1

STARTUPcor- porate

FINAL REPORT

The French TechBarometer of Startup-Corporate

Collaborations

in France1ST edition

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The French TechBarometer of Startup-Corporate

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in France1ST edition

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over the last four years they have be-come an increasingly important ele-ment in the French economic lands-cape. The number and frequency of funding rounds continues to grow, VC investment has more than doubled over the last three years, new inter-national leaders and unicorns have emerged, etc.

One thing is clear, the growth capacity of a startup is strongly correlated to its "ecosystem", that is to say the network of players and structures with which it interacts. Corporates are a fundamen-tal piece of the puzzle - they can serve as a startup’s customers, investors, buyers, partners, distributors, etc.

As a country, France is ranked se-cond in the world in terms of having the greatest number of corporations among the 500 largest companies globally (Global Fortune 500).

This is why, at a time when startups are introducing major innovations and disruptions of value chains, corporates are trying to integrate into this ecosys-tem, growing it and growing from it, to accelerate their own transforma-tion and better prepare for the future. But what’s really going on?

For three years, the "French Tech" mis-sion, a public initiative, has set out to create structured policies that are fa-vorable to the growth of French star-tups; in line with this, some of its foun-Fo

re

wo

rd

The dynamic of French

startups is increasingly

apparent:

3

ding members have proposed to take a closer look at the current standing of startup-corporate collaboration in France.

So the French Tech Mission, a part of the Ministry of Economy and Finance, and its partners the Directorate Gene-ral for Enterprise, the Caisse des Dé-pôts and Bpifrance created the French Tech Barometer of Startup-Corporate Collaborations.

The objective?

To measure the current state of star-tup-corporate collaborations and to assess its improvement over time with the goal of encouraging collabo-ration and making it more effective.

As the global economy goes through a phase of profound change, our conviction is that tomorrow’s great leaders of the French economy will be comprised of corporates that will have succeeded in transforming themselves and startups that have been able to grow successfully. The respective destinies of these compa-nies are therefore related.

Today, they must come together around a shared and vital interest: to multiply and seize all opportunities for transformation and growth.

—

French Tech, and its partners

the Directorate General for Enterprise,

the Caisse des Dépôts Group

and Bpifrance

—

The objective?

To measure the current

state of collaboration

between startups

and corporates.

—

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The BaromeTer

Team The Barometer team is made up of the French Tech Mission,

part the Ministry of the Economy and Finance, along with its

partners Bpifrance, the Caisse des Dépôts et Consignations

Group, and the Directorate General of Enterprise.

The study was conducted by Five by Five.

French Tech

david MonteauDirector

delphine Gomes de SousaAssociate Director

Marie Gallas-AmblardDirector of Communications

Five by Five

Chloé BonnetCo-founder

Kat BorlonganCo-founder

edward GomaaProgram Director

Directorate General

for Enterprise

david AdolpheInnovation Ecosystem

Manager

Bpifrance

Cécile BrossetDirector Bpifrance le Hub

Benjamin SasuExternal and Press Relations

Manager at the Hub Startup

Caisse des Dépôts

Benoît ParizetHead of Studies

and Strategic Projects

Strategy Department

Clothilde Morgan de riveryProject Director

Strategy Department

Alaya-Nur PujolProject Manager

Strategy Department

Maud FrancaAssociate Director, Digital

Investments for the Future Program

Johanna ouazzaniProject Manager

Investments for the Future Program

5

The sounding

Board The team was fortunate to surround itself with a diverse Soun-

ding Board, composed of individuals selected for their exper-

tise and involvement on the subject: entrepreneurs, investors,

and directors of innovation.

romain Lavault General Partner

Partech Ventures

Celine Lazorthe Founder and CEO

Leetchi.com @ MANGOPAY

Jérôme Lecat CEO

Scality

Yann Marteil President

Via ID - Mobivia

Pierre-Yves MeerschmanCo-founder

Daphni

Anne Laure NaveosDirector of External Growth,

Digital and Strategic

Partnerships

Crédit Mutuel Arkéa

Christophe SpoerryCo-founder

Euler Hermes Digital Agency

Bruno SportisseCEO

SKOPAI

Jonathan BenhamouCo-founder and CEO

People Doc

Alain CaffiFounder and General Partner

Ventech

Bernard CottinDirector of Digital

Transformation

Groupe Caisse des Dépôts

Guillaume dupontFounder and Partner

CapHorn Invest

Antoine durieuxFounder and CEO

Alkemics

Paul-François FournierExecutive VP

Innovation

Bpifrance

Aymeril HoangDirector of Group

Innovation

Société Générale

Tatiana JamaFounder and CEO

Selectionnist

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ParTiciPaTing

comPanies

This study would not have been possible without the support

of the companies surveyed. We thank them for their time and

commitment. Sourcing the necessary data took a considerable

effort requiring participation at all levels, from the C-suite to

the front-line operations. Below you will find the complete list

of participating companies for this first edition of the French

Tech Barometer.

Of the 70 companies who declared interest upon receiving our

invitation, 41 were able to bring together the required data.

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ceSTATe oF THe MArKeT

Startup-corporate collaboration in France

in collectively creating positive standards -

open innovation is poised to unlock significant

value not just for corporates and startups, but

for the French business community as a whole.

This is no small task. What you are seeing here

is an incredible team effort which, essentially,

is what makes the French Tech Barometer ori-

ginal in its genre:

• 41 companies have engaged in a collective

effort to centralize and collect an unparalleled

volume of representative data on the subject,

supplemented by qualitative observations (see

the list on page 6).

• A first look at the "black boxes" of open in-novation. Several responding companies have

agreed to open previously confidential docu-

Let’s just go ahead and say it: open innovation

racked up a bit of a bad reputation in its earlier

days, in France and elsewhere. Partially from

smoke and mirrors-- PR-driven projects with

unclear returns. But also from actual harmful

practices carried out by some corporates in

their work with startups. Whether it was asking

startups to churn out white label versions of

their products, questionable IP practices or

impossibly long processes, we have seen many

bad deals hinder the scalability of startups or

drive them to bankruptcy.

Together we want to help change that.

It is our belief that, in 2017, innovation is at least

as much about successfully partnering with

startups at scale as it is building solutions in-

house. We also anticipate that - if we succeed

—

Open innovation cannot remain

superficial. It’s success in the long

run rests heavily on adapting

and transforming the inner

mechanisms of an organization.

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ments (PoC contract templates, startup pur-

chasing guides, examples of their internal plat-

forms, etc.)-- precious assets that everyone can

now benefit from.

• Meticulous information verification from a sample of startups that collaborated with the

major participating groups, to make their point

of view heard and provide a balanced view.

• A focus on results and best practices, deli-

berately leaving aside the question of branded

corporate accelerators, hackathons and events

that are often at the center of attention.

• The involvement of a wide diversity of players in the French Tech community. VCs, startup

founders, tech journalists, and innovation pro-

fessionals have all provided us with their prac-

tical advice. Without forgetting of course, the

unwavering support of the French Tech Mission,

the Caisse des Dépôts Group, the Direction Gé-

nérale des Entreprises, and BPIfrance.

For startups and for corporations, this barome-

ter sheds light on the questions that we are

unwinding together. What are the best prac-

tices that have been put in place (on either

side), that contribute to everyone’s progress?

What are the obstacles that we have yet to

overcome on this journey?

The good news is that the barometer reveals

a market that is maturing, two worlds that

are beginning to learn to work together des-

pite their differences in culture, objectives, and

ways of working. Most noteworthy in our view,

is the number of large corporates that have

realized that open innovation cannot remain

superficial, and that its success in the long run

rests heavily on adapting and transforming the

inner mechanisms of an organization.

There is no point in making massive efforts to

tap into the startup reservoir without first crea-

ting the proper framework: a system that can

grow and scale partnerships. The high propor-

tion of corporates that have adapted internal

processes for startups (75% of them) is a new

and particularly strong signal of the serious-

ness with which corporates are approaching

the endeavor. Innovation departments are also

professionalizing themselves by acting as plat-

forms within their organizations and with exe-

cutive committees taking up the subject (83%

of the CEOs support the process).

The structural efforts being put into place will yield good years before them.

of course, not everything is rosy in the land of open innovation. While CEOs are heavily

engaged, the budgets allocated to open in-

novation remain disproportionately low. The

impact of new processes has yet to translate

into a reduction in the time it takes to close a

deal (e.g. around 6 months lead time from first

contact to signing a distribution partnership).

CVCs are becoming increasingly common,

but are also struggling to find their identity - a

necessary condition for the emergence of vir-

tuous investment practices. The scaling of star-

tup-corporate solutions is improving, but still

has its share of unresolved issues.

In the end, much like innovation, the findings

reported here are in constant movement. The

study is not meant to be read as a result, but as

a trigger to encourage awareness, discussion

and debate.

And above all, action.

—

Chloé BonnetCo-founder, Five by FiveKat Borlongan Co-founder, Five by Five

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ceBAroMeTer’S reSULTS: KeY FIGUreS

1 • PARTICIPATION

Breakdown of

participating companies.

Percentages may not

add up to 100 due to

rounding

2 • GENERAL

CEO implication.

Percentage of French corpo-

rates who indicated that CEO

oversees questions related

to startup collaborations.

3 • STARTUP SOURCING

Startup sourcing by French

corporates split by geography.

A startup is "sourced" when

it has obtained a meeting

with the large corporate

(whether in-person or via

teleconference).

Internal coordination.

The top 3 departments which manage startup collaborations

according to respondents are the following:

Innovation

Digital

Business units

BY SeCTor

BY reveNUe

83%

Financials

More than €30 billion

Consumer Goods

€5-10 billion

Basic Materials

Consumer Services

€20-30 billion

Industrials

€5 billion

Health Care /

Oil & Gas / Utilities

Technology

€10-20 billion

66%

100%

53%France

Europe

Global

59%

21%

56%

26%

Telecoms

34%

19%12%

10%

7%7%

5%6%

27%

10%

12%10%

41%

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4 • PROCUREMENT

The startup supplies

a product and/or service

to the corporate.

5 • CO-DEVELOPMENT

Range in number of Proofs of Concept*

(PoCs) per company

6 • INVESTMENT & ACQUISITIoN

Total amount invested by

each company

• average

• median

The median total procurement

amount spent on startup

solutions/services remains

relatively low.

Percentage of respondents with accelerated

or adapted procurement process for startups

Median amount invested

by sector of activty

declared that they had

completed a total of

Average negociating

time before signing

investment deal

Median amount invested

by company size

Median amount allocated

per PoC.

Average percentage of PoCs

industrialized in 2016

Percentage of global procu-

rement amounts of French

corporate spent on startups

instead of traditional suppliers.

