The Criteo connection: Why French tech startups prefer the US to EU

The success of Parisian ad tech company Criteo has a big impact on how French tech companies conduct business. More startups in France are angling their way into the U.S. where they can access a bigger market and raise more capital from venture capitalists.

At the La French Touch conference in New York City, we spoke to a few executives and politicians on the startup landscape in France. In spite of obstacles like the lack of physical presence in the U.S. and the expertise in marketing, many expressed the opinion that the U.S. is a less challenging market than Europe.

Axelle Lemarie, French Secretary of State for Digital Affairs
At this point, the biggest challenge for French tech startups is that they need more funding and access to bigger markets like the U.S. Unfortunately, the European market is fragmented. It’s also easier for them to sell to American corporates than sell to large French companies. Because, in France, there’s not enough cooperation between the older structure and the world of startups — we need more open innovation between the two.

Ed Zimmerman, angel investor and chair of Lowenstein Sandler’s tech group
Parisian startups can probably raise more funding in the U.S. [than in France]. But one challenge could be that in America, investors feel more comfortable with companies that have people on the ground, so it’s better for Parisian tech startups to build a presence here. Many Israeli companies have succeeded in the U.S. This is because Israel is such a small market. Companies have to expand to international markets immediately, and the U.S. is the logical place to go. France is a bigger market than Israel, so companies there don’t feel the urgency to expand abroad. But the success of Criteo changed their mind.

Paul-François Fournier, senior executive vice president of Bpifrance Innovation
We are getting more and more startups. Last year, we financed around 3,000 French startups, almost doubled from two years ago. The challenge for us to follow the Criteo model is we need to find more engineering talent and spend time creating an ecosystem where French companies can have the resources and access to the U.S. market. Another challenge is the French are more “doers” than “marketers.” We have good engineers, but we need more expertise in marketing and business development when we enter into the U.S. market.

Charles-Albert Gorra, co-founder and CEO for Rebagg
There are lots of frictions in European e-commerce like shipping flows and international taxes. You can become a big player in one country, but you can hardly become a leader in multiple countries. In comparison, the U.S. is a unified market that probably equals the size of — or even bigger than — many European countries aggregated.

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