Paris has its own Paypal Mafia: How Exalead spawned dozens of startups

Oct 10, 2013
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It is often said that nearly every company in the Silicon Valley can be traced back to PayPal, either through investment, employment, or the founding team coming from the pre-eBay PayPal team. A bold statement, most recently quantified by Pandodaily in this interactive map, but we quickly see that many of the household startup brands that we have come to love – Facebook, Yelp, Zynga, LinkedIn – can be traced directly back to money earned by the $1.5 Billion eBay acquisition of PayPal, and the payout to founders, investors, and early employees.

1315d5fb735097eae7ced7cf5a1311e9_XE3PMHyNdBecause of how influential PayPal’s acquisition has been in the creation of VC Funds, startups & more in the Silicon Valley, the so-called “PayPal Mafia” (i.e: PayPal founders Max Levchin, Elon Musk & Peter Thiel) and its surrounding network has become a common benchmark by which other ecosystems are measured by. That is to say, for another startup ecosystem – New York City, London, Tel Aviv, Paris – to show just how unified and evolving its ecosystem is, it would need to be able to tie a significant portion of its current startups back to one company, a company with a large enough exit that founders, early employees, and investors are able to feed that money (or skill) back into the ecosystem with a sizeable impact.

The “Exalead Mafia” – 20 startups founded by former Exalead employees.

In Paris, I believe that we can tie enough of the ecosystem back to Exalead, a semantic search startup founded in 2000 which sold for $162 Million in 2010 to Dassault Systèmes. I sat down with former VP of Research & Development at Exalead Florian Douetteau, who began working at the company in 2000 as a late-entry founder, who provided an extensive list of companies that have sprung up out of Exalead in the past few years.

Florian Douetteau is currently co-founder of Dataiku, “the data science platform,” so we can check that off the list right away.

Stupeflix, a video-creation web service whose CTO, François Lagunas, spent 6 years at Exalead as a Scientific Director.

Former Web Marketer for Exalead, Benjamin Bianchet is currently CMO of peer-to-peer payments platform Leetchi, which was recently featured in Wired as France’s top startup.

Nitrogram (Instagram analytics) CTO Stanislas Polu counts an internship as a software engineer at Exalead in his work experience, in addition to an internship at Apple & Oracle.

Algolia, which recently raised $1.5 Million, is cofounded by two former R&D directors at Exalead, Julien Lemoine & Nicolas Dessaigne.

Music learning service Jellynote & Video search & analytics service Veezio aren’t just graduates from Paris’ LeCamping accelerator, they’re also founded by former engineers at Exalead.

Going down the list, OpenDataSoft, MyJobCompany, Bookset, RunOrg, Archivezen, Altirnao, Gumbaya, Nexkap, cogniteev & Spycommerce were all founded by former Exalead employees, and many of them feature semantic search components as the core of their technology. In addition to that plethora of startups, many startups & companies are home to former Exalead employees, now employed by the likes of TapValue, TinyClues, LinkFluence, Aldebaran, Scality, Google, Twitter, Facebook, Rakuten, and many more.

How did Exalead become what it is?

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In trying to understand how Exalead could become this incubator for future entrepreneurs, Florian & I discussed the culture & mission of the company. First, you need to understand that Exalead was started in 2000 by François Bourdoncle & Patrice Bertin, two Computer Science PhDs who are still with Exalead today, and worked on Alta Vista before founding their company.

From the get go, their attitude, for better or for worse, was to build everything in house. This was a bit more necessary back in 2000 than it is today, but it built a “Not Invented Here,” as Florian puts it:

Caught by the NIH ( Not Invented Here) syndrome, they started by building their own programming language and hadoop-like technology stack. To support this large technological program, Exalead hired from 2004 to 2010 a bunch of young, hard-coding engineers, with an R&D team topping at 60 when it was bough by Dassault Systemes for 150M$ in 2010.

With the two founders having spent time in the Silicon Valley in the late 90s, they brought a nascent startup culture to their company, valuing technical skills over politics.

Ultimately though, what bred entrepreneurs in Exalead seems to be the breadth of its vision: they wanted to build the best semantic search technology in the world, and spent 10 years & $30 Million doing so. Today, Exalead still operates as Dassault Systèmes’ semantic search branch, and their office is home to fellow Dassault acquiree, Netvibes.

What does this mean for Paris?

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While Exalead may not be as sizeable as Paypal in terms of exits – don’t worry, Criteo’s $1 Billion+ IPO should size up just fine – what’s interesting is the culture of entrepreneurship that the company bred, as well as the badge of respect that having worked there gets entrepreneurs & engineers today. A Facebook executive recently spoke of one of the above mentioned startups saying, “even if they don’t succeed, we’ll likely hire them just to have their talent working with us on our Graph Search.”

In addition, looking back at the PayPal map, we see that the influence extends beyond the payments sector, and it manifests itself in many ways. I was disappointed to see that two of Exalead’s founders are still there (Update: Patrice Bertin has in fact recently left the company), if only because that means I can’t draw parallels to Elon Musk or Peter Thiel; however, the company’s 60 employees (update: that’s 60 employees pre-acquisition. The company now employs 150 employees) still continue to build & work for new companies, and I think in the coming years, we will be talking about the Exalead mafia in the startup world.

Special thanks to Florian Douetteau, who put together a comprehensive list of employees and their current whereabouts.