecognizetheimportanceofcreatingafavorableenvironmentforstartupstogrowthasawaytocreatejobsandboosttheeconomy.

ThecityofParisrunsaseriesofinitiativesaimedathelpingstartupstogrow.TheseincludeParisFinancePlus,whichgivesfinancialsupporttonewcompaniesthatfollowcertainsocialandenvironmentalcriteria;RéseauEntreprendreParisandParisInitiativeAmorçage,whichsupportswithgrantsthosestartupswithstronggrowthandinnovationpotential;andADIEParisInitiativeEntreprendre,whichhelpsnewcompaniestoaccesscredit.

Source:paris.fr

Pariscompaniesattracted€106,580infundingpercapitaversusBerlin’s€18,292percapita.

ThecityofParisrunsaseriesofinitiativesaimedathelpingstartupstogrow.

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

PublicandprivateinvestmentshavebeenincreasinginabidtohelpParistocatchupwithotherEuropeanstartuphubssuchasLondonandBerlin.Privateinvestorshaveraised€200milliontobuildStationF,a35,000-square-meterstartupcampus—theworld’slargestsuchcampus—expectedtoattract1,000domesticandforeigntechnologycompaniestotheFrenchcapital.

StationFispartofanurbanregenerationprojectwhichreceived€70millioninfundingbythecity’sauthorities.HalleFreyssinet—thebuildinginwhichthestartupincubatorislocated—wasusedbythestaterailwaycompanyasaloadingdock.ThestartupcampusisexpectedtoopenonApril1,2017.ImpulsebyVente-Privee.com,profiledearlier,willbebasedinthecampus.

Source:Stationf.co

Theeffortsofbothpublicandprivateinvestorsappeartobestartingtoproduceresults.Frenchinvestmentintechstartupsroseby84%betweenthethirdquarterof2015andthethirdquarterof2016,accordingtotheresearchfirmCBInsight.ThevastmajorityoftheseinvestmentswereinParis-basedcompanies.ThestronggrowthininvestmentflowishelpingtheFrenchcapitaltocatchupwithLondon.

Figure5.TotalInvestmentsinTechStartups(EURMil.)

Source:CBInsight

417

768802 824

641

414

3Q15 3Q16France UK Germany

Frenchinvestmentintechstartupsroseby84%between3Q2015and3Q2016.

Privateinvestorshaveraised€200milliontobuildStationF,a35,000squaremetersstartupcampus.

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

HowParisCompareswithOtherStartupHubsInordertobetterunderstandwhichcharacteristicsmakeParisoneofthetopstartupecosystemsglobally,weconsideredtwoindexes—oneglobalandoneregional—whichrankstartuphubsaccordingtospecificindicators:the2015GlobalStartupEcosystemRankingandtheEuropeanDigitalCityIndex2016.

ParisRanks11thinthe2015GlobalStartupEcosystemRankingParisisthe11th-bestecosystemforstartupsglobally,accordingtothe2015GlobalStartupEcosystemRankingcompiledbyCompass,aSanFrancisco-basedonline-analyticscompany.Theindexranksstartuphubsonfivecriteria:

1) Performanceofthefundinginvestedinthestartups

2) VCfundingandthetimeittakestoraisecapital

3) Talentavailability

4) Marketreach

5) Startupexperience,suchasmentorshipbyveteranstartupfounders

Thecriteriaisbasedoninsightscollatedfromdifferentsources,includingsurveysandinterviewswithstartupsandentrepreneurs.TheindexdoesnotcoverChina,SouthKoreaorJapan.Intermsofspecificindicators,Parisperformswellinmarketreach,butlagsotherhubsintalent.

Marketreach:WithaGDPof$715billion(€647billion),Paris’smetropolitaneconomyisoneofthelargestinEurope,andsignificantlyabovetheEuropeanaverageof$300billion(€271million),accordingtoCompass.Otherthanthecity’seconomy,theUS,FranceandChinaarethetoptargetmarketsforParis-basedstartups.

Talent:Parislagsotherstartuphubsinitsabilitytoattracttalent.Stringentemploymentlawsmakethecityoneofthemostdifficultplacestohireemployeescomparedtootherhubs.Ittakes54daystohireanengineerinParis.ThiscompareswiththeEuropeanaverageof47days.Moreover,withonly22%ofstartupemployeescomingfromoutsideFrance,theParissceneislessdiversethanintherestofEurope,wheretheregionalaverageis35%offoreignemployeesworkinginstartups.