Financials

less than 100k employees

Consumer Services

more than 100k employees

€667,500/year

€25,000

€47.5M

€7.9M

€5M

€15M

75%

€6,5M €23,2M

MAX €151M

69%

0,1%Percentage of respondents with clauses relating

to protecting startups’ intellectual property

0-5

5-10

10-20

50+

10-15

50%

9,5%

21,4%

12%

7%

36,7%

13 startupsacquisitions.

6 mois

6 companiesOnly

* A proof of concept (PoC) is a basic demonstration that showcases a concept in order to illustrate its viability,

scalability and on occasion profit potential

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—

The whole report is available on

startups-grandsgroupes.lafrenchtech.com

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KEY

IN-

SIGHTS

CorPorATe

STArTUPS

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ce1C-suite support abounds, but budgets have yet to rise to the occasion

key insighT

17

OBSERVATIONS

There is overwhelming support for open innovation at the C-suite level, according to 83% of respondents. In these companies, establishing startup partnerships is a priority embedded into

the executive committee’s mandate. Their many public commitments attest to this - we found

that 88% of respondents, for instance, have published a press release in 2016 highlighting the

strategic importance of collaborating with startups. In addition, all teams interviewed1 agreed

that this commitment to innovation from the highest levels of the company is crucial to success.

Paradoxically, this commitment has not yet been reflected in the budgets allocated to startups:

only 0.1% of global purchasing budgets were spent on startups versus established compa-nies. Across all respondents the volume of start-up partnerships outside of equity investments

remains very modest, with a median of 34 startup partners in 2016.

while the number of PoCs (Proof of Concept) reported in the study ranged from 0 to 100 in 2016, more than 50% of respondents reported having launched between only 0 and 5 PoCs. The average budget for a PoC, whose duration can extend up to several months, is only €25,000. Not to mention there still exists the tendancy to resort to a “free PoC”, which persists

in some cases despite continued warnings from the ecosystem over recent years.

If in 2017 the question of why work with startups has been decided upon, accepted and in-

tegrated into corporate strategy, there still remains, however, bigger questions of how to go

about it and, of course, how much to allocate. Some corporates are already leading the way,

with 19% of respondents offering a dedicated budget line for startups in their purchasing bud-

gets. The massive support offered by CEOs will surely not take too long to translate into addi-

tional resources being dedicated to successful startup partnerships.

1 —

12 qualitative interviews were completed with the selected companies.

83% of Ceos from French corporate respondents are implicated when it comes to startup partnerships, yet in these same companies only 0.1% of purchasing budgets

went to startups instead of established players.

83% .1%

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TAkEAwAyS

—

FOR

CORPORATES

Give yourself the means

to achieve your ambitions

"First of all, it’s necessary to convey the urgency and the need to commit resources that match

the importance of the challenge. The main risks? The easy way out of half-measures as well as

increasing numbers of opposing stakeholders."

— Yann Kandelman, Head of Investments

& Development, Orange Digital Ventures

designate resources specifically

for experimenting with startups

"It’s important to have dedicated resources for pilot projects. We have a budget line that is

explicitly designated for these, as well as the ability to mobilize the internal technical profiles

that we need depending on the type of project and profile we want."

— Aurélie Clerc, Head of Open Innovation,

Française des Jeux

open requests for proposals

to startups

"We need to work to include startups in major requests for proposals that often are only opened

to conventional vendors."

— Michael Offredi, Digital Ecosystem

& Innovation Officer, Total

1

19

don’t underestimate

the risk of a free PoC

"Even in the knowledge that startups are by definition economically fragile, nevertheless many

of them agree to work for free, particularly in the context of a PoC. This is as much a travesty

for the startup (no pay and no way into the client’s billing processes) as it is for the client (no

need to create an internal fast track and no motivation to test and assess the real value of an

offer). So stop the free PoCs: always set a price for your work, even if it’s low, to establish a true

business relationship with the corporate from the beginning."

— Gaëtan Bolloré, Co-Founder, StartupFlow.io

Be cautious about companies

that interact with startups via

hackathons to "reinvent the future

of X in 48 hours"

"When I hear that companies are still organizing hackathons that promise to radically change

their core business and accelerate innovation, I can’t help but think of all the other, still more

effective, ways to transform an organization. From experience, if you run a startup, participating

in a hackathon should not be one of your top priorities. Maybe you’ll make some interesting

contacts, but most often it will be a waste of time, and you’ll realize that your best prospects

actually come from elsewhere."

— Patrick Perlmutter, uX Designer and Analytics Strategist,

Metriq.io

—

FOR

STARTuPS

everyone seems a say that open Innovation is of strategic importance, and that they are backed by the Ceo. The money is yet to follow

TAkEAwAyS

—

FOR

CORPORATES

C-suite support abounds,

but budgets have yet to rise to the occasion.

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ce2Defining the negotiating timeframe is a key success factor of any partnership

key insighT

21

OBSERVATIONS

Six months. For a startup, that can represent the time it takes

to go from idea to market deployment. For a large corporation,

this simply refers to the time needed to get a green light from

management.

According to respondents, the average time in France to go from the first handshake to a signed contract is 5.6 months

in the case of a distribution partnership. And 20% of our res-

pondents declared that these wait times can stretch far over

six months.

The length of time needed for contractualization processes cur-

rently seems unable to be reduced as it’s invariably linked to a

combination of organizational complexity and culture within the

corporate. The important factor is then providing startups with

the transparency and open communication that’s needed to offer

the visibility from the very beginning of a collaboration.

Is the startup able to handle the foreseen timeframe and po-

tential changes to it? Is the corporate ready to compromise

on some of the process-related delays? These are some of the

questions that must be honestly and openly addressed at the

start of any project.

Average duration of the negotiation period of a distribution partnership

20% of company respondents have negotiating times longer than 6 months

5.6monThs

20%

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don’t be afraid to say no

"Qualifying a prospect is not easy for a B2B startup. It’s hard to say ‘no’ to founders, especially

when you think that their technology is pretty cool. Tell them - firmly and respectfully - why they

don’t match your use case. An honest response: a ‘No’ or ‘Come back to me when you meet these

criteria’ is extremely valuable for startups."

— Renaud Visage, Venture Partner, Index Ventures and

Co-founder/CTO, Eventbrite

Put an end to

"innovation tourism"

"As a former startup team member, I try to avoid the "innovation tourism" that is rampant in

corporates. I make it a point to educate peers and colleagues about the difference between

working with partners with big pre-sales budgets and working with startups. It’s better to in-

vite startups to pitch when you have a pretty clear idea of your potential collaboration."

— Michael Offredi, Digital Ecosystem

& Innovation Officer, Total

Qualifying a project remains a

major issue

"You can’t try to sugar coat it: risk taking is still risk taking and it’s even more true when we’re

talking about an early-stage startup with a piece of disruptive technology. Project qualification

is a major challenge which could help large corporates to make their decisions under better

conditions."

— Bruno Sportisse, CEO, SKOPAI

2

TAkEAwAyS

—

FOR

CORPORATES

23

Be aware of the realities of

corporate decision-making

"A whale can hurt a small fish without meaning to. The difference in the way that time moves for

startups and corporates is huge and the gap isn’t closing soon. It’s important to understand the

decision-making cycle of these more imposing entities, to be able to adapt, be more agile and

navigate effectively within their frames of reference. We can’t change a corporate’s decision-ma-

king process or their multiple tiers of validation. You have to accept it, adapt and ensure that

things keep moving forward."

— Cedric Mangaud, CEO and Co-founder, Piq

Take small steps, pivot if necessary

"Let’s say your PoC may have been a success, but the deployment phase, which is critical for your

startup, isn’t going well. To be successful, you need to take small steps with clear milestones. Ask

yourself: are we continually progressing? In six to eight weeks, for example, you need to have come

to an agreement on IP and dealt with IT. If this is the case, you’re on the right track. If it’s not, don’t

hesitate to step back and say, ‘Let’s make another PoC’ or ‘Let’s stop here and cut our losses.’"

— Antoine Baschiera, CEO and Cofounder, Early Metrics

Ask the right questions

from the very first day

"We’ve known for a while that partnerships with corporates tend to involve unfortunate realities

such as complex decision-making processes, compliance/IT/security checks, procurement obs-

tacles, etc. Launching a saga of follow-up emails won’t change that complexity. Sit them down

from Day 1. Show them this study and ask, ‘Look, the average of these 41 companies is roughly 6

months. Are you likely to faster or slower than that?’"

— Pierre-Yves Meerschman, Co-founder, Daphni

everyone seems a say that open Innovation is of strategic importance, and that they are backed by the Ceo. The money is yet to followDefining the negotiating timeframe is a key success factor

of any partnership

—

FOR

STARTuPS

TAkEAwAyS

—

FOR

CORPORATES

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ce3When it comes to open innovation, a solid foundation comes before an elegant façade

75%

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25

OBSERVATIONS

For corporates, startup partnerships are no longer a series of cosmetic practices and communi-

cation stunts. Corporations are now attacking the heart of the problem and have entered the cri-

tical phase of redeveloping their processes and ways of working to create more value with their

startup partners. 75% of respondents have started implementing internal processes adapted specifically to startups to eliminate unnecessary obstacles.

These process redesigns give weight to the idea that corporate innovation is in fact a team sport.

With the guidance of the innovation department, we find many different stakeholders around

the table to lead these projects: IT, procurement, legal, cybersecurity and compliance — all with

the shared objective of finding new solutions. Some, such as Air Liquide, have gone so far as to

integrate IP lawyers dedicated to startup partnerships in their innovation team. This is a key func-

tion when 19% of the companies surveyed still include an exclusivity clause in their supplier contracts. Some have radically stripped down their processes to make them more flexible (see

Legrand’s case study on the transition from contracting to trust, p. 48). Still others have opted for

entirely new processes adapted to early stage startups, in particular to facilitate co-development

(see extract from the BNP Paribas’ Startup Engagement Kit on our website).

Best practices for designing startup-friendly processes

• Adapt vetting processes to startups,

aiding them in becoming eligible for respon-

ding to bid requests normally open only to

traditional suppliers.

• A payment cycle of one month or less to meet

the cash requirements of the startup partner.

• Provide the startup at least 20% as a down pay-

ment at the signing of the contract (some, like

FDJ, give up to 50%. See our case study on p. 46).

• Draft agreements that protect the intellectual

property of startups (69% of respondents provi-

de clauses to protect the intellectual property

of startups for all types of partnerships).

Percentage of companies declaring that they have started implementing internal

processes adapted to startups

75%

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Make innovation a priority

for legal and purchasing

"To anticipate potential challenges, it’s important to bring in IP and purchasing departments

from the very beginning of the partnership. With us, for example, IP is at the heart of the innova-

tion team. The startup collaboration must be designated as a priority for these departments to

incorporate speed and agility into the collaboration."

