Investment sentiment in France

How do you see the current investment sentiment in France? How has it changed from your perspective?

Opposite to what people would expect, the investment sentiment in France remain very strong – even with a global economic crisis due to the Covid-19 outbreak and quarantine.

During the last 5 years, the capital-risk industry has grown by more than 25% yearly, with major European investments done in the hexagon. In 2019 €4.8 billions was invested in French startups by VCs, family offices and business angels.

65% of this amount comes from French investors, and only 15% from German speaking countries – which is a non-sense in my opinion. More strategic alliances between French and German investors and in general a better pan-European level of collaboration would improve the development of startups in Europe tremendously.
From some of the biggest investments we can mention, above all, the following top 3 French sectors and companies for fundraising:

• Fintech: Qonto, Lydia, Wynd, Payfit (from €75 to 150M raised for each of them)
• Medtech: Doctolib (€340M), Dynacure, Point Vision
• Saas/Apps: Dashlane (€110M), Meero (€310M), Algoli, Dataiku

However, it is now very tough to predict the next key orientations of the market, we have already started to experience major changes in the investors’ habits. First of all, sectors such as fintech, medtech and distant communication tools are of course high on the agenda of investors. Tourism, retail & travel industries are obviously put aside at the moment, waiting for a better momentum.

Meanwhile, portfolio managements are getting much more precise and verified by most of VC funds. As other parts of Europe or the world. VCs are really looking after improving their startups lives in time of crisis.

Generally speaking though, some of our partners in France think that the capital-risk industry will as a matter of facts deeply evolve during the next years. We could compare this situation to the LBO industry after the internet bubble from 2000 : the industry radically changed its habits to become stronger and less ‘capital-waster’.

Opportunities in Smart Mobility

The focus topic of this year’s startup award series is smart mobility, which might be considered unfortunate during these times with the automotive industry facing big challenges itself. What’s your take on this?

Smart mobility remains very interesting to many investors, even in this time of crisis. Within the automotive industry, we faced many successful stories in a variety of areas, like drones, smart cities, sea transportations for example.

If I solely focus smart mobility, leaving out the automotive industry, we can still name quite a few key investments, like of Bear new space (satellite launchers), Zephyr & Borée (green transportation for merchant boats), Autolib (Electric cars floats), which happened over the last 3 years in this sector .
Considering the automotive sector, OEMs such as Tier1 and Tier 2 manufacturers face a challenging environment in terms of innovation and competition. For those reasons, most of them are still looking for potential innovations, digitalisation and pull the whole start-up ecosystem to develop new products and to find investments.

Before the lockdown, some of the French automotive indicators have already showed some warning signs. Even if Groupe PSA, which is the second largest car manufacturer in Europe, has known its best figures & metrics (after managing to buy Opel, and expecting to merge with Fiat-Chrysler), Renault-Nissan is still facing a strong management crisis due to the “Ghosn case”, but remains at the world top 3 car-seller in terms of volumes.

The French Tier 1 manufacturers have also faced difficulties over the last 2 years, suffering from the US/China trade war: Faurescia divided its market value by two in few weeks.

This situation itself leads major players of the French automotive industry to look out and invest in talented founders and to drive innovations in this sector. There are also incubators and accelerators dedicated to these technologies.

Importance of Smart Mobility

How do you think smart mobility has changed in France over the years?

To understand the importance of mobility in general and the constant need of innovation and development we need to remember some vital traits of the country. Similarly to many other so-called ‘developed countries’, France has seen over the last 50 years a big increase in the number of people living in the urban areas. Over 65% of the people live in a city that has more than 30,000 inhabitants.

Adding to this, France is economically and demographically a very centralised country: one-seventh of the total population is concentrated in the Paris greater area), which represents around 11 million people. Furthermore, the other Top 10 cities represent another one-third of the total population.

On the other hand, France is a ‘cross country’ between the UK, Spain, Italy, Germany, Switzerland and Benelux countries. France also has access to 2 seas, with 5 major ports. This situation creates a huge impact on transportation and logistics in many senses. Last, but not least, there is a great need to develop green and smart mobility and is engaged heavily in reducing CO2 emissions.

These factors alone have led companies and consumers to seek for new ways of living and to be mobile. Answers are multiple and multi-modals: sees, trains, cars, planes, everything has changed even only over the last 10 years.

For all these reasons, I believe France is a very exciting market and, even if new projects take sometimes longer to implement than in other countries, the potential is really high and I’m looking forward to this year’s ‘Invest and Connect’ event very much to introduce to our exclusive event participants our pre-selected and pre-assessed high-quality deal flows!

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