France leads Europe in its enthusiasm for Web 2.0 startups, an industry that has doubled in size across the continent since 2005. According to Dow Jones/Venture One data French start-ups raised close to $40 million in venture capital in 2006, accounting for 40% of the total […]

France leads Europe in its enthusiasm for Web 2.0 startups, an industry that has doubled in size across the continent since 2005. According to Dow Jones/Venture One data French start-ups raised close to $40 million in venture capital in 2006, accounting for 40% of the total dollars invested in the category across Europe last year ($101 million), and nearly double the money invested in British Web2.0 companies.What are the forces behind this French 2.0 wave?

Broadband and Cultural roots, for starters!

France is one of the biggest broadband countries in the world, allowing its 15.3 million odd broadband users to experiment with some of the latest technologies over blazing fast Internet connections. Free WiFi is becoming commonplace. It is no surprise that one-in-five of us has a personal blog, a website or has published personal audio or video content on the Internet. France’s leading blogging platform, Skyblog, hosts 9 million blogs now, and according to Alexa, is the second most-visited web site in France after Google, (It is the 32nd most-visited site, globally!)

The easily availability of super-speed connections has made video and essential part of French Internet life. France’s leading a video-sharing platform, known as Dailymotion, already gets 35 million unique visitors per month. Dailymotion is the #2 video site behind YouTube, with France making up a big component of its traffic. According to ComScore, French consumers spend a greater percent of their total hours online viewing streaming video (13%) than do consumers in the UK (10%), in Germany (9%) – or even the United States (6%)!

Secondly, France, also has a financial infrastructure to support the start-up activity, with 25 venture capital funds of various sizes, that specialize in early-stage financing, among them Soffinova (France’s largest venture firm), Iris Capital, i-Source, and Innovation Funds (FCPIs).

Third, is the a small but active group of entrepreneurs who tasted success with their earlier companies and are now investing in other start-ups, much like Silicon Valley angels. These include Jean-Baptiste Rudelle, founder of Criteo; and Loic LeMeur, who till recently led U.S.-based Six Apart’s business operations in Europe.

As successful as they’ve been in the consumer space, French startups are now busy taking Web2.0 plays into the enterprise: BlueKiwi, which just raised $5.4 million (€ 4 million) from Soffinova, specializes in Web2.0 software solutions (a mix of blogs, wikis and other social networking platforms) for big corporations such as Danone, Dassault and the French postal services.

French entrepreneur Jerome Archambeaud founded and sold two startups, Avence and VRTVStudios, both in the early 00’s. Previously, Jerome served as Skype’s country manager for France and Belgium, and as a marketing director at Walt Disney Europe and Nestle Brazil. He holds an MBA from the Harvard Business School.

By Jeremy Archambeaud

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  1. It is my personal experience that two very significant things still separate French web 2 efforts with those in the US:

    1) VC money raised is almost exclusively done by “established, experienced” and well-connected entrepreneurs in an incestuous circle (which I was fully able to appreciate at LeWeb 3). Although this may be held true for SV, there are also plenty of opportunities for the fresh to join in (which did not seem the case at all in France).

    2) French Web 2.0 startups, for the most part, stay in France, and do not expand to larger markets. While there are a few notable exceptions (Netvibes in the forefront), any logo-list of prominent French web companies leaves me thinking “huh?” on well of 3/4 of them.

  2. Id like to see a european challenger to google. Seems only israel, alil country is big on brains and b-lls to throw out products which compete with the big boys…jajah,I seek you,and i dont recall but a gmail BIG email challenger ..I think it requires a take charge type who can get others to do things that you want . Europe needs to see it self like this.

  3. Rand Leeb-du Toit Sunday, July 1, 2007

    Consider yourselves a cut above…Australia, at least — broadband is paltry and early stage investors are non existent. Good to see France leading the Euro-charge.

  4. Interesting that you note 25 early stage funds in France…a standard complaint in the UK is of the “funding gap” between angel and low end VC stage.

  5. Paolo’s Weblog. Sunday, July 1, 2007

    Meditate gente, meditate

  6. I have just read about a recent analysis by Forrester Research regarding social computing in Europa. The result was that web 2.0 online habbits such as blogging or social networking are still quite uncommon in Germany and France, compared for example to the UK. That isn’t really according with this article. It sounds a little bit too euphoric to me.

    Check this chart about social network usage: http://www.computerwoche.de/imgserver/bdb/463800/463847/original.jpg

  7. Stirrdup Trackback Sunday, July 1, 2007

    And now the French Web 2.0 Wave

    This story has been submitted to Stirrdup. If it can generate enough interest, it will make it to the main page.

  8. The web 2.0 is just starting… You Tube, Windows Live, Meebo, Ajaxtrans…. Is just some samples of 2.0 web!

  9. Informative.. Irritating although to find the name of Loic le Meur here and make him sound like he is the next Google or Yahoo founder… is he really THAT creative or is he just PR-savvy?

  10. There must be something in the idea espoused in this blog, as the wave also seems to have hit French political elite; not a group known to be at the cutting edge of anything in particular. Both Sarkozy and Royal used online techniques in their recent campaigns.

    According to a WSJ article back in May, Royale managed to recruit 350,000 e-campaigners and enlisted 1,500 sites to her cause. Sarkozy’s site was full of video of the man himself…what can one say?

    To Luc Beal’s chagrin, M. Le Meur was also cited by the WSJ as the voice of the French online world, commenting on this occasion that this generation of politicians would never get internet campaigning. I suppose the question is whether Royal can prove him wrong by maintaining and using her 350,000 e-militants the next time around.

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