Funds and expansions, new buyers of French technology, Financing

At the start of the year, all eyes are on French Tech’s fundraising results. But another indicator also deserves attention: exits (or “exits” in the jargon), which include IPOs and mergers and acquisitions (M&A).

According to a study by Avolta Partners commissioned by “Les Echos”, 362 exits were made in the French startup ecosystem in 2022, compared to 369 in 2021. If the number of operations is stable, the total value drops dramatically: 4, 8 billion euros, against 10.3 billion a year earlier!



This gap is largely due to several significant initial public offerings (IPOs), including OVH, Believe and Exclusive Networks (cybersecurity). 2022 was, unsurprisingly, a poor year for IPOs, with just seven newcomers, up from 29 in 2021.

“In fact, we are back to pre-2021 levels,” says Arthur Porré, co-founder of Avolta Partners. In 2020, French Tech also recorded 4.8 billion euros in withdrawals, thanks to 225 operations.

partial sales

Mergers and acquisitions operations are on the rise because, due to the lack of funding, more and more startups are looking to sell themselves. A total of 355 M&A transactions were completed last year, compared to 340 in 2021. large groups continue to be the players that most buy French startups (261 operations) but are less active than before (277 operations in 2021).

On the other hand, the acquisitions by investment funds and scale-ups progressed well last year, respectively +40% and +65%. In the fund category, there are more and more big private equity players and growth equity specialists.



Advent acquired, for example, Leetchi and Mangopay, while PSG Equity acquired Budget Insight, Sellsy and Zenchef in the last twelve months. Generally, these actors become the majority shareholder of the capital but can leave stocks to investors and incumbent founders.

“Often, it is a somewhat partial sale that allows liquidity to shareholders who have been present for a long time and guarantees the founders’ personal assets. They also leave a lot of independence to the founders”, explains Arthur Porré.

The rise of external growth

In addition to the acquisition of a majority stake, these funds allocate a funding grant that will allow the start-up to acquire competitors or complementary technologies to its offer to become a leader in Europe. In jargon, this is called “building”. Online payment provider Mangopay, for example, acquired Polish company Nethone, which publishes a fraud detection and prevention solution.

“At the moment, I’m referring a lot of Series B start-ups, who want to raise but don’t have very good numbers, to start-ups that are supported by these funds. It’s a super-intelligent operation to avoid waiting twelve months for the next emergence. In addition, there are cost synergies. But few entrepreneurs know about this option”, emphasizes Arthur Porré.

More mature French startups with cash also made the most purchases in 2022. Avolta Partners recorded 38 transactions, up from 23 the previous year. Insurtech +Simple was one of the most active with the acquisition of six companies in France and Europe thanks to a pocket of funding provided privately by giant KKR.

The most significant operation of the year was that of Swile, which bought Bimpli, BPCE’s restaurant voucher business, for €360 million (including €150 million in convertible bonds). In return, the banking group took 22% of the French unicorn.

Americans’ reluctance

Another lesson from this study by Avolta Partners: the increase in the number of operations carried out by French players, either in number or in value. A trend driven precisely by French scale-ups.



“The Americans, on the other hand, positioned themselves less this year. At Avolta, we have two businesses that jumped at the last moment”, illustrates Arthur Porré. The big American tech groups have been more cautious in recent months as they, too, look to cut costs and focus on core activities.

“In general, everyone is more cautious and more anxious. They want to close the page of 2022 and start over in 2023 with new bases”, says Arthur Porré. But given the uncertain macroeconomic context and the slowdown in fundraising, it is difficult to know whether the “bases” for 2023 will be better than in 2022.



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