— François Darchis, member of the Air Liquide Group Executive

Committee, overseeing Innovation and Development

Consider the legal department

as both an adaptive tool

and reputation builder

"Since each startup is different, it’s utopian to believe that a standard contract will work for

every partnership. A case-by-case approach must be developed without weighing down the

process, which can sometimes be difficult to manage. The contract must be simplified while

being adapted to risks. This is a strategic matter for FDJ because it helps to guarantee the re-

putation and attractiveness of our company within the startup ecosystem."

— Aurélie Clerc, Head of Open Innovation, Française des Jeux

opt for product vision over

project management

"Don’t spend too much time on specifications - go for it, test, experiment. It’s necessary to tran-

sition from being a ‘buyer’ to an ‘innovator’, that is to say, to provide a "product" vision and not a

"project" vision, and to go from specifications to collaboration."

— Pierre Laroche, VP Group Research & Technology, Legrand

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opt for simplicity when it comes

to intellectual property

"Create an environment of trust by keeping things simple: the startup remains the owner of the

product/service, and its different iterations. The corporation remains the owner of the data that

it provides and what results from their use."

— Bpifrance Le Hub, taken from the report "Procurement

relations between corprates and startups: explanation

of the Deal Memo project"

Ask process-oriented questions

at the start of the partnership

"Choose the large corporates that you want to work with, keeping in mind the processes they

have in place and the kind of shocks that your startup is able to withstand. A corporate that can

describe step-by-step how it will work with you is a positive signal, showing an awareness and a

structural effort that goes beyond the hype."

— David Le Louarn, Co-founder and CEO, Kinnov

document everything

and talk to each other

"You have to document everything when it comes to your relation with the corporate. You have to

make sure you have long-lasting contacts within the company but also that information is shared

in event of a change in personnel, or when new people have to be brought into the project. Am-

biguity or silence will always be interpreted to the advantage of the side with the stronger hand."

— Jean Baptiste Soufron, Partner at FWPA Avocats

and former Chief Legal Officer, Wikimedia Foundation

everyone seems a say that open Innovation is of strategic importance, and that they are backed by the Ceo. The money is yet to followWhen it comes to open innovation,

a solid foundation comes before an elegant façade.

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key insighT

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66%

5%

OBSERVATIONS

After the initial years of experimentation, carried out by teams with relatively limited scopes, in-

novation departments have gained a lot of maturity and clout in their organizations. For 66% of respondents, it’s the innovation department that coordinates startup-corporate partnerships.

However, these teams are far from working alone: less than 5% of companies say that their inno-vation department alone coordinates such projects, the contribution of other departments and

Bus being strong. Just as it has been for "digital", which has become embedded into organizations,

open innovation is no longer under the sole control of innovation directors that increase their staff

in an attempt to take charge of every aspect of innovation within the corporation. Innovation

teams remain small, and this resource constraint has become an opportunity, turning them into

in-house service platforms especially for Bus. As a platform, the role of innovation departments is

very clearly oriented towards four major missions: promote, equip, connect, and catalyze.

ProMoTe Promote digital culture in the broad sense, collecting and sharing the best practices of more advanced

Bus to create a fertile and start-up friendly environment for other internal teams just starting out.

eQUIP

Propose methodologies, tools and best practices that make it possible to streamline and better

manage collaborations2.

CoNNeCT

Build a company-wide database of pre-qualified startups, and help Bus scout for startups able

to respond to their innovation strategy, business and use cases.

CATALYZeProvide API portals to facilitate the sharing and monetization of technology assets and increase

the number of distribution partnerships with startups.

66% of companies surveyed state that their innovation department coordinates their diverse partnerships with startups

5% of companies surveyed state that their innovation department coordinates alone

their diverse partnerships with startups

2 —

Such as the methods used by lean startups by Legrand, see page p. 48

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equip open innovation

at Group level

"To encourage and accelerate startup partnerships across all regions, we created the Startup

Engagement Kit. It’s a package that brings together BNP Paribas’ commitments to startups

and a set of concrete tools to ensure their adoption. They include a standard confidentiality

agreement, simplified contract templates to be adapted according to the specificities of the

country, a sandbox of anonymized data, recommendations to better manage kick-offs, and

lightened proceses for purchasing, compliance, IT and security. The Kit allows us to align all

partners, both internal and external, with the end goal of proposing innovative services more

rapidly to our clients."

— Sophie Heller, Chief Operating Officer,

Retail Banking & Services, BNP Paribas

Strengthen the capacity of

BUs to work with startups

"It’s important to work with colleagues in all Bus concerned by a project. Don’t forget to train

Bu project managers on the startup ecosystem and its culture to facilitate interaction between

these very different ways of working. They also need to be provided with the tools they need to

carry out the project, including mentoring from professionals that are experienced in corpo-

rate innovation (with us, we deploy teams from our startup accelerator uR Link). But, even more

important: the time to work. In coordination with HR, we have ensured that project managers

working on startup partnerships can officially devote 20% of their time to their projects."

— Jean Collet, uR Link Director, unibail-Rodamco

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Make a beeline to the BUs

"The shortest path from point A to point B remains a straight line. By experience, it is more effi-

cient to first convince the business unit and then to get the support of the innovation team to

transform. The opposite is less conclusive."

— Antoine Durieux, Co-founder and CEO, Alkemics

Align common objectives

"The big question is not so much the willingness to collaborate (that much should be obvious),

but the alignment on common objectives across two different time scales. The first one around

a PoC and agreed-upon KPIs and the second one where the startup and corporate move into

industrialization. It’s not necessary to have a very clear vision of the second time scale, what’s

important is to ensure that the two parties are not doing a PoC for a PoC, but that there is a great

interest at stake, shared over the long term."

— Antoine Baschiera, Co-founder and CEO, Early Metrics

everyone seems a say that open Innovation is of strategic importance, and that they are backed by the Ceo. The money is yet to followThe latest generation of innovation departments are

transforming into platforms for their internal ecosystems

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OBSERVATIONS

After years of difficult conversations between financial institutions and startups, and especially

with fintech startups, it appears that the "Cold War" between these actors is winding down.

More and more banks and insurance companies actively collaborate, invest and acquire star-

tups. They are now also reviewing their entire customer experience as a terrain for collabora-

tion — a priority in recent years due to regulatory issues as well as the emergence of neo-banks

and digital migration.

34% of the participants in the study belong to the financial sector — the second most repre-

sented sector is consumer services3 (distribution, media and travel, leisure) at 20%. More than

half of the respondents selected for their outstanding practices come from financial services (see

our case studies on page 45).

Financial services are therefore, after the technology sector, the primary buyers of services provi-

ded by startups (a median of 20 startup suppliers per company in 2016). Maintaining their strate-

gic position also requires investment and they are indeed the largest investors in terms of value,

among all the respondents in 2016.

This momentum is expected to accelerate with the new European payment directive, (PSD2)

and many ongoing API-fication and transactional data sharing projects that will facilitate inte-

raction with startups.

Financials Consumer Goods Basic Materials

Consumer Services Industrials Health Care /

Oil & Gas / UtilitiesTechnology Telecoms

Breakdown by sector of the 12 companies selected for their best practices

by the study (see p. 44)

Median number of startup suppliers by sector

3 —

Note: sector classification according to Industry Classification

Benchmark (ICB)

55%

28,5

9% 20

9%

19

18,59%

1

9% 15

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Take advantage of PSd2

to move towards

a true platform strategy

"Rather than trying to prevent other players from accessing banking data that their customers

want, the most advanced banks are taking advantage of this new rule to experiment with

new revenue and distribution models via APIs. In the age of data, they realized that they could

create more personalized products and services, but also test and launch them faster than

what other technology companies are already doing."

— Mark Boyd, Founder of Platformable

and Author of "Banking APIs: State of the Market"

A strategy with a direct link

to your business challenges

"Here in the Sharing Economy team, we first define business challenges that we validate with

our top management. These business challenges then serve to define our investment thesis

as well as our portfolio management strategy and ultimately our relationship with our startup

partners."

— Thomas Ollivier, Director Sharing Economy

and Emerging Practices, MAIF

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don’t distrust the other side -

draw inspiration from them

"We must stop pitting fintech startups and large corporates against one another in the banking

sector. Startups are more like partners than competitors, with whom we can multiply contacts

in a win-win relationship. Banks can learn from, and get inspiration from, these players, using

new technologies and user experience to accelerate their transformation and boost innovation.

Startups can learn from banks’ expertise in regulation, distribution, security and large-scale pro-

cessing. I would advise startups to identify very quickly, among the corporates prospected, who

has organized and adapted their processes to work with startups, and to focus on them."

— Aymeril Hoang, Director of Innovation, Société Générale

Leverage your strengths

"When it comes to financial matters, banks are experts with a great track record. Not so with

code and design, two things that are fundamental to building an online business and that don’t

necessarily correspond with the way things flow in the physical world. This is where technology

companies like Stripe have a role to play: offering startups and innovative businesses a quick and

easy way to connect to traditional financial infrastructure, whatever their economic models (mar-

ketplaces, SaaS, etc.) and wherever they may want to be."

— Guillaume Princen, Head of France

and Southern Europe, Stripe

everyone seems a say that open Innovation is of strategic importance, and that they are backed by the Ceo. The money is yet to followThe financial services sector is

revving up

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key oBserVaTion

37

OBSERVATIONS

Corporates are anticipating nascent business models with a view to investing and preparing

their own future. They still experience the pitfalls of confusion, however, when it comes to the

differences between M&A and Corporate Venture Capital (CVC) and are often (too) cautious to

make acquisitions. of the 41 respondents, only six declared that they had completed a total of 13 startup acquisitions. As a point of comparison, over the same 2016 period, Alphabet (Google)

completed 19 startup acquisitions4.

CVCs are clearly on the rise: the total number of CVCs has more than doubled in the last 4 years

in France. 51% of participants report having started investing in startups in 2016 (versus 75% of Fortune 100 companies)5. Their increasing role in financing entrepreneurship is undeniable.

Of all types of partnerships surveyed in this study, CVCs still represent only 11% of the types of

partnerships reported by study participants, behind supplier partnerships (58% of partnerships)

and co-development (19%). This model is still being refined, and often rests uneasily somewhere

between a purely financial model and a strategic model, intergrated and aligned with their

corporate strategy. So, a first generation of CVCs is emerging that is learning from trial-and-error

and CVC experiments in more advanced markets, such as the uSA.

They are now finding a path towards balance: between startup growth objectives and corpo-

rate’s more stringent culture, between financial returns and business synergies, between exter-

nal stakeholders (VCs, startups) and internal stakeholders (business units, C-suite). This balance

is a result of the day-to-day work of often hybrid CVC teams (with both internal and external

recruits). These teams act as engines, or even as kingpins of the corporate-startup relationship

in the most stabilized models.

