From PitchBook, September 10:
Government attempts to bolster the startup ecosystem, coupled with unexpected tailwinds created by the pandemic, have created a boom in venture capital activity in France—but it still lags behind other major economies in the region.
In the first half of the year, venture capital funding for French startups totaled €4.6 billion (about $5.4 billion) across 381 deals, representing over 70% of the total invested in 2020, according to PitchBook data. But by comparison, the UK and Germany saw VC investment soar to new heights in these first six months, beating the previous year’s records—€14.2 billion and €7.7 billion, respectively.
"The pandemic created a lot of growth in French startups last year. We raised more than expected and what we’re seeing now is more stability," said Xavier Lazarus, co-founder of Elaia Partners. "We’re still raising a lot of money, and we’re not far off the rest of our neighbors."
Indeed, during the COVID-19 crisis, France saw the most success of the three markets, up over 25% from 2019 to 2020, compared with 1.7% in the UK and 10.9% in Germany. The sheer amount raised by French startups last year may be having an effect on this year’s activity, according to Lazarus, as companies are already well-capitalized.
And yet, this is the first time in a few years that France’s VC market has grown at a slower pace than Europe's two other big economies, the UK and Germany, despite huge efforts from its government to make the country into a nation of unicorns.
The French government has sought to promote more late-stage capital from domestic investors. In 2019, President Emmanuel Macron announced a €5 billion fund to support tech investments with €2 billion earmarked to help startups scale up and introduced a new tech visa to help high-growth startups recruit foreign workers.
Macron also set a goal of having at least 25 billion-dollar-plus companies in France by 2025—it currently has 13. This year has welcomed new entrants to the stable including insurtech Alan, which was valued at €1.4 billion in April with a Coatue-led Series D, and blockchain security startup Ledger. The latter raised $380 million in a June round led by 10T Holdings, valuing it at over $1.5 billion....
....MUCH MORE
