European policy makers used to want to create tech “unicorns” worth more than €1bn. Today they are setting their sights much higher.
“We need companies like Voodoo, Mirakl, or Alan to be worth not €1bn, but rather €5bn, €10bn, €50bn,” France’s digital affairs junior minister Cedric O told a group of entrepreneurs and investors who gathered at startup campus Station F recently.
And while those kinds of numbers may appear like a stretch, in a country whose entire startup ecosystem raised a total of €5bn in all of 2019, O isn’t the first to suggest them.
In fact, in recent weeks entrepreneurs and policy makers in France, as well as the UK, have been outbidding each other over exactly just how big their startups can become.
Last month, it was the founder of health insurance company Alan who called out French president Emmanuel Macron at a conference about setting the wrong metrics for his country.
“Unicorns don’t matter. We need to find another measure for success,” Alan’s Jean-Charles Samuelian said, referring to Macron’s goal of spawning 25 unicorns in France.
Samuelian suggested instead that France should aim to build five companies worth €50bn each. To that, Macron instantly replied: “jackpot, you’re on”.
Days before, the UK government appeared to see things even bigger. Prime Minister Boris Johnson’s chief advisor, Dominic Cummings, was reported to be looking at ways for the UK to build tech companies worth no less than $1 trillion.
The change in tone shows newfound confidence from Europe about its startups ecosystem.
For a long time, the global domination of US tech giants made European innovation seem anecdotal. But the international successes of startups like Meero, Yubo, or Withings, and growing funding rounds by the likes of Mirakl have contributed to building a new narrative.
“This kind of ambitious attitude gives us a boost,” says Franck Lebouchard, chief executive of French startup Devialet, which makes high-end speakers that have won over the likes of rapper Jay-Z and business tycoon Elon Musk.
“Collectively we can’t just spend years complaining about the Googles and Facebooks,” says Lebouchard. “The step after that is raising a lot of money, expanding internationally and growing in new markets. I’m the first to clap when a French startup does that.”
In France, cheerleading for startups started years ago with the “French Tech” label aimed at promoting local upstarts, and has flourished into a full-blown strategy by the government. Cedric O’s Twitter feed, for instance, has a lot of pom-pom shaking, applauding when founders raise money, startups get taken over and investors set up funds.
It also comes as Europe recently got its first $50bn tech businesses. Ayden is now worth $52bn after a recent rally in the share price. Spotify is not far behind worth $48bn.
“We’re seeing a shift to a more American mentality across all of Europe,” says Amir Nooriala, CCO at Callsign. European founders traditionally have wanted to cash out earlier than their American counterparts, and as a result showed less ambition to see their project as far, he says.
But the bottom line is “you won’t get a trillion dollar company without a founder or CEO fighting tooth and nail to get there,” says Nooriala.