Unicorns: still on the margin

The take-away

  • This year 274 French start-ups attended the Consumer Electronics Show in Las Vegas. Only the US had more.
  • For French entrepreneurs the most promising sectors are life sciences and digital technology.

Thanks to the success of its three unicorns – BlaBlaCar, OVH and Criteo – France has made a name for itself in industries ranging from car sharing and data storage to online retargeting. But the country is still trailing far behind its European neighbours: since 2009, the UK has been home to 20 start-ups valued at more than $1 billion, and Germany nine.

Why this gap? According to Hervé Lebret, an expert on innovation at the École Polytechnique Fédérale de Lausanne (EPFL), the UK enjoys a special advantage. “It’s a magnet for investors because of its language and cultural proximity to the US. Until Brexit, it was the ideal hub for venture-capital firms which often went as far as to ask start-ups to move to London”.

France, moreover, was long hampered by what Lebret describes as “French bashing”. “The international media were constantly emphasising the lack of entrepreneurial freedom, the restrictive labour code and the 35-hour working week,” he says.

The Macron effect

This image may well be reversed. In 2018, 274 French start-ups attended the Consumer Electronics Show in Las Vegas, the leading consumer technology fair. This brought France nearly on par with the US, which was represented by 280 companies. “This surge is due partly to Brexit, which is encouraging companies to move to Paris, and the Macron effect”, says Lebret. “Entrepreneurial initiatives, like the giant Station F incubator, now portray France as attractive for start-ups and investors”. BPI, the semi-public investment bank, invested €1.3 billion in French innovation in 2017.

Typical of the start-ups to have benefited from this wave of capital is Sensome, a company active in the treatment of ischemic strokes (blood clots), a market estimated at several billion dollars. Sensome has developed a sensor that can help doctors choose the most efficient tool for removing the blood clots that form during a stroke, saving time and reducing the risk of post-stroke problems in the brain.

The founder, German-born Franz Bozsak, considered France the ideal place to launch his company because, he says, “Early-stage funding from the state, with no corresponding obligations, is very high. Right from the start we got €200,000 as part of the global innovation competition”. He also cites the support of incubators and mentors, as well as the privileged relationship his company enjoys with École Polytechnique, where he wrote his thesis. “They have all the skills required to develop our product drawing on different disciplines, such as biology, data sciences and micro-electronics”. Not to mention that foreigners consider Paris an attractive place to live.

Sensome may one day be a French unicorn. With 17 employees, the company has raised €4.7 million since its creation in 2014 and has just completed a new round of financing for €4.6 million. Bozsak expects clinical trials on humans to begin later this year, followed by European approval by the end of 2019.

Medtech and digital

Overall, the most promising sectors in terms of developing unicorns are life sciences and digital technology. Respectively, they represent one third and two thirds of the €2.56 billion (up 185% since 2014) raised by French start-ups in 2017. The “Trophies of Future Unicorns”, presented by the French economic magazine Challenges and its partners, have been awarded to three companies in these fields: Doctolib, an application for booking doctors’ appointments; MedDay and its treatment of progressive multiple sclerosis; and Believe, a platform for digital-music distribution for independent artists.