La French Tech Mission's Future🔮

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La French Tech Mission has been at the heart of the nation's startup ecosystem since it was launched almost 8 years ago. What started as a kind of elaborate marketing exercise to convince the world that France could be a startup hotbed over time has evolved into a wide range of programs to support entrepreneurs by cutting through red tape and pumping hundreds of millions of euros into the ecosystem.

At its heart, the mission is a small but hardy team that for more than 3 years was led by Kat Borlongan. Her tenure saw a remarkable boom in startup funding that drove France into the No. 2 spot, neck-and-neck with the more mature German ecosystem. Borlongan has been a strong advocate for French Tech, and so it was a surprise to many this summer when it was announced that she would be leaving.

Was she a shining star that shone too brightly? There were whispers that she had become too visible for some in Macron's government. La Tribune hinted at some behind-the-scene tension earlier this summer when it broke the news about her departure, writing:

The decision was taken by Cédric O, the current Secretary of State for Digital Transition, who wishes to overhaul the structure. Kat Borlongan's replacement is not yet decided...Officially appointed to this position in May 2018 by Mounir Mahjoubi, then Secretary of State for Digital, her dismissal is signed by the hand of his successor, Cédric O. According to our information, the decision will be formalized on Wednesday evening, at the time of a departure evening as a tribute to be held at the Hôtel des Ministers in Bercy.

More recently, La Tribune again referenced Borlongan as the person O "had ousted in July" from the management of the French Tech Mission. Officially, the French Tech director serves for 3 years and publicly everyone emphasized that Borlongan's term was simply up. No harm, no foul. But there were still some eyebrows raised because a replacement was not announced at the time, just some hints about rolling out a bigger plan in September.

Of course, nothing much happens during the summer months in France business-wise (unless you're in the submarine business!). So as the weeks dragged on and no successor was named, many believed the Macron government would just keep a current FT team member as the interim leader. After all, presidential elections are next Spring. While Macron is currently favored to win re-election based on current polling, France's wacky 2-round electoral system runs the risk of leading to some chaos in the outcome. And if any of the far left or right candidates were to win, it could be an existential moment for the French Tech program.

So it was a bit of a surprise last week when Clara Chappaz, the Chief Business Officer of Vestiaire Collective, was named as the new director of La French Tech Mission. Certainly, she has the bonafides. She's well known and respected by the ecosystem, and Vestiaire has raised 9-figure funding rounds twice this year on its way to achieving the unicorn status that melts the hearts of government officials.

Minister O organized a kind of launch party at Bercy last week to formally introduce Chappaz to a who's-who gathering of entrepreneurial elites. In a recorded video played at the event, President Macron joked (awkwardly) that he couldn't be there because Cedric O "decided to inform me at the last minute. I'm sure to have the exclusivity of this rendezvous. More seriously..." Hopefully, Macron will get some better comedy writers before he hits the stump during the election next year lest we veer into the "Take my wife, please!" territory of one-liners.

Anyhoo, Macron ended his 9-minute video by effusively praising Borlongan:

"I wanted to personally thank you for all the work accomplished, dear Kat. I do not underestimate your commitment. I am also aware of the role you played in this collective adventure and its success. So do all the founders and investors there with you with this evening. It is my wish that you continue to put your talent, your energy and your way of looking at the world at the service of our country. That you continue to invest in France, its image abroad and in all we have left to accomplish for its future. I wish you all the best and I hope to see you soon. Either way, thank you. For these 3 and a half years by our side."

As far I could hear after listening to a replay, Cedric O, during his 22-minute discourse, did not mention Borlongan (if you heard differently, tell me!). Though he did include a reference to David Monteau, the first of 3 French Tech directors.

As for Chappaz, O noted during an interview with Les Echos that she was chosen from more than 50 candidates. Before joining Vestiaire in 2019, Chappaz had attended Essec Business School, got an MBA from Harvard Business School worked at big brands such as Pernod Ricard and Zalora Group, and then founded Lullaby (a marketplace for sustainable kids products) that was based in Beantown (aka Boston).

The French Tech Roadmap

Gossip aside, there were important statements made last week regarding the future ambitions of La French Tech. It's worth remembering that Macron has been a staunch supporter of the program and the nation's entrepreneurs since his days as Economic Minister. He's clearly jazzed by the growth since he became president in 2017, and with an eye toward the next election, he's painted a target on the U.K.'s back.

