Paris has turned into a seriously impressive tech startup ecosystem.
According to figures from VC firm Atomico, France had more investment than Germany last year.
VCs invested $2.7 billion (£2 billion) in France last year, compared with $2.1 billion (£1.6 billion) in Germany.
The UK still leads European investment with $3.7 billion (£4.7 billion).
You can see from Atomico's graphs that investment in France exploded between 2015 and 2016, and that it grew faster than other challenger countries Sweden, Spain, and the Netherlands.
Germany and the UK saw much steadier growth trajectory.
The growth looks sudden, but there are lots of factors that have turned Paris into a hot startup ecosystem, according to VCs and startup founders in Paris who spoke with Business Insider.
There are young, tech-savvy angels to invest in new founders
BlaBlaCar is a French ridesharing startup that was founded in 2006 by president Frédéric Mazzella and CEO Nicolas Brusson.
The carpooling service matches passengers with drivers for long journeys, letting both cut down on petrol costs. Riders pay drivers, and BlaBlaCar takes a cut of up to 20%. The startup isn't particularly popular in the UK, where people are too suspicious of each other to share car journeys according to cofounder Nicolas Brusson, but it has 20 million members.
The startup was valued at $1.5 billion (£1.16 billion) after a 2015 funding round, making it a rare European unicorn. And there's been an important knock-on effect — the two founders are now angel investors. The amounts they invest are small ("I am not a rich man," Mazzella told Business Insider), but the pair are examples of something that's still rare in France — young, successful, tech-savvy investors. Examples of their investments include French parking space app Zenpark, and kids' clothing startup Patatam.
As another investor said: "There are fewer wealthy entrepreneurs in France — it's mostly traders and lawyers. Entrepreneurs have fewer wealthy mates to invest, and French angels have tended to be older."
People like Mazzella are also encouraging young French people who are entering the job market to try their hand at starting a business.
Entrepreneurship has become an appealing career choice now, and that's a big change over the last decade. As one investor put it, France’s historical attitude to entrepreneurship could be neatly illustrated by the French phrase for “venture capital” — “capital risque”.
"No one was really interested in startups," said Philippe Botteri, a partner at VC firm is now worth £7.4 billion, according to Forbes.
Niel is an unconventional character, and highly active in the local startup community. He invests through his firm Kima Ventures, backing around two startups, like British startup Cera, per week. He personally approves all deals with a simple "yes" or "no" email to his team, one partner said, and he is Kima's sole financial backer.
Niel also set up École 42, a free school for would-be programmers.
Station F is his biggest push yet to encourage a new generation of entrepreneurs in Paris. The campus is based out of an abandoned railway depot in the 13th arrondissement, and looks like a cross between a space station and a terminus.
The startups which take residence there will all be part of accelerator programmes run by corporate partners including Facebook, Zendesk, and Vente Privee. Station F will run its own incubator too.
The woman running Station F day to day is Roxane Varza. She formerly ran Microsoft Ventures and Microsoft's startup programme Bizspark in France. She's also a former TechCrunch journalist.
She told Business Insider:"We're looking at creating an entire ecosystem under one roof, creating something visible and emblematic. We're also looking at making entrepreneurship accessible to different populations, whether they be international, women, men, from different backgrounds, underprivileged backgrounds."
Niel put it more bluntly when he spoke to Business Insider in March.
"[It's for] people who are not — how do you say it — classic, white, Catholic," he said. "We ought to have a lot of diversity in this place, to have more diversity in Paris."
There hasn't been another Xavier Niel in France, and some people describe him as the country's Steve Jobs.
"You can see... that what he really wants to do is make sure entrepreneurs can access the means to realise their ambition, he's really championing that," said Accel's Botteri. "That's something people recognise and admire. That's different from the previous generations."
There's a new tech-friendly president
Something else that should encourage investment in Paris is its new president, Emmanuel Macron, a young, centrist politician who beat extremist candidate Marine Le Pen.
Before the election, investors described Le Pen to Business Insider as anti-capitalist, "a fascist," and hostile to the tech industry. They were worried that popular disillusionment with the political establishment might lead to her election.
But Macron won, and actively courted the startup community in the run-up to election, founders and investors told Business Insider. He was previously France's economy minister, and went to a major tech trade show, the Consumer Electronics Show, last year to promote French startups and show government support. Some people think he could lure French expats back from London, or even attract British startups over to France.
One of the most important changes Macron might make is to France's tax system. He promised to dock France's wealth tax and capital gains tax, which are both unpopular with entrepreneurs and investors.
Currently, if you have net assets worth at least €1.3 million (£1.1 million), you're hit by both taxes."It's a killer," one high-profile investor said.
Macron wants to scrap the wealth tax on investments, but keep it for property. He'll also reduce capital gains tax, though it will still be higher than the UK or Germany, according to Philippe Collombel, managing partner at Partech Ventures.
"That's perfectly acceptable in my view," he said. "France will be back in the race."
The changes would mean entrepreneurs selling their companies wouldn't have to hand so much of the proceeds over to the state.
Still, Collombel's skeptical that French entrepreneurs will flock home from elsewhere in Europe as a result. "As long as you have the wealth tax in France, nobody will want to come back," he said.
France's access to foreign talent is improving
French entrepreneur Albin Serviant is the CEO of London-based startup EasyRoomMate and runs French Tech London, a meeting group for expats.
He and other founders in the group moved to the UK because it was easy to build an international team in London.
"It's a melting pot of Italians, Germans, Spanish, people from outside Europe," he said. "When you want to launch in a country outside of France, it's easy to get someone from [other] markets."
France has acknowledged that people might choose to move to London over Paris from other countries, and that this has an impact on its tech ecosystem. So it's moved quickly to make life easier for overseas founders.
In 2015, the French government launched the French Tech Ticket, a visa and support programme targeted at foreign entrepreneurs. And in 2017, it introduced the French Tech Visa, an uncapped visa for tech workers who come from outside the EU.
Foreign investment is coming
Overseas investment has been slow to arrive in France, but that's changing too.
"Funds have been local, and small", according to Partech Ventures partner Emmanuel Delaveau. Partech started in the US, and is a rare example of an American fund establishing itself in France.
But, Delaveau added, more funds were finally coming from Europe "with large cheques."
"There are good signs of the market maturing," he said.
One example is Atomico, the London-based venture capital fund set up by Skype's billionaire cofounder Niklas Zennström. When Business Insider visited Paris in March, he was also making the trip to court the local tech scene.
Atomico laid out its investment approach at an event for executives from startups like Deezer and BlaBlaCar, and investors XAnge and Korelya Capital.
Atomico hasn't invested in any French startups since 2009, but Zennström wants that to change.
"Now there's a new wave everywhere in Europe, not least in France, Spain, Switzerland and Austria," he told his guests.
This article originally appeared on Business Insider.