US investment is increasing in French tech, while more French startups are expanding on US soil.
Back Market’s launch into North America early in 2018 was followed by the refurbished electronics marketplace raising $48m shortly afterwards. The company facilitated $120m in sales in Europe in 2017, and this year those figures are set to double.
In 2015, BIME Analytics was acquired by Zendesk for $45m, and Sigfox, Delair, Shapr, and Criteo are other French startups currently demonstrating expansion success in the US.
Should these trends continue, it’s likely to become a more common business model for globally focused French startups.
RISE OF INTERNATIONAL FRENCH STARTUP
The number of startups in France increased by 30 percent between 2012 and 2015. Around $1.6bn was invested in French tech companies in 2016 alone, a 90 percent increase from 2014, and today there are around 9,400 startups in France.
A record-breaking 361 French companies attended CES, the world’s biggest tech show in 2018, more than doubling the number of 160 three years earlier.
At Eureka Park, the startup hub of the show, France was the second most represented country after the US with 272 French startups exhibiting, up 33 percent from last year.
“The French government has been very aggressive in driving startup growth and it’s certainly paying off,” says Gary Shapiro, president and CEO of the Consumer Technology Association, which produces CES.
“American consumers embrace new technology. We crave it, in fact, and foreign companies can succeed in the US if they understand our consumers, culture, and habits.”
In terms of US venture-capital investment in French companies, the figures, overall, have been growing year over year.
According to Bpifrance, the number of deals with US capital increased from 30 to 48 between 2012 and 2016 and US investment grew from $192m to $586m. There was a drop in 2017, however, to 41 deals amounting to $464m, so results for 2018 will confirm either an anomaly or changing trends.
WHY US INVESTMENT IS INCREASING IN FRENCH STARTUPS
Luca Verre, the founder and CEO of Prophesee, which develops neuromorphic vision systems, believes that the amount and frequency of US investment is increasing in French companies for several reasons.
“The French ecosystem is getting more solid and more visible, and a lot of French companies end up transferring their HQ in the US or at least opening an office in the US after series A or B,” he says.