Radar of French cybersecurity startup 2022 How to accelerate ecosystem growth?
In the current context, cybersecurity is more than ever a major strategic issue. The conflict between Russia and Ukraine reinforced the need for the creation of cybersecurity champions to guarantee Europe’s sovereignty and strategic independence. The innovation ecosystem plays a clear role in achieving this goal and shows the first positive results. But how to speed up? Wavestone identified with its partners in this study two main levers, each of which was detailed and explained during the round table.
The ecosystem of startups is stable, self-renewing …
160 startups specializing in cybersecurity were counted in 2022 (150 in 2021). Although the ecosystem is relatively dynamically renewing itself (21 startups have been created since January 2021), many startups are not scaling up (13 exits were mentioned in 2022 for this reason).
… And speeds up the making of scale-ups
The ecosystem is gradually maturing. It provides more and more scale-ups (11 in 2021 compared to 23 in 2022), and in a remarkable way the first cybersecurity unicorn on the market: Ledger. We should also note one big acquisition: Ubble’s British solution for payment solutions, Checkout.com, a witness to the attractiveness of French cybersecurity know-how.
“The French ecosystem confirms its dynamism, its richness and its solidity, both for start-ups and for scale-ups. The next challenges are to be more impactful in terms of innovation and international development to compete with other ecosystems. ”Gérôme BILLOIS, Wavestone
A weakness in change
We found that 61% of the start-ups we suspected had re-invented current solutions, without bringing in any obvious innovations. This is particularly explained by the fact that many startup founders act separately on the research and development side: only 22% of them are linked to research laboratories, and only 16% are engaged. private sector relations. However, startups have suggested concrete and positive innovations, especially in data protection and communication security. More and more significant fundraising The amount of fundraising has increased six times since last year (€ 100m in 2021 compared to € 630m in 2022). If the Ledger effect (330 million) is to be considered, it is reasonable to say that the ecosystem is gaining huge momentum in terms of investment.
Clearly, France is still showing a strong margin of growth compared to the American champions (≈ € 14bn) and Israelis (€ 1.6bn), but also compared to our British neighbors (€ 900m) .
The French and European ecosystems are undergoing profound change Over the past two years, France has launched several initiatives to revitalize the ecosystem as part of the State recovery plan for cybersecurity (€ 1bn). An important part of this plan is directly aimed at change (the section “investments for the future” now included in France 2030).
• A certain strengthening of the ecosystem enriched by successful companies and entrepreneurs, which not only shows the way to new entrants, but sometimes directly supports them.
• The launch of Cyber Campus and new start-up support systems (e.g. the Cyber Booster or the future cyber accelerator). It also makes it possible for the campus to host cross-sectoral and multi-actor projects, mixing academic and industrial and thus fostering innovative thinking and processes.
• The implementation of the Grand Défi Cyber de France 2030 (formerly PIA), which aims to bring the public and private sectors closer around cyber
• The creation of a cyber observatory, led by the General Secretariat for Investment (SGPI), which regularly publishes a list of strategic topics and related competitions to boost innovation.
“Having in France a mature and efficient cybersecurity ecosystem is a sine qua non for the success of the country’s digital transformation. In France 2030, the State is giving itself a way to support cyber actors of all sizes. »Georges-Etienne FAURE, Director of the Digital Program at the General Secretariat for Investment.
How can it be even faster to speed up the arrival of cyber champions? To answer this question, Wavestone launched a dedicated group working with key players in the cyber ecosystem: Bpifrance, France Digitale, Campus Cyber, and the General Secretariat for Investment. This group conducted interviews with the French innovation ecosystem to obtain answers (investors, public actors, researchers, entrepreneurs, support structures).
The obstacles identified are real and known for a long time: a fragmented market in Europe, difficulties in exporting abroad, difficulties in innovation, a lack of ambition among business creators, problems associated in human resources (recruitment, lack of business development skills, etc.), investors and industrialists are wary in terms of investment faced with the difficulties of exiting the cyber field … ”The emergence of unicorns in cybersecurity will go through a structure and perspective in Europe, both at the market level rather than investment. », William Lecat.
