barometer ey-fd 2015

Social and economic performance of French digital business start-up

Barometer 2015

Summary

1. Methodology

2. Executive summary

3. Key figures

3.1 Revenues

3.2 Fund raising

3.3 Innovation support

3.4 People

3.5 Value-sharing

4. Contacts

Methodology 1

Barometer based on data from digital business start-up financed by venture

capitalists

Survey sent by venture capitalists to companies they invested in

EY as a third-party to consolidate the data and ensure that the figures are kept

confidential

► 171 participants (116 participants in 2013)

► Average age: 6 years (5 years in 2013)

► 3,3 M€ invested by VC (median) versus 4,8 M€

► Key figures from financial data 2013 & 2014

Methodology 1

Executive summary 2

Hyper growth & Born global

+37% of revenues vs 2013

43% of revenues are generated abroad in 2014

25% of respondents have a foreign VC that already invested in the firm

People +30% of employees in one year

92% of permanent contracts

44% of people employed by companies which revenues are from 5 to 50M€

75% of employees have at least a Master Degree

9% of entrepreneurs are women

Innovation support Value sharing 50% of the sample did not use « Young Innovative Company » tax incentive

Research Tax Credit remains the preferred state incentive

Tax controls decreased in 2014

Controls are now more focused on the Research Tax Credit

48% of share capital held by management and employees

93% of start-up use equity instruments

75% of start-up have positiv « EBIT » when reaching 50 M€ of revenues

98% never distributed dividends

Social and economic performance of French digital business start-up

Key Figures 3

Revenues 3.1

Revenues 3.1

0

500

1 000

1 500

2 000

2 500

3 000

3 500

2013 2014

2 913

0%

10%

20%

30%

40%

50%

60%

70%

80%

71%

30%

38%

• Total Revenues (in M€)

2 123

• Growth of total revenues (in%) Analysis by revenue segment

Barometer 2015 — 9 —

0 to 5 M€ 5 to 50 M€ + 50 M€

• Revenues worldwide

• Growth of revenues (in M€)

France Europe International

62% 57%

19% 22%

19% 21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014

1 325 1 662

404

639 393

613

0

500

1 000

1 500

2 000

2 500

3 000

3 500

2013 2014

+25%

+ 57%

Revenues 3.1


Fund raising 3.2

• Average and median of fund raised (in M€)

Analysis by revenue segment

• International VC

4

21

33

2

11

24

0

5

10

15

20

25

30

35

40

0 to 5 M€ 5 to 50 M€ + 50 M€

Average Median

0%

5%

10%

15%

20%

25%

30%

35%

40%

0 to 5 M€ 5 to 50 M€ + 50 M€

38%

Percentage of foreign venture capitalists investing in French digital business start-up. Analysis achieved by revenue segment.

25% 23%

25% of start-ups

are international

VC backed

3.2 Fund raising


Innovation support 3.3

• Did you use the label « Young Innovative Company » (or « JEI » in French)*?

50% Yes

50% No

* Analysis based on a sample of 109 participants in 2015

• Did you use the French research and development tax credit (CIR) ? **

** Analysis based on a sample of 105 participants in 2015



71% Yes

29% No


30% Yes

70% No

19% No

81% Yes

Innovation Tax Credit

(CII in French)

Competitive employ tax credit

(CICE in French)

• Did you use the new tax credits launched in 2014*?




7,6 M€

Received from BPI in 2014

2,1 M€

Received from BPI in 2013

27 Companies

declare receiving

BPI grant in 2014

21 Companies

declare receiving

BPI grant in 2013

• Did you receive BPI France grants* ?




Percentage of start-up that had the Tax administration performing a tax control during the year

15%

15%

16%

16%

17%

17%

18%

18%

2013 2014


17%

16%

• Tax controls in 2014* (in M€)


People 3.4


0

2 000

4 000

6 000

8 000

10 000

12 000

2013 2014

2 232 jobs created

1 476 people hired

in France 756

people hired abroad

• People

7 452

9 684

For every one job created abroad, two jobs are created here in France

People 3.4 People 3.4


92%

4%

2% 2%

Permanent contract (CDI)

Temporary contract (CDD & Interim)

Professional training contract

Internship

7%

18%

69%

6%

High-school diploma or less

Bachelor Degree or less

Master Degree

PhD

• Type of work contracts (2014) • People qualification (2014)

People 3.4 People 3.4 People 3.4


44% 5 to 50

M€

32% + 50 M€

24% 0 to 5

M€

• Segmentation of employees by revenue segment of the digital business start-up



• Average age of staff

0

5

10

15

20

25

30

35

40

45

Average ageManagement

Average ageEmployees

31

40

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

Minimum Average Maximum

0,7

2,3

10,7

0,4

2,3

12,4

• Ratio Management/Staff wages


2013

2014


* Analysis based on a sample of 114 participants in 2015 ** Analysis based on a sample of 97 participants in 2015

39%

4% 10%

46%

Business developers / Marketing

Sales support/Consultants

Data Science / Business Intelligence

IT Developers

88% Will hire in 2015

Looking for**

2015 Edition

• Focus on recruitments for the year 2015*

People 3.4 People 3.4 • Looking for**


73% Consider that IT Developers are the most difficult staff

to recruit

2015 Edition

• Focus on recruitments for the year 2015*




92% Yes

8% No

• Are you both founder and manager of the company ?



51% Yes

49% No

91% Men

9% Women

• Serial entrepreneur • Chief Executive Officer



• Serial entrepreneur


91% are men

40 years old

51% are serial entrepreneurs

94% have at least a

master degree

Value sharing 3.5


• “Earnings before interests and taxes” or EBIT*

• Percentage of positive “EBIT” by revenue segment*

* Sample of 102 start-up

74% Loss

26% Gain

38% 5 to 50

M€

75% + 50 M€

17% 0 to 5

M€

People 3.4 Value sharing 3.5


% of share capital held by external shareholders (VC, Business angels…) % of share capital held by owners and employees

52% 48%

• Percentage of share capital held by owners and employees



93% Yes

7% No

* Analysis based on a sample of 104 start-up in 2015

• Are you using equity instruments to motivate your team*?




72%

11%

17% Warrants(BSPCE)

Free shares(actionsgratuites)

Stock-options&common shares(BSA)

• Types of Equity instruments*



Percentage calculated by doing the ratio between the number of employees owning equity instruments and the total number of employees. First chart presents data globally and the second chart is presented by revenue segment


34% Of staff owning

Equity instruments

2015 Edition

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0 to 5 M€ 5 to 50 M€ + 50 M€

39%

24%

17%

• Percentage of employees owning equity instruments*



2% Yes

98% No

• Did you distribute dividends since the creation of the company ?


Contacts 4


Franck Sebag

Partner, EY VC & IPO Leader France

@frsebag

Xavier Lorphelin

Managing Partner Serena Capital

@Xlorphelin

4 Contacts

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information, please visit www.francedigitale.org.

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barometer ey-fd 2015

Small Business & Entrepreneurship