An Update on the French VC Ecosystem
Deep Dive into the Earlybird-X Perspective
In September 2023, I joined the Berlin office of Earlybird-X’s investment team to strategically focus on the French market and specifically look at deep tech deals coming out of Paris. As an active teammate, I am excited to cover this dual geography and continue contributing to our European footprint. Here’s an update on the current state of the French tech ecosystem, why it’s an organic fit with the Earlybird-X investment thesis, and a recap of my first few months.
Bonjour, Deep Tech Innovation!
France’s venture capital landscape has undergone a remarkable transformation in recent years, with a particular spotlight on the deep tech sector. President Emmanuel Macron’s pro-entrepreneurial initiatives have played a pivotal role in shaping the nation’s innovation ecosystem and fostering an environment conducive to the growth of startups.
Among these initiatives is “France 2030” a €54 billion national investment plan, aiming to support France’s industrial economy and foster technological transition. By 2030, the French President wants to see 500 deep-tech startups derived from research created annually. The French government has allocated €500 million to support the establishment of these firms by researchers. In addition, the French startup ecosystem is expected to have 100 unicorns — startups valued at over $1 billion by 2025. These political frameworks, built to support innovation, have bolstered the confidence amongst investors, both domestic and international, and fueled the growth of the venture capital ecosystem.
The Role of Academia
Integral to this success story are also the esteemed academic institutes, particularly those within the Paris Saclay cluster, which have become epicenters for innovation. Institutions such as Ecole Polytechnique, renowned for their world-class research, are magnets for top-tier talent, contributing significantly to the growth of deep-tech startups. Collaborations between academia and industry, facilitated by institutions like CNRS (Centre National de la Recherche Scientifique), have become instrumental in bridging the gap between research and commercialization.
The Role of VC
In the realm of deep-tech startups, France has emerged as a hub for innovation, boasting a plethora of companies pushing the boundaries of technology. From rising stars like Mistral in the AI sector to various others in industrial tech, clean energy, and cybersecurity, French deep-tech startups are making significant strides. The venture capital communities, both local and international, have taken notice and the momentum gained is statistically undeniable. In the past year alone, investments in French startups have surged, reaching a total of €15.2 billion.
As venture capitalists increasingly recognize the potential of French deep tech startups, the nation’s ecosystem is positioned for sustained growth. Bolstered by government support, academic brilliance, and a thriving startup culture, France is asserting itself as a formidable player in the global innovation arena.
Earlybird-X and its Ventures in the French Market
The Earlybird-X fund was founded in 2021 and focuses on deep tech start-ups at the (pre-)seed stage in Western Europe. Earlybird-X is part of a family of independently-managed funds at Earlybird. Our underlying investment thesis is our strong belief in the potential of Europe’s deep tech talents, with a particular interest in university spinoffs. Currently, 75% of deep-tech inventions from European universities never make it to the startup stage and we are geared up to change this narrative. Investing out of a € 50 million fund, we invest in 3 focus areas:
- Industrial Tech (Advanced Materials & Production, Robotics & Autonomous Hardware, IoT, Industry 4.0, etc.)
- Intelligent Computing (AI/ML & Data Analytics, AR/VR, Semiconductors & Quantum Computing, Photonics, Low Code/ No-Code, etc.)
- Clean Technologies (Carbon Capture, Biomimicry, E-fuels, E-electricity, Smartgrid, Batteries, etc.)
For the past 2 years, we have been very lucky to invest in more than 10 amazing startups in those respective areas, all of which have great potential to become global leaders.
Mentioning only a few, so far, we have invested in Certivity, offering a B2B Automotive Regtech solution to master regulatory complexity and digitize product integrity for the Industrial Tech vertical. On the Intelligent Computing side, the latest addition to our portfolio is Quantum Diamonds, a next-gen quantum sensing platform for magnetic field sensing that can among others, be used in semiconductor manufacturing.
With our focus on Clean Technologies, we are happy to be among the early investors of Greenlyte Carbon Technologies (GCT), a low-energy direct-air-capture technology with hydrogen as a by-product. The latter also is an example of an Earlybird-X-startup, later backed by our early-stage Digital West fund in a follow-on round, demonstrating the collaborative advantages and funding power of our family of funds.
