Sifted - Macron's Vive La Tech

Good morning there,

Last week was busy for Paris’s tech scene. With the four-day VivaTech conference taking over the city, coffee dates gave way to VC rooftop parties, with one theme recurrently coming up: France’s AI coming of age. The announcement just before the event kicked off that French AI startup H had raised a huge $220m seed round made it even livelier.

With a handful of promising AI companies in the league, the French tech ecosystem is feeling optimistic — but scaling its homegrown champions is coming with some growing pains. I have more on that below.

I’ll also be discussing the challenges of internationalisation at Sifted’s next breakfast event in Paris. Mirakl’s Hugo Weber and Doctolib’s Pierre Vergnes will join me to share their best tips on taking French startups into new markets. You can sign up here.

Elsewhere today:

• How to survive events season
• ‘There are two hubs for tech - Paris and Munich’: Bavaria’s digital minister on becoming a ‘startup nation’
• Homecoming: The founders that return to build businesses

— Zosia Wanat, senior reporter

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Macron's Vive La Tech

Startup booths with questionable slogans, crawling robots and VR headsets everywhere, hungover VCs browsing the coffee areas and Elon Musk making a virtual appearance to warn fans about the world's impending end: last week, VivaTech did its thing again in Paris.

In the eight years since launching, the annual conference — which gathers more than 150k attendees — has become one of Europe’s biggest tech events and a huge platform for French startups. 

For the first time since he was elected in 2017, French President Emmanuel Macron didn’t make it. A last-minute trip to riot-ridden French territory New Caledonia in the South Pacific meant that he wasn’t able to give his usual address to the ‘startup nation’.

He seems as popular as ever with the techies though. “He’s done a great job [in the last seven years],” one deeptech VC tells me. “He was able to have a vision and go for it.”

Just before he flew out, Macron gathered France’s “best AI talents” at the Elysée Palace for a VIP evening. He told an audience of researchers, entrepreneurs and investors that “it’s very clear that the city of lights is becoming the city of AI”. He added: “It is today that we take the turn [of AI] or not, and at the right speed or not.” 

The question of how to take that turn came up repeatedly in VivaTech panel discussions, networking drinks and 10-minute water cooler conversations. The big worry? To become truly global champions, homegrown French and European AI companies need American dollars, hyperscalers and acquirers — increasing the domination of US-based Big Tech players. 

This is why a debate was sparked earlier this year when French AI darling Mistral secured a distribution deal with Microsoft. Was it a necessary move to meet the company’s global ambitions or another reinforcement of the status quo?

It’s a tough equation to solve, with Europe’s aims of tech sovereignty appearing to be — to an extent — in contradiction with the ambition of creating regional champions that could compete against tech behemoths from across the Atlantic. 

Few venture to give a solution. “You have to be conscious of your non-sovereignty while you work to become a universal company like Google or Meta,” one AI founder told me at the event.

“It seems at one point, Europe is going to have to choose,” said one AI startup employee.

Readers, does it have to be one way or the other? I’m curious to hear your thoughts. Get in touch here.

— Daphné Leprince-Ringuet, French tech reporter

🇫🇷 French battery making startup Verkor has raised more than €1.3bn in loan financing to build its first production plant in the northern French town of Dunkirk.

• The deal brings the total amount that Verkor has raised to more than €3bn, with the fresh funding coming from 16 commercial banks and three public banks, including the European Investment Bank, Bpifrance, ING BANK NV and Banco Santander.

😮 “I’d put Bavaria ahead of Berlin”: Bavaria’s digital minister Fabian Mehring has big ambitions for tech in the region. He was in Paris last week to share notes with the French government on how to create a thriving tech ecosystem. French tech reporter Daphné Leprince-Ringuet sat down with him to find out more.

🏡 Brain drain is one of the biggest problems holding back some of Europe’s younger startup hubs. While countries in regions like central eastern Europe and southern Europe might be full of bright talent, many young people leave in search of better opportunities in tech hubs such as London and San Francisco. But now they’re starting to come home to launch their next companies. 

• “Y Combinator and Silicon Valley won’t magically get you to product-market fit. Living in San Francisco is three to four times more expensive than living in Warsaw, which makes the runway three to four times shorter,” says Piotr Grudzień, Polish cofounder of digital assistant platform Quickchat AI, who returned to Warsaw after living in London and San Francisco. “The users don’t care if this startup is in the Silicon Valley or not but they care if it solves their problem or not.” 
• Sifted’s CEE reporter Zosia Wanat has the stories of European tech’s returnees here.

😅 How to survive events season.

👀 32 autonomous vehicle startups to watch. (Sifted Pro subscribers)

Applications are open for Sifted's Leaderboards

We’re looking for startups in both the Southern Europe or Benelux region with a strong track record of revenue generation to feature on our inaugural leaderboards — rankings celebrating the region’s fastest-growing startups. Believe your startup deserves a spot?

May 29 | Berlin. DACH reporter Miriam Partington will be hosting an intimate breakfast meetup for Sifted readers alongside 2hearts, Waanda and Qunomedical to showcase the successes of migrant founders in Germany and to share advice on how to navigate the challenges of building a business there. RSVP; it’s free!

June 3 | Vienna. Get ready to network with Sifted at the ViennaUp Startup Festival! Join us for a networking event to celebrate the Central Europe Leaderboard. Don’t miss out on hearing from Peter Windischhofer, cofounder and CEO, Refurbed, Janice Goodenough, founder and CEO of HYDROGRID, and Tamas Kadar, CEO & cofounder of SEON. RSVP.

June 4 | Paris. French tech reporter Daphné Leprince-Ringuet will be hosting our third breakfast reader meetup of the year at Station F. She’ll be joined by guest speakers from Miraki and Doctolib to discuss how France’s most established unicorns have approached — and are still navigating — the hurdles of internationalisation. RSVP.

June 4 | Munich. Newsletter editor Tom Nugent is moderating a panel on the state of Europe’s spinout ecosystem at Spinoff Summit 2024. Who should he meet while he’s there? Get in touch.

June 12 | Online. Fintech reporter Tom Matsuda will bring together a panel of experts from Omio, Tipalti and Eight Roads to discuss how to build, nurture and maintain an airtight finance team to improve your bottom line, RSVP.

Dublin-based Spectrum.Life, a digital health provider, raised €17m in funding. Act Venture Capital led the round.

Berlin-based Rows, which offers spreadsheet-building software, raised $9m in funding. Indico Capital Partners led the round and was joined by investors including Cherry Ventures, Accel, Lakestar and Armilar.

Vilnius-based Unmanned Defense Systems, which develops and designs tactical and unmanned military drone systems, raised €3.2m in funding from investors including Coinvest Capital.

Vienna-based SOMAREALITY, which develops eye-tracking-based biomarkers that can assess a person’s cognitive state, raised €1.5m in funding from Gateway Ventures, Wodak & Partner, Panta Rhei and Manfred Stockmayer, Startup Wise Guys, Birdhouse Ventures and Medical Technology Lab.

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