Sifted - ‘France’s top incubator’?

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Do you know what France’s top startup incubator is? It might not be what you think. In local circles, France Travail, the government body that manages unemployment benefits, has been playfully awarded the title for spinning out new founders. France Travail provides financial backing for job seekers who start a company and, as my colleague Daphné Leprince-Ringuet explains below, it was responsible for one out of six businesses founded in France in 2022, according to the organisation. Daphné digs more into the “top incubator” today, reporting from the front lines of… karaoke night at local French startup campus Station F. Read on for that. 

Elsewhere today, we take a look at European Y Combinator competitor Entrepreneur First’s (EF) first demo day in the US, asset manager Lazard’s upcoming partnership with French early-stage VC Elaia to launch a deeptech growth fund and the 16 ex-Doctolib employees that became founders.

— Anne Sraders, senior reporter

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‘France’s top incubator’?

On Tuesday, I attended a karaoke night. Not any karaoke night — but the weekly sing-off at La Felicità, the Big Mamma-owned Italian bar and restaurant tucked away at the far end of Station F, which has significantly contributed to the fame and glory of Paris’s startup campus and incubator.

It’s a place where team meetings, intro coffees and after-work drinks happen on a regular basis. The notti Castafiore on Tuesdays are open to all — meaning that they are the place for startuppers to mingle with “normal people”, as one founder put it, and “remember there is more outside our bubble”.

It’s busy for a school night. Watching it all escalate as the same founder took to the stage with an impeccable rendering of Sir Mix-A-Lot’s ‘Baby Got Back’, I wondered if we’d finally delivered on what French President Emmanuel Macron had in mind when he famously said, fresh upon winning the election in 2017, that he wanted the country to become a “startup nation”.

That was the same year that Station F launched — backed by French billionaire founder Xavier Niel, as a new hub for French tech — and one that many founders and investors tell me marked a turning point for the ecosystem. Startup fundraising more than tripled between 2017-2023, from €2.5bn to more than €8bn, according to data from consultancy firm EY.

Government policy has given the tech sector a big leg up. Macron pushed several tax reforms in 2018, encouraging wealthy individuals to invest their capital and reducing corporate tax from nearly 35% to 25% — and a government committee recently found that in sectors most impacted by the reforms, company creation rates since 2017 shot up. 

Alongside many other initiatives, like the Choose France programme, which is intended to convince international investors to back French companies, this has been a catalyst for French tech. “There’s been a change in mentality and in perceptions of entrepreneurship,” one scaleup executive tells me. “Uninhibited entrepreneurship, in a way.”

It’s also become the norm to see incubators, accelerators, startup campuses and studios launching. But there’s one organisation in particular that has caught my attention lately. France Travail, the government body that manages unemployment benefits, has previously been labelled as “France’s top incubator” — a tongue-in-cheek reference to the organisation’s growing attempts to turn job seekers into founders. 

France Travail offers financial backing for job seekers who start a company, such as monthly allowances that complement founders’ first salaries, or larger pots of money to help with the funding required to kickstart a company. Since 2019, it has extended these rights to employees who decide to leave a business to start their own. In 2022, 166k job seekers created a company, according to the organisation — that’s one out of six businesses founded in France that year.

It got me thinking: how, if at all, does this translate into the startup world? Are job seekers feeling more empowered to launch their own company in Macron’s “startup nation”? And is France’s unemployment benefits system genuinely backing some of tech’s next unicorns? If this sounds like your story, I’d love to hear your thoughts for a piece. Get in touch here.

— Daphné Leprince-Ringuet, French tech reporter

🇫🇮 Finnish space startup ICEYE has raised €94m in growth funding led by Finnish sovereign wealth fund Solidium Oy, with participation from Move Capital Fund I, Blackwells Capital, Christo Georgiev and existing investors. 

• The company, which was founded in 2014, deploys radar satellites that collect images of the surface of the Earth at any time of day, in any weather conditions. It uses a technology called synthetic aperture radar (SAR) that gathers data by transmitting and receiving microwaves. 
• The company says it made over $100m in revenue in 2023 and, according to CFO Susan Repo, it has experienced exponential commercial traction over the past few years internationally.

👀 Company builder Entrepreneur First (EF), which started in 2011 as Europe's answer to Y Combinator, has hosted its first-ever demo day in San Francisco after launching in the US last October.

• It marks the start of a more US-focused chapter for EF, in which all its startups will be obliged to move to California for the second part of its programme that leads up to demo day, as well as officially incorporating their companies in the US.

🇫🇷 Asset manager Lazard, one of the world’s largest private investment banks that manages $247bn worth of assets, is set to partner with French early-stage VC Elaia to launch a growth fund that’ll back European deeptech scaleups. Although the size of the fund — which will launch by 2025 — is still TBC, Elaia managing partner Xavier Lazarus tells Sifted that it could reach €1bn, writing tickets ranging from €30m-40m. 

• As part of the partnership, Lazard has taken a minority stake in Elaia, and the agreement includes provisions for the asset manager to purchase up to 100% of the VC. The goal is to slowly increase Lazard’s stake over time to eventually reach total ownership, with a first increase expected upon the first closing of the fund.

