Companies news
What are the accelerators driving the startup ecosystem in Paris?
It is common for startups that have just been established to have very limited funding and resources, so support from stakeholders is essential.
What is an Accelerator?
According to Harvard Business School, an accelerator is a “short, intensive programs that provide education, resources, and mentorship if you’re an early- or mid-stage founder." Since early-stage startups are those that already have an initial product and middle-stage startups are those that are just beginning to grow, the English word “accelerate” is used to mean “to accelerate all at once.
On the other hand, incubator, which is often used as a synonym, is described as “the environments and resources to help your ideas succeed."
Let's take a look at accelerators, which play a role in accelerating the growth of startups, and compare them to incubators, which are programs that support the development of products. The following three factors are important in understanding accelerators.
(1) Venture stage
As mentioned above, accelerators target early or mid-stage startups, which basically means startups that have passed the seed stage. This means that in order to receive support from an accelerator, you must already have an MVP (minimum viable product) and must have gained some level of confidence in your product and market fit.
It is understood that an incubator is primarily responsible for helping innovators to realize their innovations and convert new ideas into businesses, whereas an accelerator is responsible for accelerating the growth of products/services that already exist.
(2) Structural programs
Accelerators also usually have more structured programs compared to incubators. This is because, unlike incubators, they do not have to go through the process of creating an innovation from nothing or of turning a business idea with a new technology into a business, and they have clear resources needed to expand an already established business model.
The accelerator supports startups by incorporating into its programs the vast amount of learning and growth accumulated over the last several years and by leveraging its various human networks.
(3) Timeline
While incubators take a relatively long time to create an idea and then help develop it into a business model, accelerators typically have a boot camp-style program that lasts several months. This is because the purpose of accelerators is to help businesses expand, and since they already have an MVP, they can accelerate the rate of growth by providing intensive support.
Differences in Accelerators by Country
Accelerators typically differ in nature and function by country or region. This is because each country has developed its own startup ecosystem based on different industries, cultures, and legal systems.
For example, in Silicon Valley in the U.S., many startups are focused on the technology sector, and because of their influence, accelerator programs tend to focus on advanced technology and innovation.
On the other hand, the Japanese startup ecosystem, with its blend of traditional industries and emerging technologies, emphasizes a different perspective, such as collaboration with traditional manufacturing and service industries and support for overseas expansion.
In addition, some European countries tend to place more emphasis on social impact and environmental considerations, and may offer specialized support for social enterprises and environmental technologies.
The different attitudes toward risk and the nature of the ecosystem in each region also have a significant impact on accelerator programs.
For example, according to an article by Mikel Mangol, positive impressions of entrepreneurship are 17% in Germany versus 39% in the U.S., corroborating the culture of risk-takers in the U.S.
Another study examines differences in sources of VC funds in Europe and the U.S., highlighting differences in European and American support for entrepreneurs and startups.
In Europe, government institutions account for 24% of all venture capital funding, while in the U.S. they account for only 10%. In Europe, CVCs (investment divisions within large companies) account for 17%, while in the U.S. they account for only 5%, a significant difference.
These two data show that Europe tends to be risk-averse compared to the U.S., which is relatively risk-loving. In order to produce a large number of entrepreneurs in such a risk-averse culture, governments in European countries are leading the development of startup ecosystems and providing generous support from various stakeholders, including government agencies and companies, to reduce business risks for individual entrepreneurs. This is thought to reduce the business risks of individual entrepreneurs.
If investors in the U.S. and Europe have different levels of risk appetite, American investors, who prefer risk, will seek a reasonable return, while European investors, who are relatively risk averse, are more flexible in terms of returns. If European investors are relatively risk-averse and flexible in terms of returns, it is expected that accelerators will also support prudent business considerations to allow for solid business growth with relatively more time to spare.
Characteristics of Paris Accelerators
Focusing on the startup ecosystem in Paris, one of the leading startup hubs in Europe, we would now like to introduce three characteristics of Paris accelerators.
The first is entrepreneurial experience. Emmanuel Delaveau, general partner of Partech Venture, which focuses on Europe and the U.S., says of Paris startups, “Many successful entrepreneurs in Paris have become business angels and share their experiences through accelerators."
This shows the maturity of Paris as a startup city and suggests that a sustainable ecosystem is in place. It is also expected that entrepreneurs will act as angel investors and mentors, increasing the opportunities and resources available to entrepreneurs in Paris.
The second is the techification of local industries. Paris has a diverse economy with a diverse range of industries, and the tourism, culinary, and fashion industries are also very well known around the world.
The French government, through initiatives such as La French Tech, promotes innovation, especially through the use of technology, which has led to the formation of new communities around Paris for each industry, such as food tech, wine tech, and fashion tech. Along with the formation of these new communities, accelerators specializing in each industry have emerged, and these accelerators leverage their industry-specific knowledge and networks to support startups.
