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Over the past 10 years, nearly 30 unicorns have emerged from France — but now, just like everywhere else, funding is drying up
Last workweek , La French Techcelebrated its 10 - class anniversary — this government - back initiative has been in charge of promoting and further the startup community in France . When you compare the metric of the French technical school ecosystem between now and then , it ’s dead on target that things have changed drastically with some telling success level .
And yet , the jubilation at the Ministry of Economics and Finance may have been a bit too ego - congratulatory for the entrepreneur in the room . Just like many tech ecosystem , the Gallic tech ecosystem is currently going through a rough temporary hookup and confront layoff , down rounds , flame sales and even bankruptcies . So rent ’s employ this opportunity to check in with the Gallic tech ecosystem .
From a blank page to 28 unicorns (or so…)
Sometimes , numbers tell a tarradiddle . And it ’s particularly dead on target with the Gallic tech ecosystem . As Iwrotenearly 10 years ago , there was a noticeable mindset shift around 2013 and 2014 .
For the first clip , startup entrepreneurs establish in France did n’t just desire to make something straight . They want to innovate at scale and build tech giants that would vie with American or Chinese companies .
For the first time as well , policymakers realized that they needed a logical approach with the tech ecosystem . Hence the creation of La French Tech and the formation ofBpifrance , a French public investment money box that is the solution of the merger of several public investment funds , such as Oseo , CDC Entreprises and France ’s sovereign fund . It was all about contribute stability .
in brief after that , entrepreneurs started raising bountiful funding rounds and VC business firm managed to raise bigger funds . Foreign investor also get down spending more time in Paris to find some investment opportunities ( starting with London - establish funds , such as Index Ventures , Atomico , Balderton Capital , Accel ’s London squad , etc . ) .
Overall , it ’s been a decade of maturation for the entire European ecosystem with the French technical school ecosystem grow at an even more speedy tempo .
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“ We ’ve mark that we part indue more in European inauguration without even thinking about it — not just Gallic startup , but all over Europe , ” Battery Ventures General PartnerChelsea Stoner told mein 2018 during a tour of the French technical school ecosystem .
The first Gallic unicorns started popping up ( startup that have attain a individual rating of $ 1 billion or more ) , such asBlaBlaCar , a marketplace for long - distance railcar drive between metropolis , medicine streaming serviceDeezerand healthcare SaaS startupDoctolib .
On the acquisition front , some inauguration managed to secure $ 100 million - plus exit , such as Zenly , Captain Train , TheFork , Teads , Leetchi , Shine and Compte Nickel .
More of late , things get to gravely heat up — just like in the U.S. There arearound 28 unicornsin France — startups that have reached a private evaluation of $ 1 billion or more . Alan , Back Market , Ledger , Lydia , Qonto … it ’s a tenacious list now .
But the current tech downturn is a spherical phenomenon . Interest rate are rising all around the world . And VC investments , which are appealing when interest rate are low because of their potential for high peril and eminent rewards , are drying up .
consort to arecent cogitation from EY , funding rounds are down almost 50 % in the first half of 2023 compared to the first half of 2022 . Nevertheless , French startups have raised $ 4.5 billion ( € 4.26 billion ) during the first six month of this year . In 2018 , they raised $ 3.8 billionfor the full year(€3.62 billion )
And it leads to tangible effects in the tech ecosystem . Last calendar week , Maddynesscompileda list of late rounds of layoff in the Gallic technical school ecosystem . Hundreds of employee working for Back Market , PayFit , OpenClassrooms , Ÿnsect , Sunday , Ledger and ManoMano are facing job cold shoulder .
At this decimal point , how many of France ’s 28 unicorn are still unicorns today ? In other words , would they be able to get the same evaluation if they tried to raise a new funding round today ?
Happy birthday, La French Tech
Last week , a few hour after Les Échosreportedthat ManoMano — the east - Department of Commerce market place focused on DIY and house improvement — was about to cut 25 % of its workforce , La French Tech invited hundreds of entrepreneurs , investor and newsman to the Ministry of Economics and Finance .
Most of the evening was spent talking about everyone who contributed in one way or another to the creation and continued succeeder of La French Tech — at some point , there was even a natal day cake onstage .
And it ’s true that La French Tech has been useful when it comes to cite the top - performing French startup ( Next 40 and French Tech 120 rankings ) , kick upstairs equal chance through various political program and solving issues with public organisation .
But some people rightfully spotlight some of the challenges that lie forwards for the French tech ecosystem at turgid .
“ It ’s true , we ’re at a turning distributor point . The context is a trivial more hard , I understand that , ” La Gallic Tech director Clara Chappaz said in the basic speech . “ But I conceive that we should strive to be even more challenging in the current surround . ”
Xavier Niel , the Gallic telecommunication billionaire who createdStation Fand who empower in C of startups throughKima Ventures , pointed out that there ’s still a lot of body of work to do when it make out to sexuality , social origin and racial and ethnic diversity .
Tatiana Jama , the founder ofSista , a not-for-profit that promotes grammatical gender equality in technical school , doubled down on the variety problem . “ There are a few char in the room , but unfortunately we are all extremely similar , ” she said .
The Gallic technical school ecosystem is also too … French right on now . While France’sspecial visa for technical school talentgreatly bring to appeal outside talent , there are not a lot of alien entrepreneurs who relocate to France to start a company .
“ We should n’t sharpen too much on ourselves . We should expand internationally and countenance foreign VCs invest in our companies , ” Fleet co - beginner and CEO Alexandre Berriche told me at the event before the speeches . He is alsoa scout investor for Sequoia Capital .
Poolside , a buzzy artificial intelligence startup , recentlymoved its headquarters to France . Let ’s see if it ’s the kickoff of a new trend as there is a magnanimous pool of AI talent in France thanks to the lineament of the engineering school in the country . Many American companies have also opened AI labs in Paris .
“ Another wish well that I have is that I want to see people from the whole humans come to France to create a inauguration , ” Bpifrance CEO Nicolas Dufourcq aver .
What happens when the party is over?
Earlier this class , startup third house France Digitale and Actual Group found out that Gallic startups have created one million jobs over the past 10 yr . In many means , this fourth dimension full stop was an investment form , which lead to a job introduction stripe . But when I discuss with French entrepreneurs at the helm of late - degree startups today , they all mouth about profitability .
“ We raised € 200 million after all . And we did n’t do it so that we could go out and wassail mojitos . It was about continuing to pull ahead market percentage , ” Swile founding father and CEO Loïc Soubeyrand told me in July . But his company focused on employee welfare now carry toturn a profit on an EBITDA basis this fourth part .
In early 2022 , the co - founder and CEO of Lydia , Cyril Chiche , also realized that the tech ecosystem was choke through a paradigm sack .
“ I obtain an all - hands merging in front of everyone to explicate something significant about our scheme . And I differentiate them that the world has convert , and from now on we ’re go to have to change everything , ” Chiche say Sébastien Couasnon on his podcastTech 45 ’ . At La French Tech ’s upshot , Chiche told me that he expects to progress to profitability by 2024 .
“ I think we ’re at a act of a turn head . We ’ve built a lot over the last 10 years , but above all we ’ve build some very solid things , ” she add together later in the conversation .
There is one thing for sure . As VC money is deploy at a glacial pace , we are going to feel out in the come months whether French startups can survive the current downturn .
Employee benefits startup Swile expects to become profitable next quarter
European startups still have a tenacious way to go to achieve gender parity bit
How France wants to become a tech titan