"Our ambition is simple: We want to be the leading power in tech in Europe," Macron said during his speech. "This challenge still requires a lot of effort, but it is another within our grasp. The U.K. creates twice as many startups per year and the fundraising is higher on average, but we can reach that level and even exceed it...Catching up with the U.K. in terms of the number of startups created and jobs created and the capacity to raise financing is possible thanks to you because you are the ambassadors of our ecosystem."

So the new French Tech motto is, "Suck it, Britannia!" But concretely, how does the French government plan to close the gap?

By doubling down on doubling down, of course. Or, what Cedric O referred to as "massification." (My new favorite French word!). Through various programs such as the French Tech Next40/120 and the Tremplin, La French Tech gives bespoke service to about 200 startups. The plan is to ramp that up to 1,000 in the coming years.

Details TK, of course. That will likely be high on Chappaz's to-do list. But there will be special emphasis on startups in areas such as food, environment, and health, as well as deep tech. This is part of what Macron envisions as a kind of start-up third way that he wants France and Europe to chart between the authoritarian nature of China's economy and the cowboy capitalism of Silicon Valley. Macron has previously stated that he also wants to see 10 European tech giants valued at more than 100 billion dollars by 2030.

Macron wants this to be more than a money-grubbing exercise. "Reconciling growth, social justice, and the environment," Macron said. "These are the central stakes of the 21st century. We can not produce, consume, grow as we've done in the 20th century. We must today consider the consequences in terms of the environment and social justice of our actions...and we must invent a new economic model and society which puts these notions at the heart of its model. It's Europe and not the United States or China that can invent this model."

Cedric O echoed these ideas while praising the gathering of entrepreneurs. He invited folks to reflect back on how far the country had come and to do something that wasn't very French: Applaud themselves. (Which they did!)

"I assure you that we are not at the end of this path," he added. "There will remain an enormous about of work for you to do."

He said it was important to speak "clearly" of the work and finance reforms that the Macron government had adopted despite their controversial nature. "We were persuaded that it would work," he said. "We were persuaded that it must be done. And in the end, what's happening today, is it a validation of this bet? It's only a beginning, I think, of building the prosperity and history and splendor of the France of tomorrow." So, no victory lap but kinda sorta.

He also took a shot at the French, who have a tendency to see the cloud in every silver lining. As the startup ecosystem has boomed, there is also some boiling sense of resentment that maybe it benefits mainly a few Richy Rich kids (ahem, men) who graduated from top schools in Paris. It's important, therefore, that the whole country shares in the startup success through job creation and economic impact.

"There is a tendency in France to give in to jealousy, give in to pessimism, give in to this notion that France is a country in decline," he said. (Cue subtweet of Eric Zemmour...) On one hand, there are entrepreneurs bubbling with enthusiasm, and on the other people who fear greater social inequality.    

"We (the startup ecosystem) must succeed because this country needs hope," he said. "And because yes, there are difficulties. And yes, there are extraordinary challenges. But in the end, we are optimistic and we are French and we are going to find solutions, we are going to work a lot and we can do it together."

So, no pressure for Chappaz. Just grow the ecosystem massively. Overtake the U.K. Build a more just world. And restore hope and prosperity to lift the French people out of despair.

Bonne route!

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In Other News...

France's OVHCloud, one of Europe’s largest cloud providers, filed for an IPO and hopes to score €350 million while reaching a valuation of up to €3.75 billion.

Founded in 1999 by Octave Kalba, the company received key approval from French regulators (Autorité des marchés financiers or AMF for those of you wanting to master French financial bureaucratic lingo). According to public documents filed as part of the offering, the company reported €623 million in revenue in its most recent fiscal year ending August 31, 2021, up 8.9% from the same period one year ago. The company makes 80% of its revenue in Europe, including 52% in France.

The AMF also offered some analysis that could be interpreted quite differently depending on whether you are a glass-half-full or glass-half-empty person. Essentially, the AMF noted that companies in Europe have been much slower to adopt cloud-based technologies compared to the United States where there is not quite the same fetishistic attachment to doing things on paper. This means either OVH has a big opportunity ahead OR it has a lot of work to push the cloud-adoption boulder up a steep hill.

In any case, another IPO filing is welcome news in France where coaxing more public offerings is a priority for the government that wants to see more companies go public in France so more of the benefits remain here. Digital Minister O, during his appearance at France Digitale Day last month, also said he would like to see a tech company join the Paris Stock Market’s CAC 40 (an index of the most important companies) within the next few years.

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