Jump to content
  • Guest
    Guest

    Sign in to follow this  

    Europe Fintech Scene: Paris vs London – who wins?

    The competition for the top tech spot is fierce in Europe right now. The Parisian start-up scene has been growing drastically in the last few years, but the advantage remains with London which is already celebrating a record year for investment in 2017. There are two reasons for Paris to challenge London’s lead: the winning combination of a successful Fintech universe with highly qualified professionals moving from the City Of London; and the entrepreneurial spirit which makes it a magnet for international talents and investors.

     

    The Paris tech scene has done remarkably well in 2016, almost catching up with London with a record €2.9 billion invested in the French-Tech (+80% yoy) versus €3.5 billion for British start-ups. Government policies and investments in infrastructure paid off: the bureaucracy around setting up companies has been simplified, generous tax breaks on R&D drove down the cost of labour in the tech sector, and the BPI (Banque Publique d’Investissement) a mostly government funded investment fund invested approximately 2 billion in start-ups over the last few years. Last but not least, billionaire Xavier Niels has been an excellent PR for promoting Paris, and he opened the world’s largest incubator: Station F last year. As expected, this significant effort favoured a huge wave of young local entrepreneurs, and 2016 was their coronation year.

     

    The London tech scene, on the other hand, is more mature than Paris as demonstrated by the valuations of successful exits in 2016, £41 billion in the UK versus €3 billion in France. The success of London is built on two pillars: first, the City of London with its technical complexity and its huge international talent pool. The investment and finance industry has been in constant change and restructuring during the past 9 years. This has created opportunities. In 2016, 22% percent of investments in British start-ups were made in the Fintech sector versus 7% in France. This is just the tip of the iceberg as many professionals move on from the financial sectors to tech start-ups operating outside of the Fintech industry. The second pillar is the SEIS program offering huge tax reliefs to angel investors. The second pillar is the SEIS program offering huge tax reliefs to angel investors and hence making it easier to get a first seed in start-ups. As of 2016, the UK had 16,000 registered angel investors versus 8000 in France.

     

    It’s fair to say that the French way is substantially based on government investments, the BPI alone accounts for about 25% of investments in French Start-ups. The British system, as described above relies more on incentivising private investors with significant tax relief; a minimum of 50% of the money invested and when remaining invested for 3 years no capital gain tax. Both amount to the government providing a financial boost but each lead to different outcomes. This is not new, French capitalism has always worked this way, and the government has always seen the return on its investments with a high number top-notch global companies. On the downside, capital gain taxes (among others) are higher in France than anywhere else in Europe, and from a foreign entrepreneur perspective, getting into the public investment programmes requires networking, understanding of the bureaucracy, administration, and local culture even though you can apply in English. In other words, a foreign entrepreneur coming to France meets the inconvenience first and the advantages later. For as long as we live in an open world, I believe these drawbacks will always give London the edge over Paris.

     

    To conclude the Paris vs London debate: the key to success is in international talent. London wins for now.



    Sign in to follow this  

    Share this  

    Member Feedback

    Recommended Comments

    There are no comments to display.


  • Our picks

    • I've been trying to track down details on that statement from the CBI, but I'm not sure they elaborated on what the "unintended consequences" could be - I assume one could be wage inflation due to reduction in the negotiation advantage of the employer.
       
      Whether this is a bad thing is debatable when (by some measures) wage growth has been stagnant in the UK for longer than any time since the Napoleonic wars..
       
      Reality Check: Is pay growth the worst since Napoleon?
      WWW.BBC.CO.UK Reality Check examines the claim that real-wage growth is at its worst since the 18th Century.  
    • How do we solve the the Asset Management industry issues of today and tomorrow?
       
      We think we might just have the answer.
       
      When we created AlgoMe, we set out to empower professionals so they can manage their careers through technology, data and industry insight. With our career management platform, we‘ve delivered this but we know there‘s much more to be done.
       
      The Asset Management industry is in a state of flux. Right now lower fees, higher costs, new technology and increasing regulation, along with changes to the workforce, mean we need access to technology, data and industry insight more than ever before. This is why we‘re taking an exciting step by opening AlgoMe Community, the place that brings the Asset Management industry together to drive open conversation and essential innovation.
       
      AlgoMe Community is a members-only community exclusive to the industry and associated professions.
       
      Membership is free, members are verified and use their own names to create a profile – here are the key benefits:
       
      1. A community for Asset Management
      We have created a standalone space for asset managers meaning discussions and groups are centred around highly relevant areas and get to the heart of issues quickly. We will also be hosting regular events both online and offline to address industry challenges and help our members drive the agenda.
       
      2. Keep your finger on the pulse
      Not sure about Brexit or SMCR? Want to know what the latest research on AI is? The AlgoMe Community gives you direct access to all of these discussions. AlgoMe is working with a number of partner organisations to bring you the latest thought leadership, insights, blog posts and white papers to keep you abreast of the latest trends in Asset Management.
       
