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After a record Q1-22, €5bn in total funding for French Tech, and in the midst of what could be one of the worst economical crisis of the decade, most people have been bracing for impact in Q2-22. However, the data was rather (positively) surprising as total funding for Q2-22 reached €3.6bn, which represents the 3rd best quarter in French Tech history.
 
In total, H1-22 is the highest semester ever with €8.6bn in total funding. So, for now, in France, market positive drivers – mainly the huge amount of dry-powder available – are resisting against the negative ones – bear market in Tech, war in Ukraine, inflation.
 
The latest French presidential elections will also play a role on the ecosystem, as President Macron only got a simple majority at the French Parliament and might be less able to enact new laws favourable to French Tech as he did in the last 5 years.
 
In Europe, the trend is rather stable with €30bn in total funding per quarter, stable – slightly down – compared to 2021. Europe seems to be more resilient so far than the US, which saw Q2-22 down to €60b in total funding, compared to €100bn in Q4-21.It is very difficult to predict the future in such an uncertain environment, but it is very likely that the bear market will have a greater impact on venture capital funding in Europe in the coming months, as it has already done in the US in H1-22.
 
On the M&A front, the impact of the current economic crisis on the French Tech is much more noticeable. Q2-22 total exit value was €1.2bn. Added to a super low Q1- 22 at €800m, H1-22 is one of the worst semester ever in total exit value for French Tech.
 
Nevertheless, some indicators are reassuring for the future of the ecosystem:
  • Activity (no. of deals) is very high with nearly 100 deals per quarter, twice as many as pre-covid
  • Scale-ups have become much more active acquirers with 30 deals in H1-22, up 3 times more than in H2-21 and before.
 
Arthur Porré, Founding Partner, Jul. 6th, 2022