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How come France always stands out as a country at odds with the rest of the world?

While VC funding has plummeted in 2022 YoY in almost all countries (US: -29%, China: -56%, UK: -19%, Germany: -27%, etc.), France boasts a staggering, almost insolent growth of +30%.

Now, can we jump to the conclusion that the French Tech ecosystem is more resilient than others? Or is it simply a lag of the bear market, which is just about to hit France?

Looking at quarterly metrics, VC funding in France fell from €5bn in Q1-22 to €2.5bn in Q3-22. The number of deals also failing by almost 50% to 150.

Digging deeper, the Top 10 deals were fairly normal, amounting to €1.7bn. Yet oddly enough, the early stages rounds dropped significantly. The usual leading industries such as software and fintech remained stalled, while sustainability-related startups flourished with startups such as Bump, Zeplug and Innovafeed raising considerable sums.

In the end, we still expect 2022 to be an all-time high for French Tech VC funding, reaching €15bn.

Meanwhile, French Tech exits have returned to their pre-2021 norm of around €5-6bn in total exit value. Deezer’s troubled IPO was instrumental for Q3, reaching €1.8bn, the best quarter of the year so far.

We do not expect any real improvement in the total exit value, which is driven by (multi-)billion euro IPOs, as long as public markets remain in bearish mode.

Yet, small-to-mid-cap Tech M&A remained very active in Q3 with 100 deals, thanks in part to the huge wave of consolidation by scale-ups – often backed by PE funds – which are feeding this consolidation strategy with their dry-powder.

Arthur Porré, Founding Partner, Oct. 3rd, 2022