Companies reporting having made minority investments in 2016

6 companies among our respondents state that they have made a total of 13 startup acquisitions in 2016

4 —

CBInsights, "The Google Acquisition Tracker", https://www.cbinsights.com/research-google-acquisitions

5 —

Digital Ventures, "Corporate Venture Capital and the Challenges of Investing for Large Enterprises",

17 octobre 2017.http://dv.co.th/en/blog/corporate-venture-capital-challenges-investing-large-enterprises/

€

51% 13

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6

Aim beyond the core business

"A CVC does not work when the thesis is to invest only in the ‘core business’, because the internal

political challenges will be exacerbated and potential collaborations will be dead even before

they start. The level of competition within is too strong."

— Valérie Gombart, General Manager Hi inov,

Dentressangle Initiatives

Adopt a hybrid position

"It’s the key to developing winning relationships between startups and large corporates. At Via

ID, we’re an investment fund and a key strategic pillar of a well-known company and a startup ac-

celerator all at the same time and we look to always combine the best of these different worlds.

understanding these different themes allows us to build bridges, remove structural and cultural

barriers of the different stakeholders. For example, it’s important to not favor the corporate at

the expense of the startup or else you risk falling into a client-supplier relationship. Another one:

make sure you clearly define all individual and collective objectives at the very beginning of the

collaboration. An alliance is an accelerator of collective intelligence as once the players know

each other well, they can collaborate on more than just the core project."

— Yann Marteil, President, Via ID

Create a dedicated structure

"The ‘R&D Venture’ requires an ad hoc organization and a dedicated structure with its own rules

centered around the creation of an open innovation space which can integrate acquired compa-

nies. Several models currently exist and are developing, but the overarching requirement is that

the Group that begins this movement must create a dedicated internal ecosystem."

— Paul-François Fournier,

Executive VP Innovation, Bpifrance

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Think vC and CvC

"Many VCs were interested but we felt that having two or three VCs on our board wouldn’t

bring as much value as having two CVCs because of the overlap in competencies. Working with

a CVC gives us the opportunity to accelerate our business by establishing a single point of entry

that, in addition, generates use cases that can make sense."

— Clément Ravouna, Co-founder, Tanker

After the first concrete

business results push forward

"Startup-corporate relationships are fraught with misunderstanding and frustration. The star-

tup sees a rapid growth accelerator or an easy exit and the corporate, at worst, an anti-uberiza-

tion weapon, or at best, a new line of business. It’s important to take into account the level of

maturity of your startup for any in-depth relationship with a corporate, keeping in mind that

without real and concrete business results, corporate investment will not serve as an accele-

rant in this sense. What has not been possible operationally beforehand will not become so

just because a corporate provides capital, regardless of the channel (VC or direct)."

— Gael Duval, Co-founder and CEO, Jechange

do your own due diligence

"This is an absolute balance of power, where the two stakeholders simultaneously represent

both a threat and an opportunity to each other. Don’t underestimate the importance of due

diligence, take references from entrepreneurs who are no longer dependent on the CVC. Also,

pay attention to timing: if a startup integrates with a corporate too early, it risks becoming an

innovation unit at the service of the large corporate."

— Tatiana Jama, Co-founder and CEO, Selectionnist

et Membre du Conseil d’Administration de The Galion Project

everyone seems a say that open Innovation is of strategic importance, and that they are backed by the Ceo. The money is yet to followCorporate VCs and startup acquisitions in France are in their adolescent phase:

dealing with growing pains but clearly on the rise

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key oBserVaTion

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37%

OBSERVATIONS

There is a strong signal that innovation practices are maturing: the average conversion rate of PoCs into commercial/industrial production amounts to 37% among respondents, 12% higher

than that found in a recent study on the uS/international market6. A closer look behind this ave-

rage conversion rate average is important, because the numbers vary widely: from a low of 14%

to a high of 83%.

Companies with high conversion rates share several common characteristics: collaborative de-

cision-making with key business functions, partnership qualification, strong operational entity

buy-in, timed achievements using test-and-learn practices, and a multidisciplinary team dedi-

cated to scaling solutions.

For startups, the ability to deploy on a large scale and with momentum, specifically through

distribution and industrial networks, is one of the primary benefits of collaborating with corpo-

rates. Although getting to market is important to future revenue generation, corporates need to

be wary of the trap of short-term thinking. The key objective of scaling is steadily being ingrained

into startup-corporate partnerships, from startup sourcing to innovation performance measure-

ment, which should lead to an increased impact over the coming years.

Breakdown of the number of PoCs per company

Average conversion rate of PoCs commercialized or industrialized in 2016

6 —

500Startups, "Unlocking Innovation Through Startup Engagement:

Best Practices from Leading Global Corporations" https://cdn2.hubspot.

net/hubfs/698640/CSI/UnlockingInnovation500StartupsReport.

pdf?t=1504593895845

0-5

5-10

10-20

50+

10-15

50%

9.5%

21.4%

12%

7%

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Innovate for the 10% and avoid

being roI-centric too early

"If you’re making ROI a prerequisite to innovate, you are mistaken. You have to innovate, looking

to discover a value proposition and then begin looking for initial ROI and accelerating once

you’ve found it. It is also necessary to know how to kill off projects when the results are not up

to scratch. At Atos, we have results similar to those seen in the pharmaceutical sector for years:

for 20 current PoCs, half die, 8 out of 10 have added value, and only 2 from that are revolutionary

with an incredible ROI. If you have those 2, the other 18 are worth it."

— Steve Péguet, Director of Innovation, Atos

Skip seed startups

if you’re looking to scale fast

"A big pitfall is when startups do a PoC too early, when there are barely 4 or 5 people in the team.

When it comes to scaling, which means working with purchasing and technical validation, the

chances of failure are high with a seed startup. It’s possible to work with a smaller startup under

the following conditions: the product is solid and when it is not part of the corporate’s

core business."

— Valérie Gombart, Directrice Générale Hi inov,

Dentressangle Initiatives

Platform strategy means APIs

"Based on our experience building the innovation arm of Euler Hermes, if there was only one di-

rection not to be missed, it would be opening APIs to core assets of the company’s business mo-

del and evangelizing them towards deep innovators. We released the first open APIs to protect

B2B transactions from non-payment back in 2015, as well as the largest ever open data sandbox

with financial information about B2B companies in early 2016. This unprecedented API srategy

created the foundations of a lasting ecosystem which attracts the best startups worldwide now

to design a better future for B2B trade with "TradeFinTech". It not only started paying off for Euler

Hermes after only 12 months, it also woke up the entire industry."

— Christophe Spoerry, Co-founder, Euler Hermes Digital Agency

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Think scale, and have everything

formalized from the start

"In its relationship with a corporate, there’s always a challenge for the startup to see farther into

the future than the PoC being proposed. Constant reorganizations and turnover make it difficult

to know who your point of contact will be in six month time. For partnerships with clear targets,

such as purchasing or distribution, formalize PoC goals in your contract and agree on mutual

KPIs. What’s essential is to anticipate what happens post-PoC, at the signature of the agreement.

If objectives are reached and KPIs are all in the green, clear next steps should be layed out in the

form of a call for tender or a service or supplier contract.

Having a good relationship with your contact person is not enough, I have seen far too many

abandoned partnerships when the contact person changed jobs, in spite of the time and re-

sources invested on both sides. Have everything down in writing."

— Bertier Luyt, Managing Director, Techstars Paris

Build mutual trust,

it’s essential to scale

"My advice: make sure to build a relationship of trust between the startup CEO and the corpo-

ration. This personal relationship makes it possible to deal with subjects that are structuring to

the startup-corporate partnership, in particular the difficulties and challenges inherent in any

technological co-development project and when going to market."

— François Darchis, member of the Air Liquide Group

Executive Committee, overseeing Innovation

and Development

everyone seems a say that open Innovation is of strategic importance, and that they are backed by the Ceo. The money is yet to followThe holy grail of industrialization

is slowly becoming a reality

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—

The whole report is available on

startups-grandsgroupes.lafrenchtech.com

eleven companies had outstanding results across the study’s four categories: procurement, distribution, co-development and investment & acquisition. These companies were interviewed about their best practices

and experiences.

Methodological note: After receiving responses from the 41 participating companies,

questions were weighted, analyzed and scored against the total

sum of responses. Free response fields were also taken into ac-

count and scored using a standardized rubric. Answers were ana-

lyzed by category, with quantitative questions accounting for 75%

and qualitative questions accounting for 25% of the overall score.

Following the final scoring, startups were consulted to add further

depth and context in measuring free response questions and, ul-

timately, deciding on the three top companies by category.

45

CASE

STU-

DIES

CorPorATe

STArTUPS

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La Française des Jeux

Simplified and sensible purchasing

case sTudy

"don’t hack purchasing and legal, bring them along with you. This is where you’ll find some of your best partners in innovation."

The culture clash between experimentation (innovation) and risk management (purcha-sing) is often so strong that the first instinct of an innovation team is often to bypass the purchasing department rather than work with it. How do you manage that at FdJ? To be perfectly sincere, this culture of absolute

risk control is not just about purchasing, it’s

part of our DNA. In reality, it’s a money game

and the company can’t afford to run risks that

could lead to losses.

Even though I’m now Head of Open Innova-

tion, my experience in purchasing won’t al-

low me to ignore some of the fundamental

challenges that we face - managing risk. Our

strategy is not to ignore business lines and

support functions, we’re not playing God.

To develop a simplified framework condu-

cive to collaboration with startups, we had to

convince our stakeholders that the risks were

AN INTERVIEW WITH

Aurélie ClercHead of Open Innovation,

Française Des Jeux

47

limited because of the rather reduced playing

field of each experiment. It is necessary, on the

one hand, to protect ourselves from major risks

but also to be somewhat lenient with "minor"

risks when it comes to innovation.

You have opted for a unique approach to risk management. Instead of the usual 50-page saga forbidding every kind of risk, your contract with the startup Botfuel, for exa-mple, is only four pages. Can you tell us more about this case?Our partnership with Botfuel, a startup spe-

cializing in conversational services, centered

around the development of a chatbot on Face-

book Messenger that allows users to set up

their bet on ParionsSport PDV. The solution al-

lowed us to test a new channel (the chatbot)

for our sports betting offer, which was the first

of its kind in the sector. It was developed in six

months (from building the framework to in-

dustrialization) versus two or three times lon-

ger if we were to have used a standard project

method.

This speed of execution was made possible

thanks to the framework of our Open Innova-

tion approach that we set up with purchasing

and legal. For the experimental phase, we only

signed a 4-page agreement on the protection

of personal data and intellectual property, all

the other risks had been accepted from a bu-

siness point of view7.

what other "startup friendly" practices have you put in place? why is it important to you?We decided to pay the startup 50% of the

contract amount within one month and the

other 50% on delivery. You can’t take cash flow

for granted at a startup and making them wait

six months for payment can be fatal. We also

brought in human resources, ,a valuable asset

for young startups.

