SOCIAL AND ECONOMIC PERFORMANCE OF FRENCH DIGITAL STARTUPS - BAROMETER 2021 - EY
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
SOCIAL AND ECONOMIC
PERFORMANCE OF FRENCH
DIGITAL STARTUPS
BAROMETER 2021
Editorial 3 1. Methodology 5 2. Executive summary 9 3. Key figures 1. French digital startups show resilience 12 2. Talents remain the key of growth 18 3. A supportive French ecosystem 25 4. Future challenges and opportunities 31 Acknowledgments 37
Editorial
FOR THE 10TH EDITION OF THE BAROMETER, 780 STARTUPS ANSWERED TO THE SURVEY.
BELOW ARE THE KEY MESSAGES OF THIS EDITION:
French digital startups show resilience Talents remain the key of growth
Despite the covid-19 crisis, french digital startups had continued to grow in 2020 In 2020, the number of talents working in digital startups grew by 13% reaching
recording almost €7BN of revenue. Their global revenue increased by 15% compared 42,137 employees. Recruitment is crucial for French startups to grow and remains
to 2019 and this growth is even higher if we exclude the TOP 3 (+19%). The proportion an important focus area for CEOs. In 2020, 4,897 jobs were created by the
of revenue generated abroad slightly increased compared to last edition with 36% of respondents to our barometer. Among these recruitments, 77% were located in
revenue generated abroad (vs. 34%). France.
Startups have also pursued their fundraisings as 35% of respondents considered In this edition, parity seems to have improved with 43% women employees
covid-19 crisis had no impact. The average amount raised since their creation as of (vs. 36% in previous edition) but only 11% of respondents CEOs are women
2020 is €18,4M. Fundraising use is firstly to invest in product/tech (40% of respondents) (vs. 10%).
followed by sales & marketing purpose (24% of respondents).
For 2021, the challenges of recruitment are focused on two profiles: the most
In this context, 29% of respondents are backed by international investors and it reaches wanted are the sales/marketing/customer success and the most difficult to find is
60% for startups generating between revenue above €20 million. clearly the programmer/developer (according to 61% of respondents).
However, startups still need to find resources to continue to grow. 21% said to be As we could imagine, pandemic changed the practices for remote working which
engaged to take a loan within the next 12 months and 29% are probably considering it. frequency became regular for 33% of startups and customised for 36% of them.
3
Editorial
A supportive French ecosystem
French tax incentives have proven to be largely used by French digital startups for According to respondents, the main barriers for development are firstly the difficulty
several edition of the barometer. The proportion is growing each year. In 2021 edition, to recruit talent (for 64% of the respondents), secondly to contract with large
77% (vs. 60%) of participants use research tax credit, 64% (vs. 50%) use innovation tax companies (49%), thirdly to cost of work (36%) as well as closing VC fundraising
credit and 46% (vs. 42%) obtained the "Young Innovative Company" label. (33%).
These aids are mainly addressed to startups of revenue between €0 and €5m.
Despite all these struggles, startups have faith in the future. A major part of them
In 2020, 13% of participants have suffered from cyberattacks (vs. 8% in 2019) and 15% expects a revenue growth between 26% and 50% for year 2021. For young startups
have implemented new cybersecurity protocols since the beginning of the pandemic. cash runway is assessed to 12 months at best, whereas for companies generating
This threat can also be a great opportunity for the French startups to seize. more than €50M of revenue, cash runway should last for 2 years.
Data centers are located in France or in the EU exclusively for 77% of respondents. Following the hard waves of the pandemic, French digital startups have shown great
Only 29% of respondents use public cloud to host their IT servers. resistance and agility. Still, challenges will keep coming. To take advantage of them,
opportunities have to be seized. Exciting year to come!
Future challenges and opportunities
French digital startups do not benefit from public procurements opportunities.
According to 79% of the respondents, public procurements represent only 0 to 25%
of their revenue. However, 55% of them would like to resort more to it. The main
reasons for not responding to public tenders are the long and complex procedure
(34%) followed by the feeling that public tender's criteria is not adapted to startups
(30%).