The third and final point is global expansion. France is very open to innovation and technology, as evidenced by the example of STATION F, a large incubation facility in Paris. This can be seen from the fact that the French government has introduced a simplified visa process to bring in IT talent from outside France as part of La French Tech's activities.
In addition, few Paris-based accelerators are organizations that operate exclusively in Paris; many also have locations in other startup cities, such as London, Berlin, and Silicon Valley. There are also examples of accelerators originating from the U.S. that are based in Paris.
This attractiveness of Paris is also reflected in the numbers: according to Startup Genome's 2023 Startup Ecosystem Report, Paris has a GLOBAL CONNECTEDNESS (international connectedness index for startup investment) of 8 (maximum 10), which is higher than Tokyo's 7 This is a higher level than that of Tokyo. Furthermore, in FUNDING ACCESS (an indicator of funding volume and growth in the early stage), Paris is 9, indicating a higher index than Tokyo's 6.
Thus, the Paris accelerator is not bound by regional boundaries, but aims for sustainable growth and success while bringing in talent, ideas, and funding from around the world.
Introduction of Paris-based Accelerators
Finally, I would like to introduce you to five accelerators based in Paris.
The Family
The Family is a company founded by Alice Zagury and other co-founders. They believe that “ambition” is a social construct, and that if it is a culture, it can be created through learning and training, and they have created The Family, a community-based organization.
Previously based in Paris, London, and Berlin, the program will only offer a 6-week remote program starting in 2020. A unique feature of this program is the Demo Day, which takes place entirely online. Participants will be able to present their reimagined business models in front of investors through the 6-week remote program, with the goal of making the fundraising process as efficient as possible.
NUMA
NUMA offers an accelerator program aimed at fostering the growth of new businesses through innovation and technology. Originally offering only La Cantine, the first co-working space in France, NUMA launched Le Camping in 2011, one of the first accelerator programs in Europe. The program takes full advantage of the Parisian startup ecosystem and was created with the support of the City of Paris and other large companies such as Google, Orange, and BNP Paribas.
Two elements are of great importance to NUMA: the first is digital, the center of economic and cultural reform. And second, the drivers of that reform and change, the people.
The first thing you see when you step into the NUMA building is a vast bar counter and co-working space. Here, collaboration is encouraged to foster innovation across borders. Furthermore, each level of the hierarchy clearly demarcates the areas of experimentation, creation, acceleration, and communication.
50 Partners
Next up is 50 Partners, founded by 50 entrepreneurs and founders of well-known French companies committed to the success of their startups.
50 Partners offers accelerator programs, VC support, and funding support for startups, particularly in the tech, impact, and health tech areas. 50 Partners features long-term accelerator support, with selected startups receiving tailor-made support at all stages. As a result, selection to the program is highly selective, with only 6 to 8 projects selected each year out of more than 2,000 projects per year.
La Javaness
The fourth program is La Javaness, a Paris-based accelerator specializing in AI.
It is a little different from other accelerators because it also provides AI solutions, but it supports startups based on the belief that data and AI should solve the major challenges of humanity. In particular, it help startups expand their businesses by developing and delivering AI value-added solutions across the entire data and AI value chain.
The duration of the accelerator program is 24 weeks, which is a longer term support compared to accelerator programs in the US.
ShakeUp Factory
Last but not least is ShakeUp Factory, which focuses on Food Tech and Agriculture Tech.
ShakeUp Factory is an accelerator housed at STATION F. It was created by founders Kevin Camphuis and Nicolas Raffard to fill a gap that they themselves experienced while working in the agri-food industry.
To date, the accelerator has supported over 200 startups in the food, beverage, and agriculture industries, providing free STATION F office space to startups participating in the accelerator program and leveraging the food ecosystem and professional network in France.
Concluding Remarks
Now, let's take a step away from France and focus on Japan. Japan is globally recognized as a risk-averse country that values stability and certainty due to its historical and cultural background. Given this trend, the Paris ecosystem seems very much in line with Japan. It is possible to pursue steady growth with relatively substantial support.
Like France, Japan also has a diversified industrial structure, and innovation in existing industries is an important theme. Therefore, Japanese companies and entrepreneurs who are developing industry-specific businesses may find that participating in a Paris accelerator, which is already actively working to technologize various industries, may be an option to promote business growth.
RouteX Inc. will continue to monitor trends in Europe, including the Paris accelerator, in a timely manner and provide information to our readers.
If you are interested in this subject, hoping to develop your business or enter a new market, please let us know. We are experts in innovation, particularly open innovation and start-ups, linking Japan to France and Europe. So we can provide specified support to your company's needs. If you would like to discuss this in more detail or find out more about our approach, please feel free to contact us via the CCIFJ member page.