It’s really important for corporates to facilitate

collaboration with these partners. These diffe-

rent strategies won’t guarantee a PoC’s suc-

cess or that of a larger partnership, but they

will allow the startup to concentrate on crea-

ting added value while avoiding the stagna-

tion that can come into play because of these

longer processes, which they’re unable to ma-

nage.

what advice would you give to people who are trying this kind of approach with their own purchasing and legal departments for the first time?To develop a startup-friendly purchasing and

legal framework, you also need to know how

to create an advantageous relationship with

these departments. This can take the form of,

for example, appointing dedicated contacts

for collaboration, to save time and avoid confu-

sion. It’s important to find people on the inside

that already have an affinity towards open in-

novation who are likely to support initiatives.

The support of top management is, of course,

also essential.

Another key point is to provide complete infor-

mation to avoid putting employees in a posi-

tion where they feel that they have no choice.

It is also necessary to establish an ongoing

exchange between teams and transversal de-

partments to anticipate future projects.

As each start-up is different, it would be uto-

pian to believe that a simplified contract will

work in all cases. A case-by-case approach

must be developed without weighing down to

the process, something that can sometimes be

difficult to manage. Contractualization must

be simplified and adapted for risks.

PROCuREMENT

7 —

The contract between FDJ and Botfuel may be found at startups-grandsgroupes.lafrenchtech.com.

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Legrand

Startups and purchasing: a shared customer-oriented project

case sTudy

"don’t spend too much time on specifications -

go for it, test and experiment, you can go further

than you think."

The kind of advice that you share with us - as seen above - is pretty unexpected, parti-cularly from a large corporate. Can you tell us more? Pierre Laroche: Many Research and Develop-

ment departments talk about applying "agile"

methods and mindsets inspired by startups to

marketing, IT and product development. The

procuement department aren’t strangers to

this either!

Legrand’s recent collaborations with ear-

ly-stage startups have given us a wake-up call.

They’ve challenged the usual vendor selection

processes and opened doors for a new, more

flexible way of working.

AN INTERVIEW WITH

Karine Alquier CaroGroup Procurement Director

Pierre LarocheGroup VP, Reseach & Technology

49

Could you give us an example of where you’ve used this "agile" purchasing approach?Karine Alquier Caro: One partnership we’d like

to highlight is the Axiom 2 project developing

a connected security system with the startup

Arpinum, at our Legrand-Pyrénées site. For us,

the startup isn’t a subcontractor, but part of

the project team.

This means, we work on a the basis of trust,

rather than contracting. So we don’t work on

specifications, but share a vision of the product

and the orders following iterations.

How exactly did this work? PL: We have given the development and indus-

trialization teams the means to interact closely

throughout a continuous deployment process.

Concretely, we shortened the feedback cycles,

sometimes with several deliveries a day.

These incremental, frequent updates conso-

lidated into a new version every month al-

lowed us to test hypotheses directly with

Australian-based users, share progress with

stakeholders at any time, and move away from

"contractual" reviews that could be a source of

conflict.

These processes don’t mesh with the conven-tional way of measuring the project progress in a large corporate. what challenges did you face in adopting this new way of working?KAC: One of the challenges was not to follow

our traditional internal processes and to ac-

cept the supplier despite everything. It really

didn’t fit our usual criteria! The real challenge

was to start the partnership without a set of

specifications.

This challenged traditional vendor selection

processes from the start. To a certain extent, I

think the most difficult thing is to stop focu-

sing on measuring project progress and just

trying to move forward and get it done.

How would you rate the results of this colla-boration with Arpinum?

PL: The first visible result: a project team that

is very committed and motivated, rather than

stressed. A lot of exchanges, communication,

a lot of support and good humor, and a bet-

ter understanding of the concerns of others. So

overall, it’s a project that’s progressing well. In

the end, the solution resulting from the Axiom

2 project will be released on time; customer

satisfaction has been assessed as development

progresses so that the product meets market

expectations. Today, our Arpinum partners say

of us: "We started out in two different but were

able to converge and work together."

what’s next for"agile" purchasing at Legrand? KAC: Now, the next move is to transform the

trial. We have to work internally in order to

move from "buyer" to "innovator". That is to say:

provide the vision of "Customer Solution" ins-

tead of "Project Process", and move from spe-

cification to collaboration. The Axiom 2 team

at Legrand Pyrenees served as a "laboratory"

for experimenting with a new type of project

team organization. These methods are pro-

gressively being rolled out in other areas, no-

tably in Limoges, the headquarters of the Le-

grand Group.

PROCuREMENT

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Total

Each branch the architect ofits own success

case sTudy

"The goal of an innovation team shouldn’t be to centralize all collaboration with startups but to catalyze transformation and build synergies across different branches that practice open innovation."

A few weeks ago, you were rated #1 in the 2017 eCAC40 rankings on digital maturity. How do you think digital maturity and open innovation are related? At Total, they are the same thing for a good and

simple reason. Innovation, open or otherwise,

is not centralized at the corporate level and

is divided into operational branches: global

services, gas, renewables, and power. When it

comes to innovation, each branch is the archi-

tect of its own success and freely determines

its own objectives, initiatives, and the speed at

which it is ready to innovate. This of course in-

cludes digital strategy.

AN INTERVIEW WITH

Michael offredi Digital Ecosystem

& Innovation Officer

51

PROCuREMENT

And yet your team operates on a corporate level. In a company where innovation is de-centralized, could you give us some concrete examples of your role as digital ecosystem & Innovation officer?We see our team as catalysts at the service of

our operational branches. Concretely, we faci-

litate the innovation initiatives of each branch

by establishing specific processes between

many moving parts within Total. We find ways

to accelerate the contract process for startups,

provide adapted contract documents and

other tools at the service of operational staff,

including the advice of a team of lawyers spe-

cialized in start-ups specifically.

We also create space for innovation - both digi-

tally and physically. Our digital platform "adopt

a startup" for example, identifies the startup

partners of the group and details associated

use cases. This past February we also establi-

shed "Booster", a 700m2 space in our HQ de-

dicated to innovation and where we organize

in-house meetups that raise awareness among

employees and encourage the sharing of best

practices related to innovation.

You mention "adopt a startup" as a separate platform for identifying and disseminating information about partner startups in-house. why build a separate platform just for star-tups as opposed to integrating existing da-tabases?Our current vendor platforms were built for pro-

curement departments that process vendors in

a fairly traditional way. The use cases just don’t

match. That being said, these are challenges

that we are wrestling with and I definitely see

us integrating startups into the procurement

process alongside conventional vendors in the

near future.

You’ve been in this game with many different hats: procurement, CvC and now innovation. But before that, you were once a startup foun-

der who worked with Total as a customer. How do you bring that experience to your work today? I’ve worked at a startup so I know that Total

will never be a startup, nor do we want to be

one. But like a startup, we have a lot to learn

under uncertainty and budget constraints.

Startup culture and methodologies help. As a

former startup founder, continuous iteration,

rapid prototyping, and collaboration aren’t just

buzzwords I’ve picked up, but tools that have

long been a part of my day-to-day reality.

It has also helped me develop empathy, so-

mething extremely important for a CIO. Em-

pathy isn’t a preference for startups, but rather,

a deep understanding of their constraints. For

example, the value of an entrepreneur’s time

isn’t theoretical to me - I know what it’s like to

be burning cash each day. For this reason, I ad-

vocate against the kind of "innovation tourism"

that is rampant in corporates, and I make it a

point to educate peers and colleagues about

the difference between working with partners

with big pre-sales budgets and working with

startups.

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Atos

Open innovationas a leitmotif

"If agility is essential for startups, what corporates like us need is flexibility."

You are in a rather unique position, compared to other companies surveyed in this Baro-meter: you collaborate with startups in the context of projects with clients. Can you tell us more?Yes, internally, this is what we call "everyday in-

novation." It’s used for contracts that support

the use cases of our customers, focusing ins-

tead on incremental innovation - continuous

improvement rather than breaking innovation.

We have a catalog of 200 qualified startups that

we already have a partnership relationship with

and that we can draw from, depending on the

projects that will be carried out with our cus-

tomers. But in the end, this represents only 30%

of our partnerships with startups.

70% of our partnerships take shape in an open

innovation approach with our clients and star-

tup partners. This is particularly exciting me be-

cause we go beyond a customer/supplier rela-

AN INTERVIEW WITH

Steve PéguetInnovation Director France

Atos

53

DISTRIBuTION PARTNERSHIPS

tionship with our shared clients and have the

right to experiment (and also to make mistakes)

in order to innovate. If ROI is your prerequisite

to innovate, you’ve made a mistake. You have to

innovate, then find your ROI and only accelerate

once you’ve found it. It is also necessary to know

when to kill a project when the results are not

where they should be. This is not possible when

we work with clients in the context of perfor-

mance-based contracts.

working with clients means having to work with a pool of very diverse startups. How do you go about it?Of course, we have our database. But to be

honest, its value is relative given the speed at

which the landscape changes. I think it’s bet-

ter to have a dynamic ecosystem and a quali-

fied pipeline, rather than a fixed list. Moreover,

we do not systematically go to the list: first, we

identify the our client’s challenge, then we will

look for innovation where it can be found - in-

ternally, at an SME, with a startup, a corporate

partner, etc. For this, we’ve set up several cir-

cuits. We work primarily at the local level with

innovative ecosystems: incubators, business

clusters, research laboratories, etc.

75% of respondents adapted their process for startups. we know that your processes are different. what can you tell us about it?There is a relatively standard part, which falls

under generic best practices: sign an NDA to

work together on a common value propo-

sition, sign a letter of intent to tackle a first

go-to-market with different responsibilities

for each side to produce a pilot or PoC for our

clients. Then, once this go-to-market has pro-

ved its value, comes the partnership contract

that then defines the terms of our distribution

partnership - or beyond.

The truth is, what speeds up the process is

rather simple: it’s the fact that I manage them

myself. This is for several reasons. First, it’s about

adapting the processes each time. A fixed and

unique process would be unnatural, because

it doesn’t give any leeway for errors. Also, the

goal is to get on the ground quickly, not to get

caught up in corporate processes and then to

bypass them. I’m convinced that if agility is

essential for startups, corporates like us need

flexibility - the ability to move processes, when

necessary, even those that are well-anchored,

to serve innovation.

we noted that Atos France had issued about twenty PoCs. How is your team structured to manage them?I don’t have a team, much less a permanent

one. I’d rather have a large budget than a big

team. When you have a fixed team, you have

no choice but to use the resources you have at

your disposal. With a larger budget dedicated

to open innovation, you can build ad hoc teams

around the startups you collaborate with and

bring in the experts you need.

Scaling up is a challenge for most respon-dents. what is your point of view on this?In our case, this is not really a challenge. Our

know-how is industrialization in IT. We know

how to scale, internationalize and accele-

rate deployment in new markets. You have to

adapt according to the maturity of the star-

tup, but startups in the phase of expansion -

called "growth stage" - know that we are good

partners when it comes to the next level.

