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Uber riots to innovation: France’s bid for tech stardom

Burning tires, riots, blocked roads. These were the scenes last year when French taxi drivers protested against U.S. ride-hailing app Uber.

The incidents did little to help shake off the long-standing image of France as a hotbed if anti-innovation. But look a little closer, and the picture is very different.

"France is pretty bad at communication on innovation. Often the French are stigmatized by strikes, which we tend to be seen as the champions for, and it becomes a cliché," Nicolas Brusson, the co-founder of long-distance ride sharing start-up BlaBlaCar, one of Europe's star start-ups currently valued over $1 billion, told CNBC by phone.


'Rebirth'

In recent times France has managed to attract an increasing amount of tech investment. In 2015, French start-ups raised 960 million euros ($1.08 billion), up from 862 million euros in 2014, according to data from Tech.eu, a technology publication and research body.

Some of the biggest deals last year included a $200 million round for BlaBlaCar and $110 million in funding for music streaming service Deezer.

And venture capital (VC) firms have been happy to jump into the country.

"I came back to Europe in 2011 after spending a significant amount of time in the Valley. One of the things that brought me back was that I really thought the ecosystem in Europe was really emerging and this was something very interesting. It felt I was witnessing the rebirth of the ecosystem," Phillipe Botteri, a partner at top pan-European VC firm Accel, told CNBC in a phone interview.

Accel, often seen as a key investor to have on board by start-ups, has invested in the likes of Showroomprive and BlaBlaCar in France.

"France is the number two country after the U.K. where we deploy the most capital. I think France is a very attractive market for venture and if I look at the overall trend of European tech, it has been growing, and France has been growing faster," Botteri said, adding that Accel has invested about $150 million in the past few years in French start-ups.

'Positive politics'

Still, there are some French regulations that still bug start-ups. One of the most complained-about is "social charges," where, for example, companies have to pay for health benefits of people they hire. This can mean the capital that would be used on hiring another person would need to be spent on an existing employee. But the government has introduced a tax credit scheme to try to reduce this.

And France's government has been trying hard to shake off the negative image of the country and introduce new laws to foster its digital economy.

Last year, lawmakers drafted the Digital Republic Bill, and opened it up for the public to add comments and annotations to it online.

A taxi drives past burning tires during a national protest against car-sharing service Uber in Nice, France, June 25, 2015.
Jean-Pierre Amet | Reuters
A taxi drives past burning tires during a national protest against car-sharing service Uber in Nice, France, June 25, 2015.

"It was the first time in France, and probably the first time in Europe, which we co-built the bill with online citizens," Axelle Lemaire, the minister of state for digital affairs in France who spearheaded the bill, told CNBC in a phone interview.

The lawmaker said that over 8,000 people wrote contributions and 80 changes were made with five new articles added to the bill.

"This is positive. We are trying to find ways to reconnecting with the citizens and younger people who are not interested in politics or tempted to look at more extremist solutions, it's a positive sign and positive way of doing politics," Lemaire said.

Some of the key proposals include opening up public data that start-ups can use when they are building products, new protection for "ethical hackers" that manage to hack companies and tell them about it and a legal status for e-sports gamers.


'Difficult fight'

Start-ups are also finding that they are able to get the talent needed to become a global business. BlaBlaCar's Brusson said that the company never struggles to find developers and that people from top universities now want to join start-ups.

"I remember 15 years ago going into a startup was not a career path. Today we recruit people from top schools and students who would work for the Goldman Sachs of this world," Brusson said.

But for all the progress within France, it still has an image problem, something that Lemaire admits but says is slowly changing.

"It's a difficult fight. There was one debate during the between Donald Trump and another Republican and Trump referred to France as underworking people. It's a popular image that seems to be very well rooted in the minds of some people but it's changing," Lemaire told CNBC.

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