In September of this year, Earlybird announced their first investment out of the Earlybird-X vehicle in the French Market: Quantum Software start-up ColibriTD. Call it Deep Tech Zeitgeist or as VCs like to put it “momentum,” but the timing for Earlybird-X deep tech activities in France– paired with the evolution of the French tech ecosystem — is spot on.
So how did it all happen? Earlier this year, the Earlybird-X team started talking to founders Hacene Goudjil and Dr. Laurent Guiraud, about their vision to make the usage of quantum computing accessible for everyone. The founding team combined a degree in Physics from the University of Manchester, a Ph.D. in Atomic Physics from Université Pierre et Marie Curie, and an MBA in IT consulting and engineering from ISC Paris, all complemented by an outstanding professional track record. Early on we realized it was a perfect match, especially when they walked us through their rationale to explicitly look for a European investor with a strong understanding of quantum technology and a robust foothold in the German market.
Firstly, by aligning with an investor deeply rooted in the German market, ColibriTD ensures a strong customer base. Germany, a hub for innovative industries, provides a fertile ground for ColibriTD’s solutions, fostering not just financial backing but also a solid foundation for market penetration. The proximity to academia and research is also a key driver. Home to leading academic institutions and research centers, the German market is ideal for facilitating collaborative initiatives and ensuring ColibriTD remains at the forefront of technological advancements.
Choosing an investor with a robust presence in Germany also taps into a network of hardware players, providing ColibriTD with strategic partnerships and avenues for scaling up its operations. Lastly, attracting and retaining top talent is simplified when associated with an investor deeply embedded in the European tech ecosystem, ensuring ColibriTD’s access to top minds driving innovation in the region. In essence, ColibriTD’s choice reflects a holistic approach, strategically positioning itself to leverage both financial and non-financial resources for sustained growth.
ColibriTD has since continued its activities in the German market and has recently been included in Paris-based STATION F’s “Future 40 startups to watch” which signals ColibriTD’s outstanding team and the role that quantum plays in the tech ecosystem, both in France and beyond. We are stoked to be part of their journey and in the future, we intend to pursue similar partnerships within the booming French ecosystem.
Personal Recap: Working with the French Ecosystem at Earlybird-X
So, how do I fit into this developing story? After completing a Bachelor’s degree in French, and calling Paris and Berlin home for many years, I was specifically looking for a position that would allow me to continue exploring both regions, simultaneously. By embarking on a journey as an investor at Earlybird-X, where I work directly with the French ecosystem, I found this exact opportunity. In the whirlwind of my first months, I eagerly attended several business trips, various conferences, and countless side events, many of which were based in Paris and held entirely in French.
Out of the many trips to Paris and events related to our activity in the French market, one of the highlights was my invitation to the French Embassy in Berlin for the event “10 years, 10 awards” to celebrate the 10th anniversary of French Tech hosted jointly by French Tech Berlin, French Tech Munich, and French Tech Düsseldorf. FrenchTech is an official label and support program of the French government to support French startups and companies in their growth and internationalization and build bridges between local and French startup ecosystems. For the event, partners, sponsors, and supporters of the French start-up landscape were invited to the embassy and I have been in close contact with FrenchTech since starting at Earlybird-X.
Reflecting on these first months, from business trips to embassy events, from jury seats to company events, my experience is a testament to the dynamic and multifaceted nature of Earlybird-X’s investment landscape. I am also beyond excited about the major developments in the French tech ecosystem and am confident that German, French, and Pan-European initiatives in VC are the key to unleashing exactly the kind of talent and innovation we are looking for.
Thank you for reading. Please feel free to reach out to me on LinkedIn or to my Earlybird Digital West colleague covering France, Principal Dr. Maresa von Buttlar, to continue the conversation about the French VC Ecosystem. We would love to hear what trends you see in the French and German startup ecosystems, or get to know new companies working in this region of Europe. Merci!
About me: I graduated in Financial Economics from both Goethe University in Frankfurt and in “Économie et Ingénierie Financière” from Université Paris-Dauphine. I was admitted to the joint double-degree program in Paris as part of a select group of French-speaking students. Later on, I graduated from ESCP Business School, completing a Master in Management program across Paris, Lisbon, and London. I am fluent in French, English, Spanish, Hebrew, and German is my native language.