On the other hand, things are a little more

complicated with connected objects. In this

field, it is usually the startup that has the in-

tellectual property and needs to industrialize.

IT cannot do it for them. The moment comes

when you have to "plug the machine in," where

you need financing. And we don’t do that, we

don’t want to create dependencies.

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AXA

Partnership is a mindset, not a formula

"It’s more a question of people than processes."

Your title reads AXA Partners, which seems fitting considering your performance in this category. Could you tell us more about this team?AXA Partners, created two years ago, is an

AXA Global team dedicated to co-build, with

Partners, unique solutions across various sec-

tors: Automotive, Mobility & Travel, Protection

& Health, Home & utilities, Telecommunica-

tions, Retail, Bancassurance and Global Assis-

tance.

why would you say your company is ramping up partnerships?AXA Partners leverages on two main pillars:

AXA Assistance as well as AXA Credit & Li-

festyle Protection. Their assets enabled AXA

Partners to become even more relevant. AXA

Partners can now widen its offers and capa-

city to scale solutions to better anticipate and

AN INTERVIEW WITH

Inji CharkaniChief Innovation Officer

at AXA Partners

55

DISTRIBuTION PARTNERSHIPS

meet the needs of our customers/partners

by meeting them where they are. Innovation

today is at least as much about collaboration

and co-creation.

what have been the results of that strategy so far?A new Operating Model has been designed

so as to reap the best of our collective assets.

Our partnership deals are currently being

strengthened. Open Innovation Programs just

launched, so AXA Partners is in motion.

You deal with dozens of partnerships a year. How do you handle distribution partnerships with a startup differently than with say ano-ther company from the CAC40 or SBF120?For example, on the procurement side, when it

comes to dealing with startups, the Group has

developed what we call a "Fast Track".

In other words, we have created lighter and ge-

neric contractual clauses to make sure that the

procurement process is a fast as possible. In-

deed, time is a valuable asset for everyone but

especially for startups.

what are two things that help you work with startups?The first is our rich innovation ecosystem that

helps us collaborate with startups at every

stage:

· Kamet is an InsurTech startup studio

· AXA Next via two labs to scout both emerging

trends and startups, focusing on Silicon Valley

and Asia.

· AXA Strategic Ventures, which is AXA’s dedi-

cated investment fund with €275 million un-

der management.

· AXA Partners, presented earlier, provides us

with another layer of co-development innova-

tion with these key partners.

All the different aspects of this ecosystem work

together on a regular basis. They coexist along

with our operational entities’ innovation teams

located around the world. Their mission is to

create products and services adapted to local

markets and then to share their best practices

with us so that we can then push those across

the entire Group.

The second is the participation in external

programs/events (e.g. CityMakers, an open

innovation program that experiments innova-

tive solutions for accelerating the transition to

flexible and sustainable urban mobility). This

open innovation program is AXA Partners’

first pilot working with both corporates (in-

cluding Renault, Nissan, RCI Bank & Services

and Paris’ City Hall) and startups.

You started in your new position one year ago now. what is your key takeaway?The most important thing to have is the

partnership mindset while making sure we

create value for the end customer, our partners

and for us as an insurer. At an operational point

of view, addressing key customer pain points

through their journey is fueling our project pi-

pelines. Whether it’s externally with a startup

or a corporate, or even internally with your own

ecosystem, it’s important to build trust, un-

derstand each other’s motivations, complete

each other’s strengths and, finally, keep on

learning, sharing and delivering.

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Unibail-rodamco

Mobilize, train and get employees involved, the winning trio for a successful project

case sTudy

"Get buy-in from top management and raise awareness about your challenges (they have the same challenges, too)."

You recently succeeded Matthieu Nicoletti as director of Ur Link, can you tell us what the program is all about?uR Link is the name of our startup accelerator

which was founded two years ago. We are cur-

rently launching our fourth season and have

already accelerated 19 startups. Each accelera-

tion phase takes about four months.

At unibail-Rodamco, the innovation depart-

ment has been in place since 2012. It was histo-

rically located outside the Group’s head office,

but two years ago the decision was made to

integrate back it into the company’s headquar-

ters. This change is optimizing our work with

Bus and improving our operational links.

AN INTERVIEW WITH

Jean ColletDirector of uR Link

unibail-Rodamco’s startup

accelerator

57

In large companies, there’s some skepticism around accelerators that are separate from BUs. How do you overcome that?At uR Link, innovation is not monopolized

by an isolated working group. We work in

constant dialogue with Bu directors and we

choose startups based on the expectations

and needs expressed by the Bus. In addition,

the themes we cover are linked to the major

strategic issues set by the Group (circular eco-

nomy, customer knowledge, carbon impact

reduction, etc.) This allows us to avoid the risk

of an innovation "silo".

You recently established a key distribution partnership with the startup dress in the City. Can you tell us about the nuts and bolts?Dress in the City is an omni-channel clo-

thing-swap concept that is both physical (wit-

hin unibail-Rodamco’s shopping centers) and

online. unibail-Rodamco has enabled the star-

tup to increase significantly in power: we have

financed their development, put locations at

their disposal, and worked with them daily on

operational issues.

Is this just a question of exploring new ideas or is this project of more strategic importance for the Group?This project involves a major stake in trans-

forming modes of consumption. For uni-

bail-Rodamco, a historical player in commer-

cial B2B real estate, this first step in the world

of circular economy is a real change of culture.

That said, we never have a fixed solution in

mind when we start talking with startups. We

iterate and co-develop co-develop solutions to

find use cases adapted to our challenges. We

test in a few, limited locations and see if it’s

conclusive before industrializing.

what kind of team dynamic is in place for this initiative?The setting up of a distribution partnership

brings together three key elements:

• uR Link discovers startups and supports the

implementation of the partnership through

mentorships, trainings, and the implementa-

tion of concrete tests related to our strategic

priorities.

• A member of top management is responsible

for the strategic supervision of the project. In

this case, the project was monitored by the

Marketing Director and the General Manager

of Operations of unibail-Rodamco.

• With management’s approval and in coordi-

nation with HR, a project manager from the

relevant Bu devotes one day a week to make

sure that the project remains focused on bu-

siness needs. 20% of the project manager’s

time is allocated to the partnership during the

four months of acceleration.

what advice can you give teams launching their own open innovation projects?If possible (that is, if it exists), go through an

outside structure that is at the heart of the bu-

siness. Get buy-in from top management and

raise awareness about your challenges (they

have the same challenges, too).

Do not forget to prepare Bu project managers

on startup culture to facilitate a smooth inte-

raction between different work-styles.

Know your market and choose the right

partners!

And most importantly, set a vision and long-

term goals, but stay flexible about how to

achieve it.

DISTRIBuTION PARTNERSHIPS

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Air Liquideand Solidia Technologies®

Start small: respect, trust, agility and modesty

case sTudy

"My advice: establish a relationship of trust between the startup Ceo and the Group."

Most of the co-developments that we have come across in this study deal with software. Air Liquide stands out with a uniquely phy-sical case. what can you tell us about this partnership??Air Liquide has teamed up with the uS star-

tup Solidia Technologies® to provide carbon

dioxide (CO2) injection equipment to produce

Solidia Concrete™.

Specifically designed by Air Liquide in col-

laboration with Solidia, this equipment will

demonstrate the feasibility of the industrial

production of this special concrete, whose

breaking technology lowers curing time to

less than 24 hours, reduces water consump-

tion and captures large amounts of CO2, all

while significantly improving the quality of

the concrete. In addition to supplying the pro-

AN INTERVIEW WITH

François darchisMember of the Executive

Committee of the Air Liquide

Group, overseeing Innovation

and Development

59

per equipment, Air Liquide will become the

unique worldwide supplier of CO2 used speci-

fically in Solidia’s patented processes. Through

this innovative partnership, we are opening a

new market for the use of carbon dioxide in

the precast concrete sector.

LafargeHolcim, a leader in cement production,

has also decided to build a partnership with

Solidia.

despite the complexity of the industry, the average time spent at Air Liquide to support this co-development partnership is the same as for most companies that co-develop mo-bile applications! do you think there are fundamental diffe-rences between the two?In fact, at Air Liquide, we do both. We have

many partnerships with startups and have in-

vested in 30 startups since the creation of our

venture capital structure in 2013. In the end,

whatever the activity of the startup, we always

try to respect the best practices that we’ve

learned, namely:

• Start small or "smart small" as we like to say,

meaning limit the project in time, geography

or market.

• Establish a relationship of trust between the

startup CEO and the Air Liquide Group. I can not

stress this point enough, but co-development

does not follow a straight line, and human in-

teraction needs to function at the highest level

because it structures the relationship between

the corporation and the startup.

• Finally, to anticipate issues, it’s important to

bring in IP and purchasing departments from

the very beginning of the partnership. With us,

for example, IP is at the heart of the innovation

team. The startup collaboration must be desi-

gnated as a priority for these departments, in

order for the collaboration to have speed and

agility.

You are also a rather dynamic investor. How do you make the link between your corporate venture capital activities and your co-deve-lopment partnerships with startups?We invest in startups as a minority investor

through our venture capital structure and go

on to monitor their capital increases to as-

sist them in their development. Each equity

investment is accompanied by a business

partnership agreement or R&D with the star-

tup. This is a specificity of Air Liquide’s minority

investments in startups.

what advice would you give someone tackling a similar job?Respect, trust, agility and modesty ("smart

small") are to me the key words for a success-

ful technological co-development partnership

between a corporation and a startup. For me,

this type of partnership relies primarily on

creating a human relationship and having

complementary expertise on both sides for

meeting a customer use case. This translates

to a commitment on both sides, as part of a

win-win, respect-based approach.

It’s also necessary to involve all the stakehol-

ders from the beginning of the project, even

before the signature of the contract. This is

why it’s important to promote the PoC and

to communicate internally, to show that the

innovation project is meant to be duplicated

and deployed, and to move from PoC to in-

dustrialization.

CO-DEVELOPMENT

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BNP Paribas

BNP Paribas Startup Engagement Kit

case sTudy

"our challenge today: to foster an open innovation ecosystem at the international level by relying on local ecosystems across our footprint."

Your team is at the center of many innovation projects, collaborating with teams in diffe-rent countries. How are you able to coordi-nate teams, manage projects at the interna-tional level?It hasn’t always been easy. Depending on the

country (appetite, maturity, etc.) some projects

have run into difficulties in their implementa-

tion (in terms of process, budget, sponsorship,

IT or local regulation). When you want to work

with startups, these challenges can be real

obstacles.