Clara Franck
Regarding GAFAM, 73% of startups feel a dependency towards them including 43% AUDRY SEBAG
feeling very dependent, thinking "I couldn't grow without them". Another challenge
Partner, Cap Horn Invest Partner, EY & Associés
but also opportunity for French digital startups for the coming years not to be France Digitale Board Member France Digitale Advisory Board
overlooked. clara@caphorn.vc franck.sebag@fr.ey.com
@clara_audry @frsebag
4
Methodology
METHODOLOGY
The barometer is based on startups fulfillin
The barometer is based on startups fulfilling
the following criteria:
Head office based in France
Not
Head office based in France
listed or listed for less than 5 years
Not listed or listed for less
Industry than
linked to 5 years
the digital sector
Keydigital
Industry linked to the figures sector
from financial data 2019 & 2020
Key figures from financial data 2020 & 2019
Resulting in:
Resulting in: 780 participants (502 participants in 2020)
780 participants (502
Average age: 6 years
participants in 2020)
(6 years in 2020)
Average age: 6 years (6 years in 2020)
EY is implicated as a third-party to consoli
and ensure that the individual information
EY is implicated as a third-party to consolidate
the data and ensure that the individual information
is kept confidential.
6
METHODOLOGY
Respondents by region and age
E Respondents by region E Respondents by age
Sample of 780 startups Sample of 780 startups
63%
+ 5 years
2% 52%
1%
Normandie Hauts-de-France From 2 to 5 years
2%
44%
Grand-Est
-1 year
Île-de-France 1%
4%
3
%
Bourgogne-
Franche-Comté
Bretagne
0%
2%
Centre-Val de Loire
Pays-de-la-Loire 10%
Auvergne-
8% Rhônes-Alpes
4%
Nouvelle-Aquitaine
Provence-Alpes-
Côte d'Azur
4% 0%
Corse
Occitanie
7
METHODOLOGY
Respondents industries and business model
E Business Model E Industry
Sample of 725 startups Sample of 780 startups
13% 58%
SaaS and Subscription
Other Data/Tech/Cloud 14%
based models
Medtech/Biotech/E-health 13%
9%
Communication/Marketing/Adtech 8%
Hardware
Bank/Insurance/Finance 6%
20%
Marketplace and
Retail 6%
transaction based 1%
models Edtech/Learning 5%
Industry
Electronics/Semiconductor/Robotic 5%
E Primary customer audience Energy/Environment 5%
Sample of 780 startups
18%
Transportation/logistic 4%
43%
Other Corporates HR Tech 4%
(mid cap and large cap)
Information technology 4%
20%
Small and medium Corporate services (Accounting, Legal, HR) 2%
business (PME)
Other industry 29%
4%
Public sector
22%
Customers
8
Executive summary
EXECUTIVE SUMMARY
FRENCH DIGITAL STARTUPS TALENTS REMAIN THE KEY OF GROWTH
SHOW RESILIENCE
E +13% of growth of number of employees between 2019 and 2020
E +15% of revenues between 2019 and 2020
E 4,897 jobs were created by respondents in 2020
E 36% of revenues are generated out of France in 2020
E 23% of startups hired abroad in 2020
E €18.4M of average fund raised since the creation
E 12% of founders are women
E 29% of startups are backed by international investors
E The most important profiles to recruit in 2021 remain the sales/
E 84% of startups are VC backed marketing/CS as well as the most difficult profiles to recruit are the
E 27% of respondents had positive EBITDA in 2020 programmer/developer
(vs. 23% in 2019) E 69% of startups have regular or customised remote working practices
A SUPPORTIVE FRENCH ECOSYSTEM FUTURE CHALLENGES AND OPPORTUNITIES
E 77% of startups use research tax credit in 2020
E For 79% of startups, public procurements represent between 0 and
E 13% of startups suffered from cyber attacks in 2020 25% of their revenue
E 38% of IT servers are hosted on private cloud E 55% of respondents would like to resort more to public procurement
E 44% of cloud providers are headquartered in France E 73% of startups feel dependent to GAFAM
E 77% of respondents have their data stored in France E 35% of respondents consider recruiting talents as the first barrier for
E 80% of respondents consider the dynamism of the ecosystem development
