It was announced today that Article 50 will be triggered on March 29th. I recently wrote about Berlin’s potential to become fintech capital of the world after Brexit, but with French officials in London scouting finance and technology companies, Paris could become the hotspot for startups.
Vice President of the Paris Region Othman Nasrou arrived in London today as part of France’s attempt to encourage British fintech businesses that may be affected by Brexit to move to the capital. Without passporting rights, many businesses may have to set up subsidiaries in other European countries, which is why last month, French senior lobbyists and politicians started to woo companies in the same way Nasrou is, according to Business Insider.
At the start of this year, French digital minister Axelle Lemaire did the same and in a recent interview with Business Insider, she highlighted how although British startup investment fell, investment in French technology has soared by 71% from January to September in 2016. “In the third quarter of 2016 alone, funding obtained by French startups reached €857 million ($921 million), double the amount invested in Germany and almost equaling the €919 million ($988 million) invested in the UK,” Lemaire said.
These investment figures from last year suggest that Paris has more of a chance of becoming a top fintech center in comparison to Berlin, Frankfurt or Hamburg. However, Lemaire explains that the “goal should be to create real European champions and not to focus on a narrow competition between European states.” Alongside this, Paris is not the only city or town with potential to become financial centers, as Lemaire states and has shown with her launch of 13 French tech metropoles in cities like Montpellier, Bordeaux, Grenoble, and Lille.
Initiatives like these are not uncommon in France, especially with the launch of Le French Tech in 2013, that promotes successful startups in the country. It was announced today that startup accelerator Techstars will launch in Paris in partnership with Partech Ventures, for example. The program will be placed in Partech Venture’s startup campus Partech Shaker and managing director Marie Raichvarg believes that “hosting Techstars at the Partech Shaker is in line with our approach of creating an international entrepreneurial ecosystem in the heart of Paris,” according to VentureBeat.
It’s evident that France is tenacious and is moving in all the right directions in order to enhance technology and transform what the country knows of finance today. French fintech Lemon Way is going after Stripe in the e-commerce payments arena with the launch of the payments service across France, Germany, Spain, Italy and the Benelux region. With help from Google’s artificial intelligence solutions, Lemon Way’s aim is to provide an automated, fast and competitively priced solution. Interestingly, the fintech was set up near Paris in Montreuil in 2007 and has an office in London, as well as in Munich, Dakar, Barcelona and Turin.
Real time electronic payments provider ACI Worldwide also announced at the end of last month that French company PSP would be targeting the SME market with the ACI PAY.ON Payments Gateway, with the goal of expanding internationally. As said before, in my opinion, growth is what France is interested in and by partnering, collaborating and using Brexit as an opportunity, companies like these and the fintech industry in general, is likely to excel.
This year’s Paris Fintech Forum saw French Minister of Economy and Finance Michel Sapin speak about how the country can support fintech startups with regulation and fiscal policy, according to Crowdfund Insider. In addition to these comments, Francois Villeroy de Calhau, Governor of Banque de France and head of financial regulator, Autorité de Contrôle Prudentiel et de Résolution, spoke about providing a “stable, reliable and agile regulation. There is no tradeoff between innovation and security, they go together to build trust,” he said.
It is important to note how interesting all of this action is being taken so close to the time Brexit was in the process of being triggered. Poaching UK business post-Brexit is not being done in a malicious way, of course, as I believe these assurances around regulations need to be made so that fintechs in London can start planning if lack of passporting makes a big impact on business. On the other hand, passporting is just one aspect of what entering a single market could mean for fintech and it questions whether fintechs should set up in other European countries just in case.
I cannot write about French technology without mentioning Station F, soon-to-be-opened startup mega-campus that has been hailed as the world’s largest incubator. Many global startups have already applied for their Founders Program ahead of the April opening date and housing these technology companies is sure to be beneficial for Paris-based financial institutions, because of the proximity and potential for easy collaboration.
At a London rally, French presidential candidate and millennial favorite Emmanuel Macron sparked interest by voicing his concerns about post-Brexit Britain, according to The Telegraph. Macron urged “banks, talents, researchers, academics” to return to France and “come back as entrepreneurs, to do business, innovate, create, research, teach.” Will the French follow this advice? If yes, what will happen to the UK and London fintech?