In recent years, we have decided to implement

a corporate approach to coordinate co-deve-

lopment partnerships that we form with star-

tups. This is the essence of the Startup Enga-

gement Kit, a toolkit for BNP Paribas project

AN INTERVIEW WITH

Sophie HellerChief Operating Officer,

Retail Banking & Services,

BNP Paribas

61

managers and startups that are co-developing

projects with them. It’s a kit organized around

a series of tools: a standard confidentiality

agreement, simplified contract models to be

adapted according to the specificities of the

country, a sandbox of anonymized data (a pack

of anonymized customer profiles made avai-

lable for experimentation), recommendations

to better manage the launch of the project,

as well as lighter processes in terms of pur-

chasing, compliance, IT and security. It brings

together BNP Paribas’ commitments to foster

and accelerate collaborations with startups.

Initiated at the corporate level by PACE

(Partners in Action for Customer Experience)

and launched in test and learn mode with BNP

Paribas entities through the Startup Practice of

IFS (International Financial Services), the Star-

tup Engagement Kit brings together all major

corporate functions (IT, Security, Purchasing,

Legal Affairs, Compliance and Finance).

Can you tell us more about the objectives of the Kit and what it contains?The Startup Engagement Kit provides a refe-

rential framework for all BNP Paribas Group’s

business lines to facilitate cooperation with

startups. From a customer-centric approach, it:

· Improves the fluidity and transparency of

procedures

· Allows the quicker realization of innovative

ideas

It brings together the group’s main functions,

adapted to improve co-development pro-

cesses with startups, around six commitments:

1. Facilitate the connection of the startup with

the right person within the organization.

2. Rapidly provide the startup with feedback

on the potential launch of the project.

3. Present BNP Paribas’ procurement, com-

pliance, legal, IT and security requirements to

the startup from the outset.

4. Propose simple and clear contract templates.

5. Plan and monitor the project in close col-

laboration with the startup and propose a

"sandbox" of data (more than 100,000 anony-

mized customer profiles made available for ex-

perimentation).

6. Pay the startup in 30 days.

what are the results so far?Since the launch, many projects have been

using some or all of the elements of the kit.

PoC’s contract templates - 5 to 14 pages, far

from the 43 pages of a SaaS contract - have

been used extensively. Our internal accelera-

tors, Fintech Boost by L’Atelier and BNP Pari-

bas Plug & Play, use the kit every day and help

us improve it through regular feedback. We are

still in the process of ramping up the various

entities of the BNP Paribas group worldwide.

Overall, this approach, which allows us to inte-

ract with startups and local actors on a simple

and clear basis, is unanimously welcomed.

Now that you have this Kit, what’s next?Continue to disseminate the Kit as widely as

possible in each of our entities and help mana-

gers working on startup relationships to adapt

the Kit to local specificities.

We also want to cover more situations. At the

moment, partnerships focus mainly on PoCs

and pilots. Next step: large-scale deployment.

CO-DEVELOPMENT

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MAIF

How to build a scalable innovation culture in a large insurance group?

case sTudy

You lead the Sharing economy and emerging Practices team at MAIF, which works along-side two other sister teams - digital and In-novation. Tell us a bit about your team and its organization? Although we had already been working on

these topics, we were officially created in Ja-

nuary 2015 as part of the current strategic

plan’s launch. We went from a team of two to

six, including two teammates that came from

the outside - colleagues familiar with design

thinking, "newbiz", emerging practices, test

and learn, etc. The team today is also supported

by colleagues on fixed-term assignments.

You act as a bridge between an internal com-munity and an external community. How do you go about it?

AN INTERVIEW WITH

Thomas ollivierHead of Sharing Economy

and Emerging Practices

at MAIF

63

CO-DEVELOPMENT

The Sharing Economy Team brings new ideas

and then finds the right people, internally and

externally, to bring them to life. Our team is the

guarantor that defines our company’s strategy

on sharing economy and emerging practices,

and also facilitates its execution.

Our role, as explorers, is to discover and inte-

ract with many external contacts, and to find

and understand new uses and aspirations.

It’s similar internally, where we explore new

frontiers and the changes taking place in a

transforming insurance company. In fact many

of our colleagues are motivated and rightly

concerned by the peak of the traditional use

economy, but they are also often faced with

new ways of doing things. Sometimes they also

directly encounter the paradoxes of a com-

pany like ours, where there is a "legacy" to ma-

nage, continuing the short-term development

of the company, while also needing to project

and prepare for what’s coming next. Our role

is also to facilitate the coming together of this

fast-moving "external" world and our "inter-

nal" world that is undergoing a lot of change.

We sometimes play the role of interpreters

and facilitators, and ultimately contribute and

encourage internal teams to begin their own

transformation through experience, and to en-

courage practical action that leads to good re-

flections. This hybridization strategy brings to-

gether onto the same plane our company that

is being transformed in the context of a rapdily

changing world.

Overall, the unifying thread in this framework

is our hybridization strategy. We combine new

uses, emerging practices with MAIF’s core bu-

siness, and it continues to evolve as these pro-

jects progress.

Hybridization brings two things: it allows us

to "pivot" on our core business, that is to say to

do insurance differently, but also to effectively

open us up to new territories of legitimacy,

where we can build on the periphery of our his-

torical business as insurers. Moreover, it creates

a virtuous circle where the departments that

keep MAIF alive today directly contribute to

supporting departments like ours that are res-

ponsible for preparing the future.

Could you tell us about a use case that illus-trates this way of working?Our collaboration with the startup MesDé-

panneurs is an obvious example - a platform

of trusted craftsmen, specialized in domes-

tic troubleshooting and small jobs. The goal

of this project was to improve the customer

experience as well as the experience of MAIF

managers. We relied on two vectors: enriching

MAIF’s service and the resolution of an essen-

tial "pain point", the failure to take care of our

members.

To achieve this, we went through four major

stages. First of all, it was necessary to identify

the strategic partnership opportunity and on-

board the collective. Then we needed to start

implementation, defining the partnership

framework and its modalities. This step was

special because the two different work cultures

had to be brought together. Then came the

project’s operational phase, and finally the

alignment phase, for executing and accelera-

ting the project at the right time.

ultimately, the key point was to coordinate

strategic intent and operational deployment,

knowing when to pass the ball at the right

time to the department directly concerned.

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Crédit Mutuel Arkéa

Ensure digital championsemerge

case sTudy

"It is our responsibility to encourage the maturity of our ecosystem by fostering innovation and helping draw out future digital champions."

Could you share with us your investment and partnership strategy? How do you manage to establish clarity of intent and alignment with your strategy?In the context of global competition, we consi-

der it our role to bring rich ecosystems to life

and to promote their maturity - thus pulling

everyone up. By joining forces, we increase eve-

ryone’s chances of success.

Our investment strategy and partnerships aim

to build long-term relationships built on trust

using services that prefigure those we expect

to have in the banks of tomorrow.

This concretely translates to:

- Direct investments in companies that we

work with to create digital champions for the

sector, such as Younited Credit, Leetchi, Fluo or

Pumpkin.

AN INTERVIEW WITH

Anne-Laure NaveosManaging Director - M&A,

Strategic Investments,

Digital Crédit Mutuel Arkéa

65

- Investments in funds that share the same

hub and ecosystem logic, such as Daphni,

Hardware Club, or the West Web Valley.

We make sure to respect 3 simple rules in our

partnerships with startups:

- Achieve all business synergies that will acce-

lerate growth.

- Preserve the autonomy of key functions.

- Maintain managers with capital.

These principles preserve our strategic align-

ment.

These ecosystems that you refer to are inter-nal and external. How do you manage to be at the heart of both? This model of network operation and ecosys-

tem logic is used both externally and internal-

ly, in fact, to increase the chances of our own

strategy’s success.

Positioned as an established, mature, and

regulated player, we are organized to be effi-

cient and reliable. But in an environment that

accelerates and requires everyone to reinvent

itself, it is vital to be agile and fast at the same

time.

This is why, in addition to the hierarchical

structure and traditional project/task force

methods, we created the Square of Arkéa to

pilot strategic projects in a transverse way.

The Square is composed of:

1. A tight team that mobilizes and connects

talents from within the diversity of the corpo-

ration, volunteering to contribute to the rein-

vention of our model. It has no hierarchical

power, but draws its strength from common

sources of inspiration, a shared vision and a

lot of determination.

2. A community of volunteers who work

among themselves and with the rest of the

company to propose and implement the best

strategic options in each of our businesses.

The result: an organization that combines

the efficiency and reliability of an established

structure with the agility and speed of a more

informal network.

How does this logic work with your partners, your hierarchy, and especially with your exe-cutive Committee (CoMeX)?Another challenge is, of course, to reconcile

strategic alignment in the long term with a

startup’s need for autonomy in carrying out its

development.

To ensure this alignment and optimize business

synergies, we have, for example, set up a close

follow-up with our partners: this involves mon-

thly gatherings, conducted by internal teams

formed in pairs or by less regular meetings with

the Group’s Executive Committee.

INVESTMENT & ACQuISITION

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MAIF

A CVC, not a bank

case sTudy

"A startup must always seek growth, we don’t want to create a relationship of dependency."

To start, can you explain what MAIF Ave-nir does, and its place in MAIF’s innovation strategy?MAIF Avenir is a direct and indirect investment

fund (also investing in third-party funds). Our

focus is on transformation and how its challen-

ges deeply impact society, and of course, those

of the company. The sharing economy is a

large universe, and this focus helps us to select

uses and models that can directly contribute

to our understanding and investment in strate-

gic issues - such as those around the sectors of

housing or mobility. MAIF Avenir is a fully-in-

tegrated part of the Group, serving its major

transformation strategies, particularly digital

and innovation, and naturally the sharing eco-

nomy.

MAIF Avenir is managed by a fund manager

(Milène Grehan) and serves a transversal role

AN INTERVIEW WITH

Thomas ollivierHead of Sharing Economy

and Emerging Practices

at MAIF

67

across the entire organization. With regards

to the Sharing Economy strategy, we define

an investment approach that is presented to

top management for adjustment and valida-

tion each year. This allows us to be proactive in

sourcing, managing the flow of incoming de-

mands more efficiently.

Can you tell us more about how MAIF Avenir operates and how it works with its internal and external partners to embrace this trans-versal role across the Group?In the case of the Sharing Economy team, we

first define business challenges that we then

validate with top management. These bu-

siness challenges define our investment thesis

as well as our portfolio management strategy,

and therefore our relationship with our startup

partners.

At the level of MAIF Avenir, a dedicated team

receives and manages solicitations through

our website (maif-avenir.com). This team

serves as a filter, assessing interest and fit, and

then directing the opportunity to the appro-

priate business or Bu based on their business

challenges to follow through on the lead.

In the Sharing Economy team, we’ve created a

system where a specific employee is the main

point of contact of one or more startups. Once

the lead is transformed, we create a project

team around it to drive it forward.

