A recent report, “State of the French Tech Ecosystem” by Alex Dewez, a partner at 20VC, offers a granular insight into France’s startup scene. Following Atomico’s “State of European Tech” report, Dewez reveals that despite the downturn in European startups funding in 2024, French venture funding remains consistent, thanks to AI startups.
As per Dewez’s findings, startup ventures in France secured €7.1 billion in funding in 2024, a minimal rise from €6.8 billion in 2023. Notably, the soaring growth in AI startups funding, contributing to 27% of the total, has cushioned the overall venture funding landscape in France.
Upon reading between the lines, one could argue that without AI’s significant contribution, the startup funding scenario could have portrayed a slowdown. On a brighter note, the increasing investment in AI signifies an enormous opportunity for future tech startups, affirming the investor community’s focus on this innovative vertical.
France’s tech ecosystem, presently the third biggest in Europe, is greatly impacted by the proliferation of AI startups. The country’s capital – Paris, has emerged as a strong contender to Berlin and London, claiming the title of Europe’s second most popular city for tech startups.
Despite some companies facing bankruptcy trials, the presence of 45 unicorn firms, with recent additions like Pennylane, Pigment, and Poolside emphasizes the potential of the French startup ecosystem.
Looking ahead, Dewez suggests a handful of late-stage ventures, including Back Market, Dataiku, Doctolib, Qonto, and Content Square, could potentially go public due to their impressive annual revenues and prospective profitability.
However, France’s underwhelming history of IPOs and U.S. legibility due to a lack of American customer base might pose obstacles to going public.
While the number of startup exits slipped by 14% YoY, Dewez speculates that the total exit amount remained consistent at around €12 billion over the past three years. The future, however, remains contingent on various factors, including the dipping investment rate from U.K. funds.
Original source: Read the full article on TechCrunch