is at least productive E 50% of startups will consider or have engaged taking a loan within
E 34% of startups consider their activity was strongly impacted by the next 12 months
the covid-19 crisis
10Key figures
3.1
French digital startups
show resilience
123.1 FRENCH DIGITAL STARTUPS SHOW RESILIENCE
E Total revenues (in M€) E Percentage of revenue made abroad,
Sample of 657 startups by revenue segment
Sample of 414 startups
6,926
6,011
15%
0 to 5 M€
14%
+15%
28%
5 to 20 M€
26%
39%
20 to 50 M€
45%
2019 2020
34%
+ 50 M€
40%
+2TOP 3
%
+15%
2021 Edition
+19 %
2021 Edition
2019 2020
Excluding TOP 3
133.1 FRENCH DIGITAL STARTUPS SHOW RESILIENCE
E Growth of revenue by geographical area E Revenues generated abroad by revenue segment
Sample of 414 startups Sample of 414 startups
15%
757 0 to 5 M€
20% 15%
+23%
598
18% 635
16%
447 +24% 27%
14% 5 to 20 M€
26%
2,484 39%
+23%
2,235 64 %
20 to 50 M€
68% 45%
34%
+ 50 M€
2019 2020 40%
36 %
France Europe (exc. France) 2019 2020
International (exc.Europe)
of revenue generated
out of France
143.1 FRENCH DIGITAL STARTUPS SHOW RESILIENCE
E EBIT in profit E EBIT in profit by revenue segment
Sample of 528 participants Sample of 528 participants
77%
73%
47%
37%
28% 30% 30%
27% 26% 26%
23%
21%
2019 2020 0 to 5 M€ 5 to 20 M€ 20 to 50 M€ +50 M€
Profit Loss 2019 2020
153.1 FRENCH DIGITAL STARTUPS SHOW RESILIENCE
E Average of funds raised since the creation (in M€) E Percentage of startups backed by international
by revenue segment investors by revenue segment
Sample of 492 startups Sample of 531 startups
113
0 to 5 M€ 25%
98
5 to 20 M€ 29%
20 to 50 M€ 60%
+ 50 M€ 58%
29
22
29%
6 9
0 to 5 M€ 5 to 50 M€ +50 M€ of startups in average
are backed by
international
Average 2019 Average 2020 investors
€18,4M
is the average amount
of fund raised since
the creation as of 2020
163.1 FRENCH DIGITAL STARTUPS SHOW RESILIENCE
E Last round of fundraising E Main fundraising goals E Type of investors in capital
Sample of 707 participants Sample of 154 participants Sample of 761 startups
Product/Tech Venture Capitalist
40
%
84%
Sales & Marketing Business Angel
24% 48%
International Development Corporate Venture
Serie D 16% 18%
6% and above
Recruitment None
Serie C 6% 14% 6%
Other
16%
6%
Serie B
36% 84%
of startups are
backed by VCs
Serie A
36%
Seed
173.2
Talents remain the key
of growth3.2 TALENTS REMAIN THE KEY OF GROWTH
E Growth of employees E Segmentation of employees by geographical area
Sample of 691 participants Sample of 632 startups
42,137
37,240
4,897
jobs created
in 2020
+13%
77%
hired in France
23%
hired abroad
2019 2020
Top 10
respondents created
1,667
jobs in 2020
193.2 TALENTS REMAIN THE KEY OF GROWTH
E 2020 recruitments by region
84%
4 136 Sample of 632 startups
of recruitment in 2020
were located in
Ile-de-France.
69 -38
Normandie Hauts-de-France
51
Grand-Est
Île-de-France
122 0
Bretagne Centre-Val de Loire
0
43 Bourgogne-
Franche-Comté
Pays-de-la-Loire
158
Auvergne-
Rhônes-Alpes
22
212
Nouvelle-Aquitaine
Provence-Alpes-
Côte d'Azur
122 0
Corse
Occitanie
203.2 TALENTS REMAIN THE KEY OF GROWTH
E Type of work contracts E Part of women employees in 2020
Sample of 151 participants Sample of 151 participants
Women Men 43%
Women
Permanent contract
("CDI") 89% 91%
57%
Temporary contract Men
("CDD" and "interim") 3% 2%
Apprenticeship
professional contracts 4% 3%
Among a sample of
Internship 4% 4% 8,252
employees
3,576
are women
43%
of the population
+7
pts
vs.36%
Edition 2020
213.2 TALENTS REMAIN THE KEY OF GROWTH
E Average age of CEOs E Percentage of CEO gender by revenue segment
Sample of 168 startups Sample of 172 startups
Women Men
41,6years old
is the CEO 0-5 M€ 13% 88
87%%
average age
5-20 M€ 6% 94%
20-50 M€ 13% 87%
+50 M€ 0% 100
%
E Founders gender E Women Chief Executive Officer
Sample of 171 startups Sample of 172 startups
12%
88%
Women
11%
Men
2021 Edition 10%
2020 Edition
7% 9%
2018 Edition
2019 Edition
223.2 TALENTS REMAIN THE KEY OF GROWTH
E Most important profiles to recruit in 2021 E Most difficult profiles to recruit in 2021