Figure6.2015GlobalStartupEcosystemRanking:ParisRankingforEachIndicator

Indicator Ranking

MarketReach 6/20

Performance 13/20

Funding 13/20

StartupExperience 15/20

Talent 16/20

Note:Rankingisoutof20,with1/20thebestresultand20/20theworstresult.Source:2015GlobalStartupEcosystemRanking

Parisisthe11th-bestecosystemforstartupsglobally.

Paris’smetropolitaneconomyisoneofthelargestinEurope.

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

ParisRanks5thintheEuropeanDigitalCityIndex2016TheEuropeanDigitalCityIndex2016ranks60Europeancitiesbasedonhowwelltheysupportdigitalentrepreneurs.ItiscompiledbyNesta,aUKinnovationandinvestmentcharity.Therankingsarebasedonindicatorssuchasavailabilityoffinancingandskilledworkers,andqualityofsupportinginfrastructureandnetworks.In2016,Parisranked5th.

Knowledgespillovers:Paristakesthetopspotinthisindicator.Thecityishometotopuniversitiesandresearchinstitutions,andrankshighintermsofR&Dexpenditure.

Accesstocapital:ParisranksasatopstartuphubinEuropeforbothearly-stagefundingandcrowdfunding.Paris-basedtechstartupsraisedalmostdoublethecapitalraisedbyBerlin-basedstartupsandnotmuchlessthanLondonstartups,asfigure5aboveshows.

Non-digitalinfrastructure:Goodairportandtrainconnectivitycontributetotheresultinthisindicator.

Businessenvironment:Thecityperformsrelativelypoorlyinfactorssuchascostofofficespaceandeaseofdoingbusiness.FrancetendstohavehighertaxesandbureaucracythanotherEuropeancountries.Moreover,Englishisnotwidelyspoken,remoteworkisstillnotpopularandthecostoflivingisrelativelyhighwhencomparedtootherlargeEuropeancities.

Figure7.EuropeanDigitalCityIndex2016:ParisRankingforEachIndicator

Indicator Ranking

KnowledgeSpillovers 1/60

AccesstoCapital 2/60

Non-digitalInfrastructure 6/60

DigitalInfrastructure 7/60

EntrepreneurialCulture 16/60

Mentoring 21/60

Market 27/60

Skills 27/60

Lifestyle 50/60

BusinessEnvironment 58/60

Note:Rankingisoutof60,with1/60thebestresultand60/60theworstresult.Source:Nesta

ParisranksasatopstartuphubinEuropeforbothearly-stagefundingandcrowdfunding.

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

KeyTakeawaysParisisaleadingstartuphubgloballyandoneofthetopEuropeancentersforstartupdevelopment.Parisisthethird-largestEuropeanstartuphubafterLondonandBerlinbytotalinvestmentattracted.Thecityranks11thinCompass’s2015GlobalStartupEcosystemRankingand5thinNesta’sEuropeanDigitalCityIndex2016.

InvestmentsinFrenchtechstartupsroseby84%between2015and2016,accordingtotheresearchfirmCBInsight.ThemainfactorsthatmakeParisoneoftheleadingstartuphubsinclude:

• Knowledgespillovers:Thecityishometotopuniversitiesandresearchinstitutions,andrankshighintermsofR&Dexpenditure.

• Accesstocapital:Paris-basedtechstartupsperformwellinaccesstoearly-stagefundingandcrowdfunding

• Marketreach:Paris’smetropolitaneconomyisoneofthelargestinEuropeandsignificantlyabovetheEuropeanaverage.

TheabilitytoattractandretaintalentandthebusinessenvironmentarefactorsthatdragonParis’scompetitivenessasastartuphub.Stringentemploymentlawsmakethecityoneofthemostdifficultplacestohireemployees.Thecityperformsrelativelypoorlyinfactorssuchascostofofficespaceandeaseofdoingbusiness.

TheabilitytoattractandretaintalentandthebusinessenvironmentarefactorsthatplayagainstParis’scompetitivenessasastartuphub.

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February14,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comFilippoBattainiResearchAssociate

HongKong:8thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223004406London:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NewYork:1359Broadway,9thFloorNewYork,NY10018Tel:6468397017

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