🤯 Just four months after a €385m Series A, France’s Mistral AI is in talks with investors to raise again at a valuation of $5bn, according to The Information. Citing a source with direct knowledge, the report says the Paris-based startup, which was last valued at $2bn, would be seeking several hundred million dollars of funding. 

• Mistral is seen by some as one of Europe’s strongest competitors to OpenAI. Backed by US investors Andreessen Horowitz, General Catalyst and Lightspeed Ventures, it recently inked a distribution deal with cloud giant Microsoft, and just released a brand-new open source model, Mixtral 8x22B, which is fluent in English, French, Italian, German and Spanish. The company declined to comment.

💰 US venture powerhouse Andreessen Horowitz (a16z) raised a whopping $7.2bn in new funds, the firm announced earlier this week. It raised nearly $3.8bn for a growth fund, about $1.3bn for tech infrastructure startups including developer tools and AI, $1bn for apps and $600m each for US defence and manufacturing-type startups that fall under its “American Dynamism” theme and its gaming fund.

• A16z has recently made big bets in Europe, including French OpenAI challenger Mistral’s December €385m funding round. 

🇺🇦 A new four-month accelerator has launched in Ukraine to help young local defence startups raise their first investment and develop technologies that meet the needs of the Defence Forces. The Defenсe Builder Accelerator was created by Ivan Kaunov, an officer of the Armed Forces of Ukraine, and Kateryna Bezsudna, who are both also entrepreneurs, alongside Ukrainian tech company co-builder Genesis, Sigma Software Labs and the Kyiv School of Economics. 

• The accelerator is open to Ukrainian startups building both hardware and software. According to its site, the deadline to apply is April 30.

🤝 The Doctolib founders factory: Meet 16 employees-turned-founders.

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We’re seeking startups in central Europe showcasing exceptional growth to feature on our Sifted 100: Central Europe Leaderboard — a ranking of the top 100 fastest-growing startups. Want to gain unparalleled exposure and credibility for your startup? 

London-based Skyports, a flying electric drone and vertiport infrastructure developer, raised $110m in Series C funding. ACS Group led the round and was joined by investors including Groupe ADP.

Copenhagen-based Flatpay, which builds point of sale and payment solutions for small and medium-sized businesses like restaurants and salons, raised €45m in Series B funding. Dawn Capital led the round and was joined by investors including Seed Capital.

Oxford, UK-based Theolytics, a biotech developing viral cancer therapies, raised £19m in funding from investors including Sound Bioventures, M Ventures, Taiho Ventures, Epidarex Capital, Oxford Science Enterprises and the University of Oxford.

London-based Wagestream, a financial wellbeing app that enables workers to receive their salary early every month, raised £17.5m from investors including British Patient Capital, Lombard Odier Investment Managers and Northzone.

Berlin-based Pliant, a B2B credit card platform, raised €18m in Series A extension funding. PayPal Ventures led the round and was joined by investors including SBI Investment, Motive Ventures and Alstin Capital.

Stockholm-based Blykalla, which specialises in the production of lead-cooled small modular reactors, raised €6.8m in funding. Norrsken Launcher and Nucleation Capital co-led the round and were joined by investors including Earth Venture Capital and Farvatn.

Berlin-based Cozero, a carbon accounting platform for companies to measure and reduce emissions and comply with sustainability regulation requirements, raised €6.5m in Series A funding. Kvanted Ventures and ENV co-led the round and were joined by investors including New Alpha Asset Management.

Paris-based Dark, which is building space security services that can detect threats in low earth orbit, raised $6m in seed extension funding from investors including Eurazeo, Long Journey, Kima Ventures and Frst.

Helsingborg, Sweden-based Gridly, a spreadsheet platform for managing multilingual content, raised $2.6m in seed funding from investors including Subvenio Invest and Rendered.VC.

Espoo, Finland-based NPHarvest, which is developing a hardware solution for the collection and recycling of nutrients from wastewater, raised €2.2m (€1.3m in equity and a 900k grant) in funding. Nordic Foodtech VC led the round and was joined by investors including Stephen Industries and Maa- ja vesitekniikan tuki ry. The grant was awarded by the Finnish Ministry of the Environment.

London-based Huzzle, a career management platform for students and those in early careers, raised €1.67m in pre-seed funding from investors including 10X Founders.

London-based HealthKey, which allows patients to find a range of health and wellness services for advice, testing and payments and manages the admin for them through an app, raised £1.13m in seed funding. Aviva Ventures led the round and was joined by investors including Ascension, Oxford Capital and Cur8 Capital. 

Vilnius-based CTO2B, a SaaS platform for automated DevOps on any cloud platform, raised €1m in pre-seed funding. Practica Capital led the round and was joined by investors including FIRSTPICK.

Amsterdam-based Verify, which is developing an AI algorithm that embeds an invisible fingerprint in images and videos to improve digital authenticity, raised €1m in funding from investors including Google for Startups.

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