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Paris

Known as the “City of Lights” and not quite as a startup hub yet, Paris is beginning to change its reputation for the better. The government has been at the forefront of supporting the ecosystem, especially at the seed level investment stage, which it does through the public bank Bpifrance, along with offering a combination of tax benefits, subsidies, and loans to the tech community. Moreover, French engineers are among the most talented in the world and the cost of hiring an engineer is very minimal due to the monetary support from the government. Much of France’s tax regimen, while burdensome for startups that exit, is not as draconian as many investors think it is. In the past few years, Paris has seen no shortage of accelerators, such as Le Camping and TheFamily opening their doors to the community. The challenge with French startups is that it is difficult for them to go global because founders have a greater interest to focus domestically. Despite the fact that Paris is a multicultural city, when compared to other startup markets such as London or Berlin, few startups are founded by European expats, widely regarded a necessary ingredient in a successful ecosystem due to their global orientation and greater risk appetite.

In This Market

These businesses offer industry expertise and are a source of startup talent and potential customers. They help fuel the local startup community.

Opportunities

  • French engineers have a global reputation as among the best in the world, all while being very affordable.
  • The government has been very active in terms of funding early stage startups, both through Bpifrance and thru direct grants and subsidies for tech companies.
  • The city of Paris is gorgeous, and has a central location in Western Europe.
  • France, and Europe overall, is beginning to listen more to the needs of startups in the ecosystem and the ecosystem is maturing.
  • Famed entrepreneur Xavier Niel has invested €200 million to convert an unused railroad depot into an incubator for 1,000 startups.
  • Promising verticals include data science and internet of things.

Risk Factors

  • The language preference for business is French, which means that expats who choose to live in Paris must know how to speak French.
  • The tech community does not have many immigrants or expats, especially when compared to London or even Berlin.
  • The exit market in France is very underwhelming, providing a disincentive for companies to scale in Paris, due to the complicated legal and tax procedures that companies experience after an exit.
  • The monetary support for the ecosystem from the government, while helpful in most cases, causes some distortions for the investment market.
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