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This article was taken from the September 2011 issue of Wired magazine. Be the first to read Wired's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online.
London's startup scene is booming -- you need only read Wired to see that. But what are Europe's other hot digital cities -- and which are the companies and founders to watch? Welcome to Wired's first annual guide to the continent's rising stars.
PARIS
With venture capital now more accessible, the Parisian digital ecosystem is thriving. La Nouvelle Vague of business has arrived.
Co-ordinates: 48°51'N 18°04'E
Population: 2,193,000
Size: 105.4km2
Global Cities Index ranking 2010: 4
In December 2008, during the final session at the LeWeb conference in Paris, organiser Loïc Le Meur and an American panel that included TechCrunch founder Michael Arrington engaged in a debate about how European startups compare to those in Silicon Valley. Le Meur argued that it was hard for successful French startups to move beyond national borders. To prove his point, he asked the others if they had ever heard of Vente-Privee. None had.
Widely acknowledged as the precursor of the "flash sales" model adopted by Gilt Groupe and, to some extent, Groupon, Vente-Privee has 13 million members (four times as many as Gilt), a portfolio of some 1,200 designer brands and about $1.5 billion (£900 million) in annual sales. In May, it said it would finally enter the US market in a joint venture with American Express.
In Paris, Vente-Privee is part of a group of companies that came to the fore after the dotcom bust of 2000. Others include meetic.com -- its 30 million subscribers make it the most popular dating site in Europe -- and shopping site PriceMinister, which was acquired by Japanese ecommerce giant Rakuten for €200m last year.
The explosive growth of these companies reflects a Parisian digital ecosystem that, according to Colette Ballou, who has worked with many Parisian startups as CEO of PR firm Ballou, "went from nothing to a powerhouse in about eight years". "In 2001, we made the move into ecommerce, long before Groupon," says Jacques-Antoine Granjon, founder of Vente-Privee. "I know nothing about IT, but to a lot of people my story meant that you could start small and be a success." And finance is becoming more accessible. In 2010, meetic.com founder Marc Simoncini started Jaina Capital, a €100m seed-capital fund. Similarly, Xavier Niel, the founder of French internet service provider Free/Illiad, valued at almost €5bn, cofounded KIMA Ventures -- a seed fund which invests on average in two startups a week -- with entrepreneur Jeremie Berrebi. "We always had entrepreneurs, but France was lagging behind in terms of venture capital," says Pierre Kosciusko-Morizet, one of the founders of PriceMinister and a cofounder of ISAI, a Parisian fund that regularly invests €500,000 to €1.5m in early-stage internet companies. "That has changed a lot in past three years."
Further evidence of maturity in the marketplace are events like LeWeb -- the annual conference started by Le Meur in 2004 -- and the creation of tech incubators like Le Camping, where over 40 experienced entrepreneurs mentor 12 startups for six months. "In the past ten years, the local ecosystem has changed a lot," says Rodrigo Sepúlveda Schulz (right), a serial entrepreneur and investor in both Paris and Silicon Valley. "We have founders and engineers who have worked for two or three startups and have learned the culture."
But, for all the venture capital, entrepreneurial culture and digital infrastructure, some founders are concerned that the French mindset remains risk-adverse.
Tariq Krim, founder of Netvibes and Jolicloud, says: "Few VCs are product-focused and only care about revenue and a quick exit.
We still need VCs who will tell entrepreneurs [that they want them to] disrupt the whole industry and build the next Groupon, the next Foursquare, the next Facebook."
1. Criteo
8 boulvevard des capucines
Criteo has a killer pitch: it claims that, on average, it increases the sales of any ecommerce site by 13 per cent. Using a form of online advertising called personalised retargeting, Criteo tags users' computers with a cookie when they visit an ecommerce site and tracks all the products they browse. After users leave the site, they are retargeted: personalised banner ads are displayed featuring all viewed products. With one click, users are back to the initial site they were looking at. "We act as a safety net for big ecommerce sites," says JB Rudelle, Criteo's CEO. "Retargeting has been around for many years, but we are different from the rest of the market because we personalise each banner down to the impression level. All the banners are different and unique."
