realisticIn 2020, not only did the French ecosystem hold up well, but its results also confirmed a certain maturity. Next step: Produce one or more World Champions.
In a bleak economic context, there are announcements that collide and restore optimism. This was the case last week when, on Monday, February 8th, Bercy revealed the names of the startups that make up the second “promotion” of the Next 40 Index and the French Tech 120. These devices were created at the end of 2019. Companies for one year, 120 companies Promising French startup, including 40 companies that meet the most demanding criteria (business volume increase, fund-raising, evaluation). At least 10 of them fall into the unicorn category, and these unlisted startups are valued at more than € 1 billion. And the belief that not long ago, these companies were still rare in the French landscape.
While 2020 was synonymous with a historic recession in the French economy, marked by a halt in many sectors, French technology is showing very good results. According to the EY measure of investment capital in France, 620 companies raised funds last year for a total amount of 5.4 billion euros, or 7% more than in 2019, with an average funding of 8.7 million euros.
The development capital sector has grown significantly in terms of number, with 9 transactions exceeding 100 million euros, but above all in terms of value as it has nearly tripled to reach 1.68 billion euros. Another remarkable fact, large foreign investment funds are now in all these roundtables.EY Partner Frank Sebag identifies. As a result, French technology is ahead of Germany (372 operations versus 5.24 billion euros) but still very far from the UK (1,136 operations and 12.7 billion euros raised).
Building on the strength of these findings, the startup ecosystem is now seeking to take the next step, namely to change the scale by entering the world of ‘expansion processes’.. In good French, we prefer the term “société en hypercroissance.” Scaled Up is a successful startup that is an accelerator organization. Its goal: venturing outside the nursery, and growing and developing in the real world of the global economy, where turnover and valuations reach billions. They are our young French shoots? not today.
Crossing “Death Valley”
Several recent developments confirm their ambitions, the most important of which is undoubtedly the presence of large foreign investors, most of them Americans, who are able to invest tickets from 10 to 100 million euros or more. For a long time not very interested in the European tech scene, funds like Accel Partners, TCV, Sequoia Capital or Index Ventures are now investing in startups from the old continent. « The US market is saturated, the big funds struggle to invest in the best companies. But in France, the conditions for setting up a startup are among the best in the world [formalités assouplies, avantage fiscal sur les actions, crédit impôt recherche…]. The country has a pool of talent and a positive image with French Tech, Station F, etc. “Arthur Burry, co-founder of technology-based investment bank Avolta Partners, explains.
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