In general, after preliminary sourcing and

when a true connection with a startup is

made, we then take the next step of launching

a pilot project, a PoC or some other kind of

operational relationship. This may eventually

trigger the investment process, depending on

the results and the short/medium/long term

convergences.

what commitments do you put forward to build a relationship of trust between the va-rious internal and external stakeholders? We place a lot of importance on team fit. I also

think it’s important to avoid excessive Group

interference. We go through each partnership

and ask questions about the ambitions of the

startup, what it fears, how it wants to work,

etc. to ensure this isn’t the case and reassure

stakeholders. We then adjust the agreement so

that everyone’s interests are properly aligned.

Today there are obviously many startups that

apply, but we must be able to see potential

operational convergences that we’ve identified

and registered as part of our own transforma-

tion strategy. Otherwise, we cannot accept an

application. If that ends up being the case, we

inform the startup quickly and transparently.

We know time is sacred for startups raising

funds.

Beyond that, when unexpected events or dif-

ficulties arise, we put in our maximum effort

to dialogue, to be transparent, and to work

with the startup proactively and in good faith,

while of course taking into account our own

constraints. ultimately, we seek to build rela-

tionships of trust with our startup partners to

allow us to move forward effectively. This en-

sures we can take up challenges together, but

also to set each other straight when necessary.

I believe that a good relationship with foun-

ders can and should take the form of simple

feedback. It can also include refocusing a pro-

ject roadmap or even raising questions about

administration or management. But the end

goal should always be the startup’s develop-

ment.

We believe that this creates a bond of "perfor-

mance and community" that our startup partners

have themselves called the "#MAIFAvenirFamily".

INVESTMENT & ACQuISITION

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orange digital ventures

A startup-friendly corporate venture capital fund

case sTudy

"Find a balance between financial returns and smart money."

Talk to us about orange digital ventures (odv).ODV is the corporate venture capital fund of

the Orange Group, led by a dedicated and mul-

tidisciplinary team of 12 people. It is chaired

by the Group’s Chief Operating Officer, Pierre

Louette. It has a budget of 150 million euros for

minority investments in the early stages of de-

velopment (from Series A) over five years. These

funds are invested in areas that are strategi-

cally related to the Orange Group’s interests,

including: telecommunications, digital trans-

formation (SaaS B2B, the cloud, big data, AI...),

Fintech, Internet of Things and Africa through

Orange Digital Ventures Africa.

what types of pitfalls did you observe in CvC?By nature, a Corporate Venture generally com-

bines financial objectives coupled with strate-

gic issues with a "smart money" dimension.

Some corporate ventures have purely finan-

AN INTERVIEW WITH

Yann KandelmanHead of Investments

& Development Orange

& Orange Digital Ventures

69

cial objectives, are completely independent

and are closer to traditional VCs. Others put

the strategic objectives at the center of their

approach. This may lead to practices that are

not compatible with good practices in risk ca-

pital: right-of-first-term type clauses that will

hurt the liquidity of the start-up, the need to

sign partnership agreements with the startup

that can extend the decision cycle and/or defo-

cus the startup, the absence of an adequately

sized envelope around the logic of a diversified

portfolio of startups and resources for reinvest-

ments, etc. ultimately, this can create strong

tensions amongst all shareholders. The delays

are too long - it is a barrier to investing in the

best startups in a competitive environment.

Finding the right balance between a purely fi-

nancial fund and a strategic fund is therefore

the key, and the difficult equation that CVC

funds need to address.

what is odv’s genesis story?The ODV adventure started with the construc-

tion of a team, an investment project and a

shadow portfolio. The shadow portfolio is an

investment approach that is, both, compatible

with the expectations of the ecosystem and

that creates financial and strategic value for

the Group.

We designed it collectively, step by step:

• First, the buy-in from key decision-makers. We

validated an investment envelope, and chose a

governance and decision-making scheme.

• Second, the implementation of the process,

the governance system, and the reporting sys-

tem, clearly defining responsibilities.

• Finally, working with the management team,

legal and financial teams, and consultants on

the rhythm of operational activities.

what would you say have been the biggest challenges to the initiative? Creating a quick and agile process within a large

corporate hasn’t been easy. We needed to find a

balance between financial return, standard private

equity approaches, a startup mindset, and a strate-

gic objective of "smart money" - meaning invest-

ments made with Orange in mind, with opportu-

nities for synergies and learning for startups and

for Orange. Of course, we also had to think about

the scalability of the initiative and its sustainability.

One major challenge was that we had to create

new processes outside the existing governance,

which is inefficient for this type of investment. We

needed to set up a qualitative deal flow and take

into account the limited resources of startups

which made the quick and effective implemen-

tation of post-investment synergies a priority.

Some compartmentalization within the organiza-

tion has been unavoidable, and we’ve had to accept

the existence of a Chinese wall between the ODV

teams and the rest of the Group regarding any confi-

dential information from start-ups in our portfolio.

We have also had to respond to statements of

principle made by policy makers, nervous about

the arrival of new entrants, on Corporate VCs.

what were the main benefits of the CvC ap-proach?This approach has allowed us to:

• Attract the best startups in the Orange ecosystem

• Develop a privileged relationship with them

and facilitate synergies with the Orange group

Make quality investments with a good prospect

of financial ROI (first exit with excellent IRR)

• Share highly qualified feedback with the

Group on the trends underlying the ecosystems

of the studied startups: Fintech (blockchain,

robo-advisor), new telecom models (sponso-

red data, new sat, mesh networks), etc.

After two-and-a-half years of existence, what does your balance sheet look like?We have managed to set up a fast and agile

process. We have already completed 15 invest-

ments and 7 reinvestments. Startups that have

joined us can: rapidly gain access to long-term

financing with "patient" capital; benefit from

having been vetted by an established investor

who can reassure their partners; and especially

take advantage of a “smart money” approach,

developing synergie with Orange assets.

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The French Tech Barometer of startup-corporate collaborations is an annual study which looks to objectify and improve the interactions between these two types of economic players. It creates a referential with positive standards for the entire ecosystem.

1 —A questionnaire sent to corpo-

rates based on an established

referential: over 60 questions

on quantitative and qualita-

tive criteria measuring the

depth of relations with star-

tups.

2 —Individual interviews to with

startups cited by corpo-

rates (two qualitative startup

interviews per corporate res-

pondent), with the objective

of offering a balanced view on

the subject.

3 —A series of case studies which

detail best practices and

concrete measures for both

corporates and startups.

meThodo-Logy

The BaromeTer’s comPonenTs

71

caTegories

Collaboration practices are segmented into four categories,

chosen by the Barometer team and confirmed by our Sounding

Board. The objective is to highlight a set of coherent practices

to cut through the clichés surrounding open innovation.

• Procurement processThe startup provides a product and/or solution to the larger company.

• Distribution Partnerships The large company distributes the product or service of a startup,

or vice-versa.

• Co-developmentThe large company and the startup share resources (talent, patents, capital,

etc.) to design and develop new products or services without creating a new

legal entity.

• Investment and AcquisitionCorporate venture

the large company buys a minority stake in the startup.

Acquisition

the large company buys a majority stake in the startup (or acquires it outright).

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Since 2015, the French Tech has become a part of the French

Digital Agency (L’Agence du Numérique) at the French Ministry

of the Economy and Finance.

Investors and startups join forces to become

French digital champions.

www.francedigitale.org

The think tank of high-growth tech

entrepreneurs.

thegalionproject.com

They support the Barometer

The barometer is an initiative of the French Tech

The "French Tech" is the name used to designate the French startup ecosystem, whose

growth over the past five years has been one of the most spectacular of any around

the world.

In 2013, the French government, led by the Ministry of the Economy and Finance,

created the public initiative French Tech to publicize and accelerate this major driver

of the French economy, with an objective of benefiting French startups. Its functions

include: spreading a startup culture across France; developing awareness of French

startups around the world to attract international investors and talent, federating a

range of entrepreneurial communities which were created to structure the French ecosystem at the

local, national and international level; and finally, to drive government actions to accelerate the eco-

system’s maturity by, for example, increasing international or social diversity.

Since September 2017, the French Tech has a new space: French Tech Central – located within the

Paris-based Station F, the largest startup campus in the world. This rallying point for the entire French

ecosystem brings together over 30 different public services dedicated to startups, in addition to hos-

ting representatives of public research institutions.

The founding partners of the public initiative French Tech financed by the Investments for the Future

program are:

73

Under the authority of the Minister for the Economy and Finance

Affairs, the DGE is tasked with developing and implementing go-

vernment policy for industry, the digital economy, tourism, com-

merce, craft industries and trades and services.

www.entreprises.gouv.fr

—

Bpifrance finances companies - at every stage of their develop-

ment  - through loans, collateral and equity. Bpifrance works with

them hand in hand to develop their innovative projects and grow

internationally. Bpifrance also supports their international expan-

sion through a diverse range of products. Consulting, seminars,

networking and acceleration programs for startups, SMEs and

midcaps complete our entrepreneurial offering.

Through Bpifrance and its 48 regional locations, entrepreneurs

benefit from a close, unique and effective representative to help

them face their challenges daily.

www.bpifrance.fr

—

Caisse des Dépôts and its subsidiaries are a state-owned group,

a long-term investor dedicated to serving the public interest and

regional economic development.

Widely recognised for its expertise in managing its areas of com-

petence, the group focuses its efforts on four major areas of transi-

tion strategically vital to France’s long-term development: territo-

rial, ecology and energy, digital, demographic and social.

www.caissedesdepots.fr

—

Five by Five is a boutique open innovation

consultancy with one foot in the world of large

organizations and the other in that of startups.

They help organizations of all stripes understand

how startups work, how to work with them and

how to work like them.

They advocate for open innovation that trans-

forms, scales, and - most importantly - that

makes sense. They are a tight-knit team of ex-

perts in capacity-building, program design, pro-

duct strategy and organizational transformation.

www.fivebyfive.io

A study managed by

and its partners

They were supported by Reporting 21, a Saas holistic reporting solution. This platform is designed

and edited by SIRSA, a CSR (Corporate Social Responsibility) consulting firm. SIRSA carries a

quantified vision of CSR with an integrated offer: consulting & software.

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The Botfuel contract

The data protection agreement that served as a framework

for the PoC between Française des Jeux and Botfuel.

The SNCF startup process

A series of best practices provided to SNCF employees

covering the different stages of startup partnerships.

BNP Paribas Startup Engagement Kit

A toolbox for project owners at BNP Paribas

that provides information and sets out the right

regulatory framework for effective collaboration

with startups.

Total’s "Adopt a Startup" platform

A platform built for company employees to discover

Total-selected startups.

—

Excerpts from useful

back office tools provided by

several participating companies

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AP-

PENDIXCorPorATe

STArTUPS

—

The extracts of the documents mentioned here

are available for viewing and download on

startups-grandsgroupes.lafrenchtech.com

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STARTUPcor- porate FI

NA

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EP

OR

T

TH

E

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EN

CH

TE

CH

BA

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A study managed by