      3. Grow Your connections outside of your existing network
      There are a lot of bright minds out there. Over 40,000* people are currently working within the Asset Management industry according to the Investment Association. This number is likely to be 200k+ across Europe with the firms and organisations that make up Asset Management ecosystem. That’s a lot of new connections to make.
       
      4. Grow your personal brand
      Building your personal brand is critical to a successful career. AlgoMe Community gives you a platform to build your credibility and authority among your peers. It’s also easy to start your own blog to get ideas a wider audience and build up a following of other members.
       
      Join AlgoMe Community for free today and connect with the Asset Management industry.
        • Like
      • 0 replies
    • Revolt announced it will be offering ETFs to its customers....
      http://igniteseurope.com/c/2090843/247783/revolut_offering_bound_appeal_investors?referrer_module=emailMorningNews&module_order=3&code=WTI5c2FXNHVibWRBWVd4bmIyMWxMbU52YlN3Z01UQTROemN5TURRc0lERXlNVFV4TkRjMk5EWT0
      • 2 replies
  • Welcome to AlgoMe Community

    Join the community connecting the Investment Management industry and get access to insights, discussions and events.

    Sign up for free today.

  • Categories

  • Similar Content

    • Andy Milner
      By Andy Milner
      According to this year's UBS Global Real Estate Bubble Index, the risk of a bubble in the London housing market has declined for the 2nd year running, due to a cocktail of factors such as inflation, unaffordability and political uncertainty.
       
      Although this is some good news, I fear that it doesn't necessarily correlate with a decreased likely hood of a market crash, which would be the more interesting, although admittedly a lot harder, aspect to measure.
       
      UBS Global Real Estate Bubble Index 2018
      WWW.UBS.COM UBS Global Real Estate Bubble Index 2018 - https://www.ubs.com/global/en/wealth-management/chief-investment-office/our-research/life-goals.html  
    • Andy Milner
      By Andy Milner
      Looking for the next big thing in tech? How about premier access the startup everyone’s talking about? Or simply want to explore everything this startup scene has to offer? Whether you’re an investor, member of the press, user, developer, job seeker, corporate or someone in between, attending TechDay gives you an exclusive look into today’s latest and greatest tech with direct access to the startups & partners making it all happen.
       
      TechDay London - Home
      TECHDAYHQ.COM    
    • Luuk Jacobs
      By Luuk Jacobs
      The business world has changed enormously. 
       
      In the 25 years before the recent financial crisis there was a stable period where businesses could rely on predictable models for business planning. Although past performance was not a guarantee, business planning was often based on the last four year performance being extrapolated into the next three to five year business planning. 

      Then ten years ago, everything changed.  In the aftermath of the financial crisis, we are still experiencing instability and the digital age has fully kicked in too with Fintech, AI and blockchain currently at the forefront.
       
      The Financial Services industry is being challenged, especially in its own services to clients by the many disrupters which have sprung. They often succeed in a short period taking significant market share. For example, TransferWise, which created a successful business by addressing the large fees for (foreign) currency transfers, is now looking at a >$1Bn market valuation.
       
      What can the established companies learn from these disrupters and apply to their businesses before they are eaten or cannibalised?
      It is not merely creating incubators in funky office spaces to (or trying to) develop in-house new technologies. Neither can an organisation simply buy and implement the newest IT technology out of the box.
       
      So, what is the secret? Cap Gemini research has demonstrated that companies which invested in digital infrastructure without investing in transformational leadership to support new processes, actually became on average 11% less profitable.
       
      Perhaps the secret lies in creating a digital culture? Research from Brilliant Noise has highlighted four culture characteristics which are succeeding in the digital era.
       
      Be Customer Centric
      The old way of doing business by pushing products and services to clients no longer works. Neither is it about doing better what the company does today, it is more about what the client wants and how they could be better served. Pull in the ideas from the market and respond to what customers need and deliver in a way the customer wants through technology and give it a personal touch.
       
      Be Networked
      The classic hierarchical set up of companies does not support a world where internal and external networks and connections spark ideas and innovation and gets things done faster. In organisations which have open networks of interconnected people, information and ideas will flow quicker, opportunities responded to faster and decision making more rapid. All of these are essential to be able to move to market in the most agile way.
       
      Be Biased for Action
      Many companies still operate based upon getting permission and reach consensus before decision and action is taken. If a culture changes to one of bias towards action, companies can lean forward into the future instead of being pulled back or waiting till blessing is given. The appetite is there. Employees do want to participate more therefore managers and leaders need to create the conditions for action and move out of the way. The likes of Apple and Google are considered champions in this and have integrated this in their DNA. Still leaders set out direction of travel but then hand ownership to their people.
       
      Be Purpose Driven
      Companies spend much time on setting out their mission and vision, few however also state their purpose and even fewer make that purpose one that resonates with employees and customers. The big driver these days remains the return for the shareholder instead of a clear sense of purpose into everything a company does. However, the company should be aligned with its customers.
       
      These four characteristics are definitely key when it comes to digital, and Peter Drucker’s quote “Culture eats strategy for breakfast” is even more pertinent.
×

We use cookies to give you the best possible experience. If you continue, we’ll assume you are happy with this. For further information, see our Privacy Policy.