Flying water taxis
highlight French startup frustrations
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[August 24, 2017]
By Mathieu Rosemain and Gwénaëlle Barzic
PARIS (Reuters) - French yachtsman Alain
Thebault wants to turn a boat design he used to break a world speed
sailing record in 2009 into a clean, fast taxi service for the waterways
of major cities.
The SeaBubble won the backing of private investors - Thebault expects to
raise between 50 to 100 million euros by the end of September.
Emmanuel Macron, France's pro-business president who wants to create a
"startup nation", even championed the idea when he was economy minister.
His office did not respond to requests for a comment about whether he
still backed the project.
SeaBubbles faces specific regulatory hurdles, not least trying to
convince Parisian authorities to raise the speed limit of the River
But like other startups, he fears his company will be held back by
administrative bureaucracy if the idea takes off and he needs to grow
“It’s a road full of obstacles for two seabirds like Anders (Bringdal)
and me,” he said of his business partner, a Swedish windsurfing
champion. “If it’s getting too complicated… we’ll go where it’s the
He said it took two months for SeaBubbles to arrange a contract to lease
two cars and a month for lawyers to register the company, a job he said
could have been done in a few hours in some other countries.
The SeaBubbles prototype preserves its battery by rising out of the
water on legs at speed. Paris mayor Anne Hidalgo gave support to the
idea with a ride up the River Seine in June.
But the Bubble only has a chance of running in Paris if the authorities
raise the Seine speed limit so it can go fast enough to rise out of the
water, a request they have rejected so far. Hidalgo's office did not
respond to a request for comments on the project, including whether she
thought the Paris speed limit should be changed.
And while he got some initial funding from the state investment bank, it
was demoralizing when two applications for 200,000 euros in government
subsidies were turned down. A spokeswoman said the money could only go
to companies with a "proven business case".
Thebault says "about 5" cities from around the world are interested in
exploring whether the SeaBubble could become part of their public
transport systems but he declined to name them.
"PLENTY OF MONEY"
The state investment bank Bpifrance, has been one of the driving forces
behind the bursting startup scene with investments of 191 million euros
There are also private initiatives such as Station F, a 34,000
square-meter (366,000 sq ft) startup mega-campus in Paris that opened
its doors at the end of June after a 250 million-euro investment by
billionaire Xavier Niel. [nL8N1JQ63D]
Growing investor confidence after this year's election of Macron who has
portrayed himself as a business-friendly president, has also helped.
[to top of second column]
Anders Bringdal, co-founder and president of French startup
SeaBubbles, poses aboard a prototype of a water taxi in the harbour
of Saint-Tropez, France August 18, 2017. REUTERS/Philippe Laurenson
At the current pace, 2017 is on track to reach more than 700 deals by the end of
the year, a jump of around 40 percent over 2016, according to venture tracking
firm CB Insights. About $2.03 billion was invested in the first-half of the year
compared with $2.1 billion for all of 2016. That makes France the second
best-funded tech start-up scene after Britain, CB Insights said.
Investors say startups are not being held up by financial concerns, rather by
bureaucracy and labor laws that are designed to protect employees but can be
cumbersome and expensive for businesses as they get going.
“It’s not a matter of money. There’s plenty, plenty, plenty of money,” said
Romain Lavault, a partner at Partech Ventures, a venture capital fund that also
invested in SeaBubbles.
HIRING AND FIRING
France ranks 21st in this year’s World Economic Forum’s competitiveness report
based on business sophistication, technology and innovation readiness.
But it ranked 115 out of total of 138 countries in terms of the “burden of
government regulation” and holds the 129th position for hiring and firing
practices, based on 2015 data.
"It's more complicated to create a company in France," said Charles Gorintin,
the co-founder of successful Paris-based digital insurance startup Alan.
Restrictive labor laws are at the top of investors' list of complaints. Any
France-based company with 50 employees or more has to create a works council,
organize labor unions elections and go through regular structured regulations
with workers. Redundancies and layoffs can be expensive.
Macron has promised changes.
Very few French startups, have become a “unicorn," or a company valued $1
billion or more.
Criteo <CRTO.O>, a French startup currently listed on the Nasdaq stock exchange,
is now worth $3.4 billion.
“In France, even today, when you build a company, people tell you: it’s great,
but you’re taking a huge risk,” said Jean-Baptiste Rudelle, its chief executive.
“Silicon Valley has been around for 50 years. We’ll need at least 10 to 15 years
before the French (startup) ecosystem can compete with it.”
Nevertheless, Criteo is still based in Paris. Rudelle stays out of loyalty to
the country where his business grew and because it produces top engineers, has a
developing startup scene and good living standards.
“Every single week I receive a resume from an American who wants to settle in
Paris,” said Partech's Lavault. “I've never seen so much interest before."
(Editing by Anna Willard)
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