Criteo creates around seven billion personalised banner ads each month, and charges advertisers only when there is a click on the ad. Founded in 2005 by CEO Rudelle, Franck Le Ouay and Romain Niccoli, Criteo signed its first client, PriceMinister, after three years developing the product. A year later it was already thinking of the US market. Today, Criteo employs 300 people, has over 20 offices worldwide - including one in Palo Alto, California - and around 1,000 clients. "We had to ask ourselves the question that many European startups ask," Rudelle says. "Do we want to be European leaders and wait for a US company to come and buy you, or do we want to be a global leader?"
2. daily motion
49 rue ganneron
Dailymotion and YouTube were both created early in 2005. In Paris, entrepreneurs Benjamin Bejbaum and Olivier Poitrey came up with the idea of creating a video-sharing platform and, a month before YouTube, registered the domain dailymotion.com. Today, Dailymotion remains the strongest YouTube challenger, according to internet-marketing research company comScore, with 110 million visitors in April. "It's impossible to beat YouTube," says CEO Cédric Tornay. "But people can easily use both YouTube and Dailymotion, like you can watch both Channel 4 and the BBC." The site has around 20 million videos in its catalogue, and some 3,000 partners around the world, including EMI, Warner, Universal, CNN and Al Jazeera. In February, France Telecom's Orange bought 49 per cent of the company for
¤58.8m. "The support will help us further differentiate ourselves, with more live events and premium content on every platform," says Tornay.
3.Total Immersion
22 Rue Eduoard, Nieuport "When we started we were perceived as some bizarre guys trying to merge the real and the virtual," says Bruno Uzzan, CEO of augmented-reality company Total Immersion. "Now augmented reality is everywhere and we are the established leader in that space."
Founded in 1999 by Uzzan and Valentin LeFrevre, Total Immersion sold its initial product to carmaker Peugeot three years later. It integrated a 3D object into a live video. "Valentin came from the defence industry, where you have these impressive simulation tools that they use to train pilots," Uzzan says. "We wanted to take all this technology and port it to a standard PC where it would be available to everybody, from gaming to marketing." Other clients include Paramount, Boeing, CNN, Nokia, McDonald's, Mattel, BMW and Coca-Cola.
4. Jolicloud "The experiences that Google and Apple provide are very limiting," says Tariq Krim. "I wanted to create a fully engaging operating system that you can install on any computer and that completely merges it with the cloud." The result is Joli OS. Launched in August 2010 and backed by $4.2m, Jolicloud now has 500,000 users.
5. Kelkoo
Price-comparison website Kelkoo launched in1999. With a presence in 11 countries, Kelkoo is the third largest ecommerce site in Europe. The company was acquired by Yahoo in 2004 for
¤475m. Kelkoo entered the US market in July 2010.
6. Wikio
Wikio, the social-media portal, managessix products, including OverBlog, the biggest blogging platform
in Europe with 20 million users, and local search engine Nomao.
The company, created in 2005, currently has revenues of $20m.
7. Withings
Withings focuses on internet-connected health-related products. It recently launched a Smart Blood Pressure Monitor, which allows you to keep track of your heart rate and blood pressure online. The company's next product is a Smart Baby Monitor.
8. Aldebaran Robotics
Nao is a 58-cm-tall humanoid robot created by Aldebaran Robotics, a startup launched in 2005 by Bruno Maissionier which now employs 80 people. Nao is being used in universities like Notre Dame as a research tool.
9. MXP4
According to Gilles Babinet (above), the future of music is interactive. Seen as the successor to MP3, MXP4 allows users to play with, remix and sing along with tracks. French DJ David Guetta has already released an iPhone app based on the MXP4 format. The next step is social-music gaming: MXP4's Pump It has one million users.
Where to meet
Head to the Right Bank of the River Seine
Quartier du Sentier, in the second arrondissement, is the hub of the entrepreneurial community in Paris. There, near the Paris Bourse (former stock exchange), you find La Cantine, the city's main coworking space. Established in 2008, it has two meeting halls and a café, and organises weekly events from developers' days to informal get-togethers for entrepreneurs.
A classier (and more expensive) alternative is the famed Café de la Paix, near the Opera, where you can also regularly meet other tech entrepreneurs.
This article was originally published by WIRED UK
