After a sharp decline, fundraising by French startups is stable

2024-09-11 10:25:53

The end of the roller coaster. After the peak in the first half of 2022, fundraising by French startups has experienced a sudden decline. The first six months of 2024 finally marked the end of the bloodshed. With 4.26 billion euros collected in the first half of the year, French startups created the same activity as in 2023, from January to June, according to a report published, Wednesday, September 11, by the company EY and the organization France Digitale. But the records of two years ago are now far: 8.39 billion euros have risen in the first half of 2022 and 13.49 billion over twelve months.

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France reaffirms its position as the second most attractive place in Europe in terms of business capital. Indeed, the United Kingdom remained firmly at the top of this ranking in the first half, with 8.5 billion euros raised in the first six months of the year, compared to 7 billion a year ago. But Germany, in third place, is falling further and further behind, collecting only 3.65 billion euros, compared to 4.15 billion a year ago.

If “French Technology” manages to get it, the results will appear combined. Indeed the French ecosystem can be happy with some great projects: Mistral AI (600 million euros), Electra (300 million), HysetCo (200 million), Company H (200 million), Pigment (135 million) . The fundraising total of over 100 million euros reached 1.5 billion over six months, an increase of 54%. On the other hand, the promotion of 10 million to 100 million has dropped by more than 20% in value and volume. Funding below 10 million euros continues to grow in value (+ 3%), as well as in number (+ 15%).

Ecosystem change, software, healthcare and AI

All things considered, the total amount of funding rounds fell in half of this year, from 2.8 million to 2.5 million, and the outlook is not particularly good. While raising funds remains the preferred option for French startups to finance themselves (47%) next year – compared to only 0.2% who expect to be able to do an IPO -, financial capabilities tend to decrease, and investors are becoming more cautious. Almost half of them reserve between 20% and 40% of their capital for revitalizing the startups that are already in their portfolio.

Another weakness highlighted by the report is the small number of players capable of financing large-scale operations. The report notes that half of the funds on the French site have less than 250 million euros under management.