Euro tech hubs find ways to flourish beyond capital cities alone

The author is a writer for Sifted, an FT-backed site for European start-ups

In the university city of Lille, in northern France, a Google campus-like building stands in the middle of the Bois-Blanc district — an area that, 15 years ago, was better-known for crime, drug dealing and prostitution.

It is now home to the main campus of the start-up incubator and accelerator Euratechnologies, which has settled behind the red-brick walls of what used to be one of the country’s most productive cotton factories.

Nearly 2,500 jobs were lost when the factory closed at the end of the 1980s — and the whole surrounding area was left derelict. A few decades later, it has experienced a renaissance. Large companies such as Capgemini and IBM have opened offices and there are many bustling cafés and restaurants.

Euratechnologies is France’s number-one start-up hub — a significant achievement in a country where, at least in the tech industry, so many roads lead to Paris.

According to data compiled by the Financial Times together with Statista and Sifted, the campus boasts some of France’s best performance metrics, based on criteria such as record, infrastructure, mentoring and networking opportunities.

But Euratechnologies is not an exception: many start-up hubs in Europe today are not located near venture capital groups’ headquarters or the capital city. They have shown that, with the help of government support and partnerships with regional universities, it is possible to become a household name.

Local support

Launched in 2009, Euratechnologies was an initiative primarily led by the local authorities — which subsidise its incubator and accelerator programmes — in partnership with private sector companies in the area, such as regional banks and insurers.

“Our success comes from a genuine desire from the local government to take an area that was a no-man’s-land and transform it into a tech ecosystem that has a real impact on the region,” explains Koussée Vaneecke, Euratechnologies’ chair. 

One of the key selection criteria for Euratechnologies when recruiting start-ups is that they want to be based in Lille or its surrounding area. And, once the business has graduated from the programme, everything is done to encourage it to stay — including offering office space on campus at a much more attractive rent than in Paris.

As a result, with two batches of 100 start-ups being taken on every year, Euratechnologies has created a vibrant network of companies and founders.

“I came to Euratechnologies because it’s got the reputation of having a community of entrepreneurs,” says Michael Bruniaux, chief executive of agritech Sencrop, who graduated from Euratechnologies’ incubation programme in 2016 and is still on site.

“You get a lot of help from others from the very start, and it makes you want to stay in the ecosystem. I’m currently mentoring four or five start-ups myself.”

‘Second-tier’ cities

Creating a hub beyond a capital city comes with challenges, however. In France, start-ups in the Paris region accounted for two-thirds of the total capital raised in 2023, according to EY — which can mean founders are often reluctant to start a company in other regions.

“We’ve launched services like a case-by-case support programme for fundraising, but we know that we have to work on this because investors don’t come here spontaneously,” says Vaneecke. “Funding is the main issue outside of Paris.”

But being off the beaten track can also be an opportunity. In Germany, where most start-up activity happens in Berlin, Munich and Hamburg, Leipzig-based SpinLab has been ranked as the second-best start-up accelerator programme in the country.

Founder Eric Weber says that targeting what he calls “second-tier cities” is a proactive strategy, but requires specialisation.

“You’ll find start-ups in every industry in Berlin or Munich,” says Weber. “I don’t think Leipzig can compete with that. What you can do is be competitive in a specialised topic and be the best in that — but that topic must fit the economic structure of the region.”

Be competitive in a specialised topic and be the best in that

Leipzig is home to a number of large regional businesses in energy and healthcare — so SpinLab has partnered with companies such as natural gas group VNG, energy supplier Sachsen Energie, and health insurer AOK.

Regional partners pay SpinLab a yearly fee to be connected to the accelerator’s start-ups in their sectors — a model that has succeeded in attracting entrepreneurs in search of customers.

Noah Lorenz, founder of digital health start-up mementor, cites this as one of the main reasons that he joined SpinLab in 2019.

“They have a focus on healthtech and that was important because some of their corporates were from the field,” says Lorenz. “For example, we regularly met with regional health insurance company AOK.”

From student to start-up

Lorenz, who stayed in Leipzig after graduating from SpinLab, says another attractive feature of the city is the availability of talent, thanks to nearby universities and business schools. 

Piggybacking off of a university campus to build a tech hub is an approach taken by many other regional start-up incubators and accelerators.

For example, across three campuses in France — Reims, Rouen and Paris — business school Neoma has launched an incubator programme designed for its students, which enables it to pool future entrepreneurs straight from university.

The Reims campus in eastern France is ranked as the second-best start-up hub in the country and is 10th in Europe for track record.

In the UK, where start-ups in London, Oxford and Cambridge pick up three times as much funding as across the rest of the country, incubator network SETsquared has placed its bets on partnerships with universities in Bath, Bristol, Cardiff, Exeter, Southampton and Surrey.

“We set up SETsquared because there was very good activity going on at these universities,” says David Bream, director of Southampton’s SETsquared incubator. “But because they were regional universities, there were less people fighting over that activity to get involved.”

SETsquared’s Southampton campus ranks as the leading start-up hub in the UK — the only one in the country’s top five outside of London — and is third across Europe.

With about a quarter of its start-ups originating from within the partner universities, the incubator has a ready-made base of founders-to-be. Many entrepreneurs also come from outside the partnership, though — attracted by the first-class research facilities and high-quality talent they can have access to.

But what has been key to the success of the initiative, says Bream, is collaboration. “We’ve got a lot more profile as a group than individually.

“Working together, across several campuses, gave us an opportunity to punch at the same weight as Oxford or Cambridge.”

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