Billionaire Niel Uses French Ex-President for Unlikely Role

(Bloomberg) -- On any day of the week, Station F, a former Paris train station-turned-startup incubator, is full of 20-something coders and founders, working among pool tables, arcade machines and Jeff Koons sculptures.

Lately, though, it has become the part-time office of an improbable new player: 63-year-old Francois Hollande.

Better known for being only the second Socialist president of France rather than an avid techie, Hollande now spends a part of his Mondays at Station F, which billionaire Xavier Niel is turning into a mega-campus for startups in central Paris. Facebook Inc. Chief Operating Officer Sheryl Sandberg dropped by there this year to unveil a Startup Garage, followed by other visitors such as Tony Fadell and Snap Inc.’s Evan Spiegel. 

Like Sandberg, Hollande is throwing his weight behind the French startup ecosystem as an up-and-coming growth driver, chaperoning entrepreneurs on strategy and helping find financing.

Claiming Credit

“Technology was one of the priorities of my time as president -- it makes sense that I be here,” Hollande said in an interview at Station F, settling into a white plastic chair near spaces occupied by the likes of Amazon.com Inc. and Microsoft Corp., who’ve agreed to host and handhold emerging companies. 

That claim aside, Hollande’s name seldom pops up in conversations about how the spotlight is shining on France’s ability to attract entrepreneurs. That credit usually goes to his successor, Emmanuel Macron.

After all, Hollande hasn’t always been the best friend of entrepreneurs. He announced a 75 percent tax for millionaires in his first year as president, a levy that he later dropped -- in part thanks to pressure from Macron, who famously said France was turning into “Cuba without the sun.”

In contrast with U.S. President Donald Trump’s anti-immigration stance and the U.K.’s Brexit vote, President Macron used his vision of making France “a startup nation” as a cornerstone of his election campaign, inviting entrepreneurs and investors.

Tax Credits

Still, Hollande is keen to reclaim some credit from Macron, who as his economy minister helped promote Station F. Then as president, Macron opened the center at a glitzy ceremony in June.

During his term, Hollande unveiled tax breaks and incentives for research and innovation, conducted roadshows to attract venture-capitalists to France and a started a program to lure foreign talent called the “French Tech Visa”. What Macron calls “startup nation,” Hollande during his term referred to as a “digital republic.”

“We did a lot for tech, and the investments we made for many years are paying off," Hollande said. "The ecosystem we helped establish is flourishing today in the international context.”

Cash is pouring into the Paris startup scene. In the first half of the year France leaped ahead of the U.K. by raising more venture-capital money, the latest report by Dealroom showed. In late May, Snap Inc. acquired Zenly, a French startup that makes a social map so people can see where their friends are hanging out, for $200 million.

While France’s economy is set to lag that of the euro zone as a whole, as it has for the past three years, the country is on track for growth of about 1.7 percent in 2017, making it its best year since 2011, according to forecasts by the OECD and the finance ministry.

“France’s public policy from these past years is paying off today,” said Philippe Collombel, a partner at venture-capital firm Partech Ventures. But “Macron’s election has translated into an overnight change of attitude toward France. With the labor law, the wealth tax reforms, Macron is sending strong symbols that he’ll stick to what he promised.”

Giving Advice

Without France’s vast state apparatus under his control, Hollande is now doling out advice rather than tax breaks. The former president meets entrepreneurs a couple of hours each week as head of a non-profit foundation called “La France s’engage,” or “France Commits,” at his spot of Station F’s 34,000-square-meter (366,000-square-foot) space, which is filled with conference rooms made from shipping-containers, foosball tables and art -- including Koons’s Play-Doh sculpture.

“What entrepreneurs need most of the time isn’t money, it’s guidance on who to work with, different financing sources and mentoring,” Hollande said. 

During one meeting with Louis Torrenton and Gabin Perouze, the two 20-year-old co-founders of an online platform for actors called Troupers, backed by Havas SA, Hollande focuses the conversation on how the startup helps young people find jobs. In other meetings too, many of the solutions he offers -- whether funding or contacts -- are in the public sector, making use of his experience as a lifelong civil servant.

Macron Effect

Like his former boss, Macron has also worked in the public sector since graduation. But unlike the former president, Macron’s two-year stint in private banking as a deal-maker at Rothschild in Paris has taught him that the state can’t do it all, and that grand statements and soundbites are needed to build investor confidence.

“So far we have not measured a Macron-acceleration effect on the economy, but there is a confidence factor that is at play,” said Francois Cabau, an economist at Barclays in London. “Confidence is about fostering investment, risk-taking and favorable regulations. We will see if Macron does everything he has promised to, even the tough things which are yet to come.”

At Station F, meanwhile, entrepreneurs who are just starting out are banking on Macron delivering on his pledges. And while they’re at it, they’re also open to support from other quarters -- past presidents included.

--With assistance from Mark Deen

To contact the reporters on this story: Marie Mawad in Paris at mmawad1@bloomberg.net, Helene Fouquet in Paris at hfouquet1@bloomberg.net.

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Geraldine Amiel