London might be Europe’s startup hub, but Paris is waiting to pounce
For a startup, one of the biggest decisions you’ll ever make is where to incorporate and build your company.
For us at Zebra Fuel – an on-demand car refuelling company – that decision was particularly difficult.
My co-founder is from France and I’m from Morocco, so our first language is French. Surely Paris, which has millions of cars, would be the best city for us to headquarter our business?
However, in June 2016, we took the decision to base ourselves in London. Here’s why.
First and foremost, we felt that it would be easier to raise the capital that we needed to get the business off the ground in London than it would be in Paris.
In 2017, VCs invested a record £2.45bn in London tech startups. That was 80 per cent of all UK venture capital funding in 2017 – and four times more than VCs invested in Parisian tech startups, that, in comparison, raised just £564.97m
There’s a high density of top VC firms and super angels physically based in London that local startups can easily access. Atomico, Balderton, Index, and Accel – the big four European VCs – all have their headquarters within a few miles of each other.
Our seed round raised $2.5m from three big name investors. If we had founded the company in France or Germany, we would have been lucky to get a single big name investor, let alone three.
Another vital element to securing any startup’s early success is talent. Basing the company in London gives us the best opportunity to access super smart individuals that can help us grow.
We’ve hired 30 people from a lot of different countries in less than two years, with one common factor; they’re based in or want to relocate to London. Many of those hires came from impressive companies like Deliveroo and Uber. Having world-leading universities like Oxford, Cambridge and London Business School on our doorstep has been brilliant too.
The other drawback with Paris is that the world’s French-speaking market is significantly smaller than for English. If we had based ourselves there, we would have probably ended up launching the company in French, ultimately sacrificing easy access to the biggest markets possible.
However, while London definitely has the advantage for now, French politicians realise that Brexit offers Paris an opportunity to leapfrog its English rival to become the premier European tech centre, second only to Silicon Valley in the US.
As the UK government pushes ahead with plans that will make it harder for European citizens to work in the UK, French President Emmanuel Macron is making it easier for tech workers to come to France.
He launched the “French Tech Visa” last June, which enables tech entrepreneurs and their families to get a residents permit in France for four years. Macron has also promised to increase the amount of funding available for tech startups and make French employment laws more flexible.
The UK government needs to be careful that Britain doesn’t rest on its laurels. For many startups, particularly those coming out of French-speaking Africa, Paris’s offer could trump London’s.
Paris is waiting to pounce if London trips up.