Tracxn, a leading global SaaS-based market intelligence platform, has released its Geo Annual Report: France Tech 2023. The report, based on Tracxn’s extensive database, provides insights into the France Tech space.
The French Tech startup ecosystem ranks 6th globally, after the US, UK, China, India, and Germany in terms of funding in 2023. It is also the third highest-funded region in Europe after the UK and Germany. Similar to the funding trends seen across other startup ecosystems across the globe, France also witnessed its highest VC funding in 2021 after which the funding started to experience a downward trend.
Though funding in this sector has declined compared with the funds raised in 2021 and 2022, 2023 has already become the third highest-funded year for this region in the past decade. This decline in funding in 2023 can be attributed to the rising interest rates, and geopolitical tensions among others, slowing down funding activity across industries and making investors cautious of making major investments.
The French Tech startup ecosystem received $6.1 billion in funding in 2023 YTD (till December 6th, 2023), a 43% decrease from the $10.7 billion raised in the same period in 2022 and a 44% decrease from the $10.9 billion raised in the same period in 2021.
Late-stage investments fell 48% to $2.9 billion in 2023 YTD, from $5.6 billion raised in the same period in 2022. Early-stage investments, too, fell 44% to $2.5 billion in 2023 YTD, compared with $4.5 billion in 2022.
However, there was an upward move in seed-stage funding, which rose 19% to $654 million in 2023 YTD, from $551 million raised in the same period in 2022. The French Tech sector also witnessed the highest seed-stage funding in the French Tech startup ecosystem to date.
The number of $100M+ funding rounds slid from 23 in 2022 to 12 in 2023. Verkor, a manufacturer of green batteries, raised $913 million in a series C round led by Macquarie Asset Management, Crédit Agricole Assurances and the Fonds Stratégique de Participations (FSP). This is also the second-highest funding round for an Energy Tech company in Europe, after Sweden's Northvolt.
Verkor was the only new unicorn that emerged in this space in 2023 YTD. It was an uneventful year on the IPO front, with only two companies going public in 2023 YTD, a substantial decline when compared with the 10 IPOs in 2022.
Environment Tech, Enterprise Applications, and Transportation & Logistics Tech were the top three sectors that received the highest funding in this year till date. The Environment Tech space has raised a total funding of $2.07 billion in 2023 YTD, a growth of 54% compared with the $1.34 billion raised in the same period in 2022.
The Enterprise Applications segment secured a total funding of $1.98 billion in 2023 YTD, 64% lower than the $5.51 billion raised in the same period in 2022. Transportation and Logistics Tech companies attracted investments worth $1.68 billion in 2023 YTD, a growth of 20% compared to the $1.4 billion raised in the same period in 2022.
Among French cities, Paris dominated the startup funding in 2023, followed by Grenoble and Boulogne Billancourt at a distant second and third. Tech startups based in Paris raised $3.2 billion, while those based in Grenoble and Boulogne Billancourt raised $969 million and $224 million respectively.
Le Village by CA, Kima Ventures and Bpifrance are the overall most active investors in the French Tech Startup space. Kima Ventures, Founders Future, and Motier were the lead investors in seed-stage investments in 2023, while Omnes Capital, BNP Paribas Developpement, and Supernova Invest were the most active VCs in early-stage investments in 2023. La Maison Partners, DST Global, and Blisce were the leading investors in terms of late-stage venture funding in 2023.
