France sows Germany
Thus, the strong growth of France allows him, finally, to double Germany. As the French ecosystem continues to grow, that of the Germanic neighbor reaches a ceiling. In terms of value, the growth over one semester is only 4% for Germany, against 43% for France and 75% for the United Kingdom. The amounts raised across the Rhine thus represent 56% of the funds raised last year, which indicates that Germany will probably not be much better in 2019 than in 2018. On the contrary, the United Kingdom has already raised in six month 72% of the total of 2018, and France is at 77%.
The Hexagon now seems to become a solid number two in Europe. Its ecosystem is deeper: the overall number of operations – 387 operations in France (+ 18%) against 214 in Germany (-20%) attests. In addition, the French Tech is starting to realize mega-lifes of more than 100 million euros at a faster pace. There were five this semester, the same number as in Germany: 205 million Meero, 150 million Doctolib, 110 million ManoMano and Ynsect, and 100 million HR Path.
On the other hand, none of the French mega-levées clings to the European top 10.
(source: EY)
"The strength of Germany, which does not yet have France, is its capacity to realize mega-deals very important, like the 440 million euros of GetYourGuide and the 272 million euros of the fintech N26. But its ecosystem is globally less dynamic, "decrypts Franck Sebag, partner at EY.
The margin of progress of France vis-à-vis Germany is therefore strong because the two countries are not at the same level of maturity. "The half-billion-euro towers are usually a "phase 2", they come after one or more mega-lifts of more than 100 million. France still lives phase 1"This is reflected in the figures: in value, the 5 mega-French levies of the semester weigh 675 million euros, against 1.13 billion euros for the 5 mega-levées German. less!
France hardly keeps pace with the United Kingdom
But if Germany is slowing down and is now a good third, the French performance is not unique in Europe. The United Kingdom has experienced twice-yearly growth even more spectacular than that of France. In other words: the exceptional French semester does not allow him to catch up with the powerful English neighbor, but to barely keep pace.
(source: EY) In our own barometer, published in July, we have 5 mega-lifes for France and not 4 like EY, which has ruled out the EUR 100 million raise from HR Path in April, due to the age of the company, created in 2001. La Tribune considers that its hyper-growth, its use of risk capital to raise funds, its technology and its economic model justify its inclusion in the calculation).
Indeed, with 5.29 billion euros raised in six months, the UK alone accounts for half of the European investment in the semester, which reach the record amount of 10.55 billion euros. The growth of the English market on the two key indicators (amounts raised and number of transactions) remains much higher than France.
"We must not forget that the United Kingdom had experienced an abnormal stagnation of venture capital investments in the second half of 2019, a nuance of Franck Sebag, at the time, which had been interpreted as a wait-and-see attitude towards Brexit, which was to be held on March 31, 2019. Since we know since the beginning of the year that it will finally be on October 31, there was in the first half of 2019 a catch-up effect that distorts the performance a little , even if it remains undeniable, "adds the analyst.
Outings, the key to English success
For Franck Sebag, the main key to reading the success of England lies in the very good performance of the exit market, that is to say, mergers / acquisitions and IPOs. "The number of outings in the United Kingdom, of which more than 15 billion are in excess of 1 billion euros in 2018, is incommensurate in Europe", says the specialist.
Indeed,worth of releases in Europe reached $ 107 billion in 2018 (about 97 billion euros), including 40 billion euros (about 36 billion euros) for the UK alone, according to a Dealroom report for Tech Nation, the British equivalent of Mission French Tech. By way of comparison, this figure only reaches nearly 6 billion dollars for Germany and about 5.5 billion for France.
"The fruit of exits in the UK makes it possible to return the money to the funds, which finally realize their return on investment. This is a good argument for continuing to invest", describes Franck Sebag.
This is precisely what is missing in France: the market for IPOs (IPOs) was low in 2018, and very few M & A transactions exceeded one billion euros. Blame it on a weak stock market, with Euronext still far from being as attractive as the US Nasdaq. The absence of global technology leaders comparable to the Gafa, which is boosting the M & A market in the United States, is also regrettable, as is the shyness of large groups.
(source: Dealroom)
Good news: the fact that the UK continues to accelerate at this speed, allows Franck Sebag to believe that the "peak" of French technology is still far. "Contrary to what we can hear, there is not too much money. As the number of outflows increases, investment funds can receive dividends to reinvest. It's a virtuous circle that has not yet experienced a cost stop over the last ten years, all over the world".
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