Sample of 171 startups Sample of 171 startups
Sales/Marketing/Customer Success Programmer/Developer
48
%
61%
Programmer/Developer Sales/Marketing/Customer Success
35
%
26%
Data science / Business Intelligence Data science / Business Intelligence
6% 7%
Professional services / Customer support Professional services / Customer support
4%
3%
Other Other
7
%
3%
61%
of startups consider the most
difficult profiles to recruit
are programmer/developer
vs. 45% in 2020 edition
233.2 TALENTS REMAIN THE KEY OF GROWTH
E Remote working frequency
Sample of 169 startups
Before the pandemic Since the pandemic
15% Never 1%
64% Occasionally (1-2 days a week) 18%
6% Regularly (3-4 days a week) 33%
9% Customised 36%
243.3
A supportive French
ecosystem3.3 A SUPPORTIVE FRENCH ECOSYSTEM
E Use of French tax incentive mecanism E Use of French tax incentive mecanism
Sample of 128 startups by revenue segment
Sample of 128 startups
86% 86%
73%
69% 59%
52%
38%
57%
48% 14% 14%
34%
Young innovative Book innovation Book research 0-5 M€ 5-50 M€ +50 M€
company (JEI) label tax credit (CII) tax credit
(CIR)
Young Innovative company (JEI) label
Book innovation tax credit (CII)
Book research tax credit (CIR)
263.3 A SUPPORTIVE FRENCH ECOSYSTEM
E Percentage of share capital held by investors E Percentage of employees holding equity instruments
by revenue segment by revenue segment
Sample of 520 startups Sample of 101 startups
68%
51%
48%
45%
38% 38%
35% 35% 36%
34%
27%
25%
23% 22% 21%
18% 18%
15%
12% 12% 12%
10%
6%
0%
0-5 M€ 5-50 M€ +50 M€ 0-5 M€ 5-50 M€ +50 M€
0-25% 26-50% 51-75% 76-100% Stock option Warrant (BSPCE & BSA) Free shares Other
273.3 A SUPPORTIVE FRENCH ECOSYSTEM
E Location where IT servers are hosted E Location of data stored in data centers
Sample of 191 startups Sample of 177 startups
Private cloud
38% In France or in the EU exclusively
77%
Public cloud
29% Internationally (data transfers outside the EU)
15%
Hybrid (on-premise and/or private cloud and/or public cloud)
I don't know
16%
8%
Multi-cloud I don't have data stored in data centers
12% 0%
On-premise
5%
E Cloud provider’s global headquarters location
Sample of 204 participants
44%
32% France
International
44%
(exc. Europe)
of headquarters
located in France
24%
Europe
(exc. France)
283.3 A SUPPORTIVE FRENCH ECOSYSTEM
E Percentage of startups which suffered from cyber E Percentage of startups which implemented new
attacks in 2020 by revenue segment cybersecurity protocols since the beginning of the
Sample of 168 startups pandemic by revenue segment
Sample of 171 startups
88%
63%
50%
42%
22%
9%
0 to 5 M€ 5 to 50 M€ +50 M€ 0 to 5 M€ 5 to 50 M€ +50 M€
13%
in average of startups
suffered from cyber attacks
in 2020 compared to 8%
in 2019
293.3 A SUPPORTIVE FRENCH ECOSYSTEM
E Dynamism of ecosystem in the area you are based in France E COVID-19 impact on activity
Sample of 171 startups Sample of 162 startups
Very productive
46% 18%
80%
5
Productive
34%
of respondents consider 16%
Correct the dynamism of the 4
16% ecosystem is at least
productive
Low
20% 27%
Very low
1% 3
13%
2
19%
1
8% 0
5: strongly impacted
0: not impacted
303.4 Future challenges and opportunities
3.4 FUTURE CHALLENGES AND OPPORTUNITIES
E Percentage of revenues coming from E What prevents startups from responding
public procurements to public tenders?
Sample of 170 startups Sample of 146 startups
0 to 25% Procedure excessively long and complicated
79% 34%
Public tenders' criteria not adapted to startups
26 to 50%
(eg. need to produce x certified accounts)
13%
30%
51 to 75% Lack of information on public tenders
8% 16%
Extended payment period incompatible with startups
76 to 100%
10%
0%
Costly external advice required to respond to public tenders
5%
Other
5%
E Would you like to resort more to public procurements?
Sample of 168 startups
55%
Yes
45%
No
55%
of startups would
like to resort more to
public procurements
323.4 FUTURE CHALLENGES AND OPPORTUNITIES
E How strongly do startups feel dependent to GAFAM?
