France Digitale’s French Tech Barometer quantifies startup growth in France

Jun 12, 2014
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At their annual event this week in Paris, France Digitale released, alongside Ernst & Young, their annual report on the state of the startup ecosystem in France. The third edition of the report (here’s my analysis of the first & second editions) measures four categories: Growth, Employees, Public Aid, and Equity Distribution.

In the Growth category, annual revenues grew 43% from 2012-2013, which is up 3% from the 2011-2012 growth. The total revenue among 116 startups was €2.27 Billion, of which 39% came from outside of France. As compared to previous years’ figures, the total revenue and international revenue have shrunk; however, this may be due to the fact that Criteo is likely no longer included in this list, a company which produces a large percentage of its revenue outside of France.

On the Support side, one interesting takeaway was that the “JEI” status – a status which France Digitale itself fought to defend in previous years – was only used by 54% of surveyed startups. The status provides tax breaks on early employee salaries, and has recently been extended beyond engineers to all employee profiles. On the other hand, 77% of startups said they took advantage of CIR, a tax credit for R&D. Simiarly, while 75% of startups said they used the 2013 tax credit for encouraging competitiveness and jobs (CICE), only 17% said they used the “Innovation Tax Credit,” (CII) launched by Hollande earlier this year.

Job creation in startups is up 22% between 2012 & 2013 ( versus 18% from ’11-’12), with 91% of employees receiving full-time contracts. Interestingly enough, the average employees per company has shrunk from 80 to 65, though, once again, this may be due to smaller companies entering the study, and larger companies, notably Criteo, going public.

The study found that 94% of entrepreneurs are male. Can you say Women in Tech?

On a lighter note, the study found that 90% of startups are using equity/stock options to motivate employees, mostly BSPCE (stock options, but more fiscally advantageous), as well as BSA & Free shares. Despite sharing equity with employees, the study found that on average 54% of equity was held by investors – not as bad as one might have thought, especially given that 30% of employees have some sort of stock/equity incentive.