Some of the solutions to these problems have been known for a long time and many players (incubators, support structures, etc.) are already taking action to overcome them: refining their value proposition and pitching skills, facilitating using its solution, addressing its customers as quickly as possible, and relying on its attractiveness as a start-up to recruit … It is important to join these structures, and preferably with new ones innovator and expert in cyber.
“The emergence of European cyber champions will first depend on the ability of startups to find a market. For a startup, it is better to have a full order book, to learn and grow with its customers, than to receive subsidies.In this regard, European states have an important role to play in a truly European public technology order, in the American DARPA model.Marianne Tordeux-Bitker, France Digitale
To go further, the working group has identified additional steps, taking advantage of the evolution of the current situation.
• For entrepreneurs: take advantage of the newly created ecosystem to quickly validate your innovation, be ambitious both in international development: feel free to join international incubators, go immediately to test your ideas and the your market abroad, and choose the right way to grow (depending on the level of innovation of its products and the target market, the paths should not be the same).
“If for a very clear majority of startups it is important to quickly pass the course of internationalization; for others, offering critical technologies or components, it is desirable to have a venture capital ecosystem and solid collaboration adapted to their stage of maturity, at the French and European level ”Téodora ENE, Bpifrance
• For the ecosystem: there is an immediate need to simplify access to the European market, and this is possible thanks to the concrete actions of networking, decryption, labeling carried out by new players in cyber innovation. Strengthening the preference in purchases as defended in the “Buy European Tech Act” project is also key. On the investment side, increased power is needed to compete with the United States and pass on better communication with investors, greater transparency in control processes for exports and foreign investment, but also through encouraging the creation of large European cyber funds.
“By bringing together ecosystem actors (startups, large groups, researchers, etc.), we will be more resilient to protect our society, develop our economy and promote French efficiency” Yann Bonnet, Deputy General Manager, Campus Internet.
All the players who worked on this study, Bpifrance, France Digitale, the Cyber Campus, the General Secretariat for Investment and Wavestone are currently working to implement these measures, each of within their respective scopes and to accelerate the development of the cybersecurity ecosystem of change.
Strategy and selection criteria for startups and scale-ups
Startups and scale-ups must have headquarters in France and the sale of security products must represent at least 50% of their turnover.
Startups have less than 7 years of existence and the number of employees is less than 35.
Scale-ups, on the other hand, must meet one of the following three conditions:
• or received funding for 3 years through fundraising of at least € 10M
• may have a turnover of between 2.5M € and 5M € and annual turnover growth of more than 50% over the last 3 financial years
• may have a turnover of more than € 5 million and annual turnover growth of more than 25% over the last 3 financial years
Our numbers stopped on 01/06/2022.
This study is also based on qualitative interviews with most of the startups present on this radar and players in the innovation sector.
About France 2030
France 2030 investment plan:
• Reflects a dual ambition: to sustain the transformation of key sectors of our economy (energy, automotive, aeronautics or even space) through technological change, and to position France not only as a player, but as a leader in world of tomorrow. From basic research, to the emergence of an idea, to the manufacture of a new product or service, France 2030 supports the entire life cycle of change until its industrialization.
• Unparalleled in its size: € 54 billion is invested so that our companies, our universities, our research organizations, can fully succeed in their transitions into these strategic sectors. The challenge: to enable them to respond in a competitive way to the ecological and attractiveness challenges of the coming world, and to bring out the future leaders of our sectors of excellence. France 2030 is defined by two cross-cutting goals consisting of allocating 50% of its spending to economic decarbonization, and 50% to emerging players, carriers of innovation without undesirable environmental spending. (in the sense of the Do No principle). Big destruction).
• Collectively implemented: designed and disseminated in consultation with economic, academic, local and European players to determine its strategic orientations and key actions. Project leaders are invited to submit their file through open, demanding and selective procedures to benefit from State support.
• Managed by the General Secretariat for Investment on behalf of the Prime Minister and implemented by the Ecological Transition Agency (ADEME), National Research Agency (ANR), Bpifrance, Public Bank of investment and Caisse des Dépôts et Consignations (CDC).