Today, French startup & venture capital lobbying association France Digitale is holding its annual event France Digitale Day, and has welcomed 300+ of France’s digital elite to discuss the ecosystem – past, present and future. Last year’s event kicked off the launch of France Digitale and was accompanied by an Ernst & Young Study which showed that 100 French startups made over 1 Billion € in revenue in 2011, emphasizing the importance of startups in the French economy. This year saw a follow-up and expansion of the study, which showed figures – some promising, some worrying – about France’s digital ecosystem.
As a note, the Study sampled 125 companies (vs. 108 for the 2011 year), whose average age was 8 years, and who generated on average 4,3M€ annual revenue.
40%: Growth from 2011 to 2012
The first figure is a promising one: startups in France are growing. Between 2011 and 2012, French startups saw average revenue growth of 40%, 1.844 Billion euros in total. What’s more impressive is that companies making below 5 Million euros saw 65% growth, while companies making more than 5 million euros in annual revenue saw 38% growth.
67%: Revenue Generated Outside of Europe
If you’ve done your math, you’ll see that 125 startups brought more than €1.2 Billion in revenue into the French economy from outside Europe. And an additional €340 Million from other European countries.
67%: Late Stage Companies with Foreign Investors
You can see this two ways: on the one hand, late stage (€50M+ annual revenue) companies are getting funding from international investors. On the other hand, this does suggest a lack of late-stage investment in France; however, the problem is known, and you can see an urge amongst investors to facilitate the creation of such a fund, whether that comes from successful European Tech companies like Orange, or from investment funds that bring in bigger funds.
21%: Startups who received an audit from the Government in 2012
Up from 12% in 2011, this one is a bit worrying. Of course, with success comes audits from the government, but it’s also distracting to companies that would rather continue to grow 40% next year than explain how they grew so much this year.
35: Millions of Euros R&D written off
Gotta love that Credit Impôt Recherche (CIR). Startups wrote off and received grants for 35 Million euros on their R&D; however, France Digitale co-President and Elaia Partners Partner Marie Ekeland seemed to think there was room for improvement. That may be because the same startups said they spent €160 Million on R&D overall, leaving more than €100M to pay out.
8005: Total Number of Startup Employees
Up from just under 6500 in 2011, these 125 startups have just under 80 employees on average, 89% of which are full-time employees, and 74% of which came from companies making less than €5 Million in revenue per year
16%: percentage of hires who are straight out of university
Not surprising, but interesting to see it on paper. 84% of hires have previous work experience – you can’t build a great startup out of interns and fresh graduates, I guess.
41%: Capital Held By Founders/Directors
On average, the directors/founders hold less than the majority of their companies: this is fairly normal (especially for late-stage companies), but it’s interesting to remind founders reluctant on giving up equity because they want to grow big that those big companies they want to become are run by people who gave up equity. 59% of it on average.
43/32: Age of Founders/Employees
Founders here refers to directors as well, but it seems that the myth of the young founder doesn’t seem to hold up, as well as for the young startuper. In reality, startups are composed of young and old founders & employees.
83%: CxOs who were Founders
A clear majority of the companies are run by the founders of those companies. Of course, this may change if these companies begin thinking about an IPO or a 10-year strategy, but for companies that are on average 8 years old, to see that the directors were there at the beginning, gives you an idea of how long founders have to be ready to commit to their vision.
I don’t have any information about how this lines up with other countries, but if you have access to accurate data, feel free to add it in the comments or email me at email@example.com and I’ll add it in above for reference.