In 2020, French Tech raised € 5.4 billion, ranking second in Europe. High despite the pandemic, French startups have completed funding rounds of 8.7 million euros on average. Amounts over € 50 million represent almost half of the total value of transactions.
It seems that French Tech is immune to the pandemic that has hit the world for a year, or even is doped by it. In fact, not only did the ecosystem not suffer too much in 2020, it attracted more funds than in previous years. This is what the EY firm indicates in its annual barometer on the health of the French startup ecosystems. Remember that last year, French startups raised a total of 5.4 billion euros in 620 fundraisers, up 7%. Like many high-tech start-ups around the world, they have taken advantage of the infatuation of Internet users confined to leisure and video games, the urgent need for companies to acquire collaborative tools for teleworking or to ensure the relationship with their clients to distance.
8.7 million euros on average per financing round
Thus, the three digital companies that achieved the 5 most important increases in 2020 are the Voodoo mobile games study (estimated at 400 million euros, not validated by the company), the marketplace publisher Mirakl (256 million euros) and the ContentSquare experience analysis tool (€ 173 M). All three, valued at more than a billion dollars, are eligible for the enviable title of unicorn. The other two young shoots in the top 5 are the breeder and transformer of insects into animal feed, Ynsect (€ 190 million) and the sustainable label Ecovadis (€ 182 million).
France ranks second in Europe, just ahead of Germany with 5.2 billion euros raised, but still far behind the UK, leading with 12.7 billion euros. The increase in the number of rounds of French Tech is even more impressive as it goes hand in hand with a 16% drop in the number of transactions made. Therefore, this reflects a strong increase in individual rounds. Therefore, the average fundraising amount in 2020 was set at € 8.7 million compared to € 6.9 million in 2019. According to EY, fundraising above € 50 million even represents 2.4 billion euros, that is almost 45% of the total for 2020 with an increase of almost 90% compared to 2019.
The hope of seeing the extensions grow
Looking ahead, the EY firm sees this trend as a reason to expect more than 100 million euros to be raised. They have already quadrupled in value between 2019 and 2020. If this trend is confirmed, it could reduce the risk that the most promising start-ups will disappear from the bosom of large, often international companies. Rather, these extensions could be developed independently with the funds raised.
Half of the amounts allocated to start-ups in 2020 went to software publishers and Internet services, although the amount has dropped slightly. And three-quarters refer to companies in the Ile-de-France region. The second region, Auvergne-Rhône-Alpes, represents only 8% of the total amount. Finally, EY isolates fintechs, which are registering an insolent growth of 57% with 622 million euros compared to 397 million euros in 2019.