The Startup Nation: a colossus with feet of clay?

Employment and social policies

May 03, 2022 • Sandrine Gorreri

Emmanuel Macron made developing a “Start-up Nation” a strong focus of his first term. In addition, he had declared in 2021: “We have been the first European nation in digital and technology for two years. We must therefore continue to invest in and encourage these initiatives, which have created more than 160,000 jobs. (Climbing Europe, June 2021). France is effectively succeeding in attracting more and more companies to the closed club of unicorns, those companies valued at more than $1 billion. While the reconquest of our economic sovereignty depends on strong companies capable of mastering the technologies of tomorrow, creating jobs and conquering markets, the challenge is to encourage investment in these companies, especially in the most risky, priming. The numbers show us that we have to go further.

A record number of new registrations, but new companies are not creating enough jobs

In 2020, and despite the health and economic crisis, France set a new business creation record, with almost one million new registrations. For the full year 2021, the number of business creations was 995,868, an increase of 17.4% over 2020, setting a new all-time high.

Unlike 2020, where the creation of micro-enterprises contributed exclusively to the increase, the creation of companies also raises the statistics in 2021. The effects of confinement, the increase in online sales or the restructuring of companies in the face of the crisis contributed to this spectacular progress. Measures to simplify and improve the micro-enterprise regime have also boosted business creation.

The only downside, in 2021, as in previous years, a small minority of companies are employers from the start: 2% of new companies employ at least one employee at the time of their creation, according to INSEE. Excluding micro-entrepreneurs, the proportion of companies that employ start-ups is 6%. Employing companies at the time of their creation in 2021 start their activity with 2.9 employees on average, compared to 3.0 in 2020.

Deal creations (in thousands) by status






micro companies






Individual companies












Source: INSE

And the Startup Nation?

The expression remains linked to the presidency of Emmanuel Macron who surrendered very quickly after his election at the Vivatech Hall. Start-Up Nation is a country capable of producing high-growth companies, which can become unicorns in a few years, that is, representing a capitalization of more than 1 billion dollars, entirely financed by private capital, not quoted in the markets. financial . These companies intend to irrigate the entire territory with wealth and employment, in the words of the President of the Republic.

France occupies a place of honor in terms of the creation of high-growth companies (companies whose average annual growth exceeds 20% per year over a period of three years): they represent 11.6% of companies active in at least 10 employees. It is in terms of job creation that France is lagging behind: these high-growth companies account for 9.8% of total employment in active companies with more than 10 employees, but already 13.7% in Germany and 21.54 % in the UK (source Eurostat, 2018 figures). French companies therefore find it difficult to develop.

The startups that grow represent only a small fraction of all startups. However, it is the rapid growth of a small number of high-performing start-ups that is driving overall job creation. We understand then that the French economy needs a greater number of its start-ups that follow the path of Unicorns capable of stimulating the generation of jobs. But these disruptive projects require large volumes of private investment, French or foreign.

In the United States, start-ups receive an average of 8.3 times more seed funding, thanks to the abundance of private funds. This results after 10 years in an average number of employees per start-up doubled compared to European start-ups. Access to finance is therefore critical.

Collection? Venture capital investments? where is france

According to the EY venture capital barometer, in 2021, 11.6 billion were raised for 784 operations. If we compare ourselves at the European level, the UK remains well ahead with 32.4 billion euros in funds raised, including US$ 15.36 billion dedicated to venture capital operations. France, which aspired to take the 2ndand place lags behind Germany is overtaken: Germany totals $16.21 billion, including $7.18 billion dedicated to venture capital. And France, with $11.57 billion, including $6.60 billion for venture capital, is ahead of the Netherlands and Sweden. Despite the 2020 crisis, the start-up financial ecosystem has held up very well.

Another sign, France has more than twenty unicorns (26 according to the most recent figures) while in 2017 it had only 3. Unicorns are companies that represent a capitalization of more than 1 billion dollars. Among these digital gems are: Doctolib, Backmarket, ManoMano or Blablacar for the best-known names in the general public. More exotic startups are also on this list, such as Sorare, which raised the highest collection in 2021 with 580 million raised for the company specializing in NFT cards in the football world.

However, there are some nuances. According to the website, behind the solidity of French investors and unicorns, the study of the distribution of seed rounds in 2020 shows that seed rounds are the ones that fell the most (-21%). According to Eurazeo, the number of seed funding rounds was stable in 2021 (227 operations against 230 in 2020) but the amounts collected in this investment phase fell: 326 million in 2021, against 381 million in the previous year.

Even the numbers of Bpifrance, presented as an active investor in the seed segment, remain modest: the public operator that financed, through its Digital Venture activity, 113 young French start-ups, series A and B. amounts were allocated to deeptechs, representing 720 million assets under management, for an activity launched in 2011. However, in ten years, BpifranceDigital Venture sold 21 shares for a total value of 1.9 billion euros.

Inadequate seed funding numbers therefore pose a threat to the future development of new unicorns. The favorable environment should also remain in a financial context that promises to be more turbulent in the coming months (rate hikes, withdrawal of liquidity from the ECB, halt in economic growth, stock market volatility, etc.)

In this context, our incentive systems must support a favorable environment for sowing to consolidate the sector. In 2014, iFRAP aspired to a target of €4 billion a year in private seed investment. We must do even more. in our study “Double savings for business creation”, we recalled the importance of taxation of investments and capital gains, which should allow the reinvestment of savings in the economy at risk. The iFRAP Foundation proposes three measures to encourage Business Angels: reinforce the IR-SME measure by increasing the reduction to 30%, introduce a tax exemption for capital gains up to 10 million euros and an IFI-SME based on the ISF-SME model.


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