End of the roller coaster. After a peak in the first half of 2022, fundraising by French start-ups experienced a sudden slowdown. The first six months of 2024 finally mark the end of the bleeding. With €4.26 billion raised in the first half of the year, French start-ups are reproducing the same results as in 2023, from January to June, according to a report published on Wednesday, September 11, by the company EY and the organization France Digitale. But the records of two years ago are now far away: €8.39 billion were raised in the first half of 2022 and €13.49 billion in twelve months.
France also confirms its position as the second most attractive place in Europe in terms of venture capital. The United Kingdom remains firmly at the top of this ranking in the first half of the year, with €8.5 billion raised during the first six months of the year, compared to €7 billion the previous year. But Germany, which is in third place, is falling further and further behind, raising only €3.65 billion, compared to €4.15 billion the previous year.
If French tech is able to pull through, the results seem mixed. The French ecosystem can certainly be satisfied with some large deals: Mistral AI (€600m), Electra (€300m), HysetCo (€200m), H Company (€200m), Pigment (€135m). Total fundraising of over €100m reached €1.5bn in six months, an increase of 54%. In contrast, fundraising of between €10m and €100m has fallen by more than 20% in value and volume. Fundraising of less than €10m continues to grow in value (+3%) as well as in number (+15%).
Ecological transition, software, health and AI
However, the average amount of financing rounds has decreased during this semester, from €2.8 million to €2.5 million, and the outlook is not particularly favourable. While fundraising remains the preferred option for French start-ups to finance themselves (47%) over the next year – compared to only 0.2% who hope to be able to make an IPO – financing capacities tend to decrease and investors are becoming increasingly cautious. Almost half of them reserve between 20% and 40% of their capital to refinance start-ups already in their portfolio.
Another weak point highlighted by the report is the too small number of players capable of financing large-scale operations. Half of the funds present in the French scene manage less than 250 million euros, the report notes.
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