Sample of 170 startups
Rather not dependent
Very dependent I resort to GAFAM technologies
I couldn't grow without them but not to develop my core business
43% 30% 19% 8%
Quite dependent Not dependent at all
I use them to develop my business I manage without them
but I have alternatives of my own
73%
of startups feel
a dependency to GAFAM
333.4 FUTURE CHALLENGES AND OPPORTUNITIES
E Top 3 barriers for development
Sample of 184 startups
Difficulties in recruiting talent 35% 14% 15%
Difficulties in contracting with large companies 13% 18% 18%
Cost of work (social charges, ...) 5% 16% 15%
Closing VC fundraising 18% 8% 7%
Complexity of administrative process 4% 10% 6%
Lack of demand/clients 4% 6% 10%
Narrowness of the French market and lack of
a European market with unified regulations
5% 7% 4%
Getting a bank loan 4% 7% 4%
Other 7% 3% 4%
Delay of payment from clients 2% 4% 4%
1st choice 2nd choice 3rd choice
343.4 FUTURE CHALLENGES AND OPPORTUNITIES
E Assessment of current runway E Expected growth of revenue for the year
Sample of 163 startups 2021 by revenue segment
Sample of 169 startups
0 to 5 M€ 23% 37% 22% 7% 10% 0 to 5 M€ 16% 23% 21% 40%
5 to 20 M€ 21% 43% 7% 29% 5 to 20 M€ 13% 50% 19% 19%
20 to 50 M€ 20% 53% 27%
20 to 50 M€ 7% 13% 40% 7% 33%
+50 M€ 25% 50% 25%
+ 50 M€ 33% 67%
0-6 months 1-25%
7-12 months 26-50%
13-18 months 51-100%
19-24 months Above 100%
More than 24 months
353.1 FRENCH DIGITAL STARTUPS SHOW RESILIENCE
E Are you likely to consider taking a loan E Impact of COVID-19 on startups fundraising plans
within the next 12 months? Sample of 168 startups
Sample of 170 startups
Yes, we have already engaged some banks about it We were not planning to fundraise in the last year
21% 26%
Yes, we will probably consider it We focused on alternative sources of funding
29% 8%
I don't know We delayed the fundraise to a later time
14% 31%
No, I don't believe we would qualify although we may be interested No impact so far - we fundraised as planned
5% 35%
No, I would prefer to avoid it giving funding options
13%
No, we don't need additional funding in the short term
19%
50%
of respondents consider
or will take a loan in the
next 12 monts
36Vivien Marianne
CHEZELLE TORDEUX BITKER
Senior Manager Public Affairs Director
EY & Associés marianne@francedigitale.org
vivien.chezelle@fr.ey.com
Valentine Louisa
OGER ROUSSEL
Senior Head of Public Affairs - France
EY & Associés
louisa@francedigitale.org
valentine.oger@fr.ey.comEY | Building a better working world
About EY About France Digitale
EY exists to build a better working world, helping to create long- Founded in 2012, France Digitale is the largest startup
term value for clients, people and society and build trust in the association in Europe. France Digitale brings together
capital markets. the champions of digital entrepreneurship: it gathers
1,800 digital startups with strong growth plans and
Enabled by data and technology, diverse EY teams in over 150 more than 100 investors (venture capitalists and
countries provide trust through assurance and help clients grow, business angles). The association (non-governmental
transform and operate. organization) has a specific DNA, it associates
entrepreneurs and investors to make the ecosystem
Working across assurance, consulting, law, strategy, tax and more conducive to the emergence of new champions.
transactions, EY teams ask better questions to find new answers
for the complex issues facing our world today.
For more information, please visit francedigitale.org.
EY refers to the global organization, and may refer to one or more, of the member
firms of Ernst & Young Global Limited, each of which is a separate legal entity.
Ernst & Young Global Limited, a UK company limited by guarantee, does not provide
services to clients. Information about how EY collects and uses personal data and
a description of the rights individuals have under data protection legislation are
available via ey.com/privacy. EY member firms do not practice law where prohibited
by local laws. For more information about our organization, please visit ey.com.
© 2021 EY & Associés.
All Rights Reserved.
Studio BMC France - 2107BMC203-01.
ED 0921.
In line with EY’s commitment to minimize its impact on the environment, this document has been
printed on paper with a high recycled content.
This material has been prepared for general informational purposes only and it is not intended
to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors
for specific advice.
ey.comYou can also read
