Sifted - Liberté, égalité, it’s compliqué

Good morning there,

Two weeks can be a long time in politics. When French president Emmanuel Macron called a surprise snap election at the beginning of June, the tech sector immediately reacted with concern at the prospect of a win from the far-right; now, as a new left-wing coalition gathers pace, the outcome of the election is even more unclear.

That’s worrying a number of founders and investors, who see major challenges for tech on both sides of the spectrum. I dig into what’s at stake for startups below.

Elsewhere today:

• Can Europe create tech champions without the US? Not yet, says AI unicorn Dataiku's founder.
• 9 European university spinouts to watch, according to investors.

— Daphné Leprince-Ringuet, French tech reporter

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Liberté, égalité, it’s compliqué

It’s only been two weeks since French president Emmanuel Macron sent shockwaves across the country by calling a snap parliamentary election scheduled for the end of this month — but the campaign has already seen multiple plot twists. And none of them has reassured the tech sector.

Watching a crowd of investors and founders sipping on cocktails at a networking party last week, one VC told me: “I don’t think people realise how worrying the situation is.”

The far-right party Rassemblement National (RN) looks set to secure the majority of the vote, according to opinion polls. But a surprise coalition of left-wing parties formed a few days after the election was called, dubbed the Nouveau Front Populaire (NFP), is also gaining traction. It comprises the Socialist Party (PS), the Green Party (Europe Ecologie les Verts) and the French Communist Party (PCF). And, crucially, it also includes LFI (La France Insoumise) — a party that some critics consider to be far-left (although French institutions officially label it ‘left-wing’).

Polls place the NFP just behind the RN and ahead of Macron’s presidential camp. And while the outcome of the election is hard to predict — voters elect local MPs in 577 constituencies — one thing is certain: it’s not looking so good for the French president.

The prospect of a RN majority in Parliament raised concerns among techies early on. They’re worried the far-right party’s protectionism will turn away international investors; that its strict stance on immigration will deprive French tech from much-needed talent; and its euro-scepticism will send the wrong signal at a time when cooperation across the continent is needed to support innovation.

But the NFP is now also worrying some founders and investors. The coalition has promised a “break” with Macron’s economic policies, including some that were seen as particularly startup-friendly; it has committed, for instance, to overturning a number of tax reforms implemented by the president in 2018, which were found to have likely led to more company creation.

“It is hard to see how this will not lead entrepreneurs to move en masse their operations elsewhere,” French economist and MIT professor Olivier Blanchard posted on X, warning that the NFP’s programme will lead to “an economic catastrophe”.

In the tech sector, which is usually reluctant to get involved with political debates, calls to avoid voting for either side of the spectrum have multiplied in the past few days.

“[The election] has created an unprecedented risk that our country will be governed in the coming weeks by forces that offer withdrawal, shutting down and regression, or by forces that welcome confrontation, division and the radical transformation of our economy,” the founder of French unicorn Mirakl, Philippe Corrot, recently wrote in a statement that was signed by 73 other business leaders.

It’s impossible to predict the make up of the French parliament in two weeks: left-wing? Far-right? A coalition of left, right and Macron’s party? Or maybe another plot twist?

But some have already made their mind up. 

“Either we’ve got an RN majority, and we’re fucked, or we’ve got an NFP majority, and we’re still fucked; or we have a government freeze,” I was told by the same VC last week.

“I’m currently raising a fund, and I’m seriously considering getting out of the country.”

— Daphné Leprince-Ringuet, French tech reporter

🏥 French healthtech unicorn Doctolib has bought Swiss company Typeless, which automatically transforms spoken healthcare interactions into usable data. It comes after it acquired Berlin-based Aaron.ai, a startup that provides AI-powered telephone assistance for medical practices, last month.

• Doctolib previously told Sifted that it was planning to double down on AI across all of its products; it’ll leverage Typeless’s technology to develop an AI-powered ‘assistant’ for doctors, which it says will handle note-taking during consultations and draft structured summaries. 
• The tool, which is similar to the ‘AI assistants’ built by a number of companies, like Paris-based Nabla, is expected to be available from October. 

🇬🇧 UK energy company Octopus Energy will pay nearly £3bn to the government as part of its pledge to return taxpayer funds it received for rescuing Bulb, its competitor that collapsed during the energy crisis. The move means the UK government will eventually recoup all the funds it lost when it temporarily nationalised the company.

🇺🇸 Can Europe create tech champions without the US? Not yet, says AI unicorn Dataiku’s cofounder. The company, which has raised $850m to date, was founded in Paris but moved its HQ to New York in 2016 in order to raise more funding than was available in France back then.

• Would its cofounder, Florian Douetteau, advise other companies to do the same today? Yes, he tells Sifted in an interview — and in the long-term, that'll be good for Europe’s venture ecosystem, he thinks. “We need these European companies that find success by exporting to the US.”
• “We are now in an ecosystem that, in terms of funding or regulatory stability, is pretty much there,” says Douetteau. “The key piece now is cultural: having more entrepreneurs, more perseverance, more ambition and the capacity to accept failure.” 

🎓 9 European university spinouts to watch, according to investors from Earlybird, Octopus Ventures and Voima Ventures.

👔 Corporate venture firms don't have the longest lifespans, on average, but they're a steadily growing part of Europe's investment landscape. 

📣 Readers, we want to hear from you. What’s the best thing on European tech you’ve read recently? Drop us a line.

What’s new in Greek tech?

Our latest report brings insider intel from founders, investors and senior executives about the fast-growing Greek startup hubs and the trends taking shape, to find out how the Greek tech ecosystem is really doing in 2024. 

June 25 | Online. Join us for a showcase of the ultimate list of B2B SaaS startups featured on Sifted's upcoming Rising 100 report, sponsored by Sapphire Ventures, at our next Conference Call — exclusively for Pro subscribers. RSVP.

July 3 | Online. News editor Tim Smith will be moderating an upcoming Sifted Talks with industry experts to find out how budding CTOs can effectively harness the power of AI and machine learning for better business results. RSVP.

July 9 | London. Join us for a live panel discussion on the impact of AI on work hosted by Startup Life’s Anisah Osman Britton. We'll be discussing things like what's possible with AI right now, how you take advantage of new technology as you scale and whether AI really can replace humans at work. There’ll also be networking and (free) canapés and drinks. Spaces are limited — RSVP now to secure your place.

Munich, Germany-based Zing Coach, an AI-powered fitness coaching app, raised $10m in Series A funding. Zubr Capital and Triple Point Capital led the round.

Cambridge, UK-based Wave Photonics, which is developing on-chip photonics designs for quantum technologies, sensors and data centres, raised £4.5m in seed funding and £900k in grant funding. UK Innovation & Science Seed Fund and Cambridge Enterprise Ventures led the round and were joined by investors including Redstone, QAI Ventures, Kyra Ventures, Deeptech Labs and Parkwalk Advisors.

Edinburgh-based Wordsmith, an AI-powered legal assistant, raised $5m in seed funding. Index Ventures led the round and was joined by investors including General Catalyst.

Paris-based Skynopy, which has developed connectivity technology for satellite operators to communicate with their satellites in low-earth orbit, raised €3.1m in funding from investors including Heartcore Capital, Kima Ventures and Bpifrance.

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