The economic slowdown continues to weigh on French Tech. In the first half of 2024, fundraising by French start-ups amounted to around €4.3 billion, an amount perfectly equal to that collected in the first half of 2023 despite a number of operations up 6%.
The euphoria of the post-Covid recovery years, with more than eight billion euros invested in the ecosystem in the first half of 2022 and more than five billion in the first six months of 2021, is now a distant memory, while high interest rates weigh on fund activity. “These figures reflect the state of convalescence of French Tech after the big cold snap of the last 18 months,” writes, somewhat fatalistically, Franck Sebag, the partner of EY who comments on the study of his firm published Tuesday July 16.
Despite the slowdown in recent months, French start-ups continue to raise more money than before the Covid crisis. Compared to the first half of 2023, France is even widening the gap at the top of the European Union ranking, as Germany recorded a 12% drop in the amounts raised, to €3.7 billion. On the other hand, the United Kingdom is regaining the lead over France with a 21% increase in its fundraising in value, to €8.5 billion.
Green industry startups are being overtaken
In this gloomy context, however, a major trend should be noted compared to the first six months of 2023. At the time, green industry start-ups attracted the most capital for the first time among all sectors. This year, the software sector regains its first place with nearly €1.5 billion invested in its companies, up 51% compared to last year despite a significant drop in the number of funding rounds. “This performance is mainly explained by the acceleration of projects around generative AI,” underlines Franck Sebag.
In the top 5 of the largest fundraisings in France in this first half of the year, we find the two generative AI start-ups Mistral AI and H Company respectively in first and fourth place with 468 million euros and 184 million euros collected. The young shoot Pigment, which develops a platform allowing decision-makers to establish their budgets, also inflates the figures of the “software” category with the fifth largest French raising of 134 million euros. The company also uses generative AI features.
Uncertainty about the second half of the year
In second and third place, green industry start-ups are still in the spotlight with the raising of €304 million by electric vehicle charging specialist Electra and €200 million by hydrogen station manager Hysetco. In total, the value of operations carried out by greentechs is around €1.1 billion, down 5% compared to the previous year. Health start-ups in the broad sense complete the sector podium with €474 million raised.
In the second half of 2023, an additional four billion euros had been raised by French start-ups. The ecosystem will have a lot to do to reach this level in a context of political uncertainty and a still difficult macroeconomic landscape. “In the current climate of uncertainty, it is imperative to stay the course and above all to keep in mind that a sudden change in the rules of the game could put a stop to this dynamic,” warns Franck Sebag.
Source: www.usinenouvelle.com
