13.5 billion euros raised by French startups in 2022

After a year of 2021 marked by the return of investments following the health crisis induced by Covid-19, the year 2022 was placed under the sign of caution. With the war in Ukraine, rising interest rates and inflation, French and European startups took the time to analyze their situation before closing the funding round.

The most cautious European start-ups in 2022

After a year of record investment across Europe, with $105 billion raised by European tech companies, 2022 will have been a little quieter. In its annual report European state of technology 2022 ”, forwarded by The computer world, Atomico claims that around 85 billion euros have been invested in European start-ups. An amount higher than the results of 2018, 2019 and 2020 between 27 and 41 billion dollars.

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Graph representing the capital invested by investment funds between 2018 and 2022.

In 2021, investment funds did not hesitate to put their money in technology companies to rescue after the Covid-19 crisis. Graph: Capital Invested ($B), 2018 to 2022E, dealroom.co.

To find investors, companies hold seed rounds, which allow them to raise funds. In general, they make it possible to bring together several investors or investment funds that inject money against a share of the start-up. A fundraiser is therefore usually made up of several investments.

The number of series A rounds, that is, those whose objective is to raise funds to finance the company’s development, fell 50% in one year. Series C rounds, which aim to attract investors to expand the company’s activity, namely abroad and allow the acquisition of other structures, fell by around 60% compared to 2021.

Between the first quarter of 2022 and the last quarter of 2022, the collection between 100 and 250 million dollars was divided by four. For example, 6 French start-ups, including Spendesk, which offers an all-in-one expense management platform, became unicorns between December 2021 and February 2022. To become one, they managed to raise more than 100 millions of euros.

Only two new start-ups entered this tight circle between March and December 2022. Firstly, EcoVadis, a start-up specializing in evaluating the performance of companies (in terms of social and environmental responsibility (CSR) and Younited Credit, a start-up offering consumer credit to individuals This pattern in terms of substantial fundraising is much the same for other European countries.

Compared to other European countries, France is in a better situation, as with 735 operations and 13.49 billion euros raised, it notably surpasses Germany and 664 operations for 10.04 billion euros raised. However, the two European powers are largely surpassed by the United Kingdom, which has almost twice the number of operations for more than 27 billion euros invested.

Graph showing investments in French, German and British startups in 2021 and 2022.

If France lagged behind Germany in 2021, it surpasses it in 2022. However, the two countries remain far from the UK. Graph: EY barometer.

In 2021, Thierry Breton, European Commissioner for the Internal Market, announced the EU’s ambition to double the number of unicorns by 2030. This would increase from around 140 in early 2023 to 240 by the end of the decade. For his part, the President of the French Republic, Emmanuel Macron, had set in June 2022 the objective of reaching 100 tricolor unicorns by 2030.

The French government continues to support start-ups

With 13.5 billion euros raised, French startups raised more money than in 2021. However, fewer companies completed a funding round in 2022: 735 operations against 784 in the previous year. In all, 8.4 billion euros were invested in the first half, against 5.1 billion in the second half. However, the global geopolitical context has changed, which explains this difference between the two semesters. All investment sectors in the second half of 2022 fell, the first since 2017.

The French government is aware of this and wants to give more support to startups. Jean-Noël Barrot, Minister Delegate responsible for the digital transition, presented new measures to facilitate the IPO of unicorns. So the government invested almost €500 million more to promote the creation of deeptech start-ups.

In terms of financing rounds, 29 operations registered a result of more than 100 million euros. Among them, the Sarbacane group, which became the Positivo group and raised 110 million euros. This year’s record is attributed to Qonto, a financial service for professionals, which carried out a funding round of 486 million euros and thus managed to buy its German competitor, Penta.

At regional level, Île-de-France continues to lead and monopolizes 74% of fundraising in 2022. Hauts-de-France and Auvergne-Rhône-Alpes follow with 7.3% and 6.2% respectively. As for the sectors favored by investors, Internet services and software represent around €2.95 billion in funding each. These two sectors are followed by fintechs with 2.34 billion euros. Note a drop in the digital health sector, which, however, raised 2.3 billion euros in 2021 and which is not in the top 3 this year.

For 2023, experts expect a drop in investments. Businesses will be cautious and sobriety will be in order. Even though the year 2022 has been more than correct for fundraising, the disparities between the first and second semesters show that the year 2023 will be a little more complicated…

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