French PropTech

Has French PropTech Benefited from its Push to Become a ‘Start-Up Nation?’

French president Emmanuel Macron has a bit of a love affair with the tech sector. During his first few months in office, he was keen to share his support for all things tech (even posing for his official portrait with not one but two iPhones). He rolled out a number of initiative to encourage his country’s tech sector and began describing France as a “start-up nation.” He spearheaded a giant incubator project in the outskirts of Paris called Station F and has entertained many of the heads of today’s biggest technology companies.

Plus, in September of 2017 he signed a new set of labor law reforms that made firing employees easier and did his best to cut some of the red tape around business that France is known for. While his actions are being questioned and he has seen protests from various affected groups, the verdict is still not out on how these moves will change the country’s competitiveness.

It isn’t just the young president that seems to be looking towards technology for a prosperous future. A recent study showed that the majority of students at French universities were interested in working for a tech start-up after graduation.

But how does this affect the French PropTech landscape? There is obviously a lot of interest in the area. Last year, the property event organizer MIPIM put on their first European PropTech event and the attendance was strong and highly engaged. But this isn’t a great representation of PropTech in France since many of the companies being showcased and attendees themselves were from other regions. So, to find out more we looked to the PropTech research platform Unissu to give us some perspective.

“Despite governmental efforts to vitalize the French startup scene, we have seen a sharp decline in both the number of PropTech companies started and the amount of funding in France,” says Eddie Holmes, co-founder of Unissu. He pulled some numbers from his database and here is what the chart shows as far as the amount of funding goes:

While it may seem a bit dismal, especially when you think of how much effort was put into Macron’s pro-business initiatives, this is actually in line with other countries. The U.K. has a vibrant PropTech startup scene that as of yet does not seem to be hampered by their impending exit from the European Union. They too have a similar slowdown:

Eddie explains that this isn’t necessarily a sign of a slowdown but rather of a maturing industry. “Many of the European PropTech companies have been successful and so there is less space for newcomers,” he said. “We are seeing around the world a decrease in the number of new startups each year, plus, the funding that is happening is in later rounds for the select companies that are showing themselves to be market leaders.”

So, maybe it is too soon to tell if President Macron and his administration are able to turn France into a “startup nation.” What seems to be the case, though, is that if they want to boost their PropTech industry they will need to make changes that deal with larger tech companies and not just scrappy startups. As PropTech grows up and the power dynamics start to form it is becoming clear that a focus on incubation might be too little, too late.

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