Michel Combes, the French Tech ATM

The case will have been handled without any problems. In spring 2021, Michel Combes, chairman of SoftBank International Group, is surprised that the powerful Japanese technology investment fund is not present in France. Masayoshi Son, founder of SoftBank, then encourages him to go feel the tricolor unicorns’ necks. Said and done, Michel Combes organizes a lightning trip to Paris in June with Marcelo Claure, another big shot in the group, and asks his friend Frédéric Mazzella (founder of BlaBlaCar) to introduce him to the cream of French tech entrepreneurs. A real headache to set up because the VivaTech Lounge is in full swing and start-up bosses’ diaries have been full of business meetings for weeks.

But when it’s Michel Combes who asks you, it’s worth getting in the way of your plans. Entrepreneurs collective The Galion Project strives to gather the cream of the crop for a meal on the terrace of a loft in the 10th arrondissement. A revolutionary dinner for the French scene. In the months that followed, the Japanese group held a series of fundraisers that caused quite a stir: €175 million for Swile, €178 million for Vestiaire Collective, €580 million for Sorare… “With SoftBank, fundraising gained a new dimension”, rejoices the president of Galion, Agathe Wautier.

Since then, Michel Combes has been the darling of French Tech. But it’s not just here that SoftBank’s new No. 2 is known as the white wolf. The French manages all activities (solar, cybersecurity, etc.) located outside the scope of the Vision Fund, the investment fund led by Masayoshi Son. And since the departure of his acolyte Marcelo Claure, he is also the one who takes care, alone, of SoftBank’s entire portfolio of assets in Latin America. “Marcelo had the gift of seeing that there was fertile ground for very high-quality entrepreneurs and that they lacked capital”, confides the French leader. SoftBank is now the region’s leading technology fund and has raised around fifteen unicorns in the region.

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A role of “Santa Claus” that contrasts with Michel Combes’ previous life. In 1986, the Frenchman started in the telecommunications sector and, in addition to some brief forays into the ministerial office and the tour operator Nouvelles Frontières, he spent his entire career there, linking up positions of responsibility with operators (France Télécom, TDF, Vodafone, etc. ). “Telecommunications are the lifeblood of the global economy. I had the pleasure of joining a cutting-edge industry in technology and in full transformation”, explains Michel Combes. However, it took a strong heart to keep up with the radical developments in the industry.

The professional “Telcos”

“Up until the mid-2000s, it was a boom period with a simultaneous increase in the number of customers and average revenue per user,” says Thibaud Chabrelié, partner at Bain & Company. But then, the turning point of austerity takes shape. In Europe, competition is fierce and in France, the arrival of Free is shaking up players locally. The EU has encouraged the emergence of a multitude of operators to lower prices. The other side of the coin is that European telecommunications is much more fragmented than on the other side of the Atlantic (100 operators in the EU versus three in the United States), while this type of company needs large fleets of subscribers to amortize its expensive infrastructure.

These questions, Michel Combes was often confronted. In 2013, he took over the reins of Alcatel-Lucent, then in crisis after a poorly orchestrated merger. The French launches a radical transformation plan called Shift. On the menu are delicate trade-offs, such as dropping the wing on 2G and 3G products in favor of 4G, but also relentless cuts in the workforce (10,000 jobs cut worldwide). The sequence ends with the merger of Alcatel-Lucent with the Finnish Nokia, and the departure of “cost killer” to other horizons, as soon as the ink on the business dries.

“We thought that Michel Combes had a real industrial project for the group. The employees, therefore, were disappointed to understand, after the fact, that he had only come to make his bride prettier”, recalls Olivier Marcé, union leader CFE-CGC. . The epilogue is even scarier, as after having imposed a radical austerity cure on Alcatel, the Frenchman is set to receive a very juicy severance bonus (14 million euros in shares and stock options). Trade unionists are furious, Medef himself is moved by the case. Michel Combes eventually agrees to cut his package in half.

Despite the controversy, the Frenchman can boast of having taken Alcatel-Lucent out of the rut. “The company that burned a billion euros in cash in 2012 generated 600 million in 2015,” recalls his friend Jean Raby, then the group’s CFO. Philippe Oddo, managing partner at Oddo BHF who also knows French well, agrees: “He saved Alcatel, the company was practically bankrupt.” The experience will be far less conclusive for Michel Combes at Numericable-SFR, which he assumes the presidency of in 2015. In 2017, the company’s results disappoint as much as they worry, as SFR continues to lose subscribers. A situation that quickly upsets shareholders. Several executives close to Michel Combes are invited to pack their bags. The departure of the latter, who no longer smells of holiness, is soon to follow.

But he recovers quickly. “Masa”, founder of SoftBank, calls it the birthplace of a colossal merger: that of the American Sprint (of which the Japanese own 85%) with T-Mobile. “It was simultaneously necessary to manage the company, negotiate the merger, move through the maze of regulatory authorizations while preserving Sprint’s options in case the merger didn’t work out”, says Michel Combes. After two years of hard work in Kansas City, Missouri, the Frenchman gets what he wants.

Your father’s suit the rigor

He then joined SoftBank, where he continued to score points with the WeWork file. After being the rising star of American technology, the company has just announced a wave of brutal layoffs (2,400 people). Called to his side, Michel Combes is once again the “cleaner” and restores order to the company’s finances. A shock treatment, but one that puts the patient on his feet: the company has already gone public and should show positive cash flow next year.

Michel Combes’ new life has since continued to unfold at 100 per hour. When we got to know him, he planned to give himself a free night to listen to his wife, pianist Christie Julien, who plays at the Champs-Elysées theater. animal carnival from Saint-Saens. Although he spends his weeks between New York and Miami, his schedule doesn’t allow him to stroll around Manhattan or sunbathe under the palm trees. “He’s meticulously organized and doesn’t get distracted, which allows him to fit two days into one,” says Loïc Soubeyrand, CEO of Swile.

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Michel Combes’ “telco” experience also gives him the tools to advance through the technology asset management jungle. Centered on subscription, the economic model of operators ends up being very close to that of digital companies (they speak the same language based on “Arpu” and “customer acquisition cost”). “Few investors have his CEO experience”, also argues his friend Frédéric Mazzella. Having held these positions helps Michel Combes identify and advise high-potential entrepreneurs. It will have to mobilize all its capabilities for the next period that promises to be difficult: while in 2020 SoftBank made record profits (37.5 billion euros), the group has just announced a historic loss (12.5 billion euros) for the financial year of 2021. The captain of the industry will have to bring his “fatherly strict” clothes.


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