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VC investment in French startups hit $11.3 billion in 2021

Venture capital

Venture capital investment in French startups doubled in the past year alone, from $5.8 billion to $11.3 billion in 2021

Recent data from Dealroom, supported by France’s startup movement La French Tech, has revealed that the combined enterprise value of French startups founded since 2000 was €179 billion ($202.58 billion) in 2021, up 17.7 times since 2010.

With 31 homegrown unicorns — firms with a valuation of more than $1 billion — France has also now surpassed Sweden and the Netherlands (24 each) for the number of unicorns created, coming only second to Germany (53).

According to the report, venture capital (VC) investment in French startups doubled in the past year alone, from €5.1 billion ($5.8 billion) to over €10 billion ($11.3 billion) in 2021.

The top three VC funding rounds this year were the $680 million Series B raised by soccer non-fungible token (NTF) trading platform Sorare, the $555 million Series E by Software-as-a-service (SaaS) firm Mirakl and a $400 million Series D by French neobank Qonto.

Overall, 2021 was a record year for megarounds — fundraising of at least $200 million — in France, with 11 out of the 15 rounds since 2016 taking place this year alone.

Commenting on the achievement, Clara Chappaz, director of La French Tech, said the country is ‘finally attracting the means to match its ambitions,’ with foreign investors at the source of the most of those funds.

According to the data, 60% of funds raised by French startups year-to-date (YTD) have come from abroad, with American (31.2%), European (19%) and Asian (3.3%) investors topping the list of non-domestic investors this year.

However, Chappazz said there is a significant gap between Paris and other parts of the country when it comes to funding, with other regions attracting only 50% of investments despite housing over 70% of new startups.

That said, success stories like Montpellierʼs Swile reaching unicorn status this year and Rennesʼ Leocare raising €100 million ($113.17 million) show that other regions are starting to attract investors’ attention.

Another major success story to come out of France this year is mobile financial services platform Lydia reaching unicorn status earlier this month after raising $100 million in a Series C round.

Founded in 2013, Lydia began as a peer-to-peer (P2P) payments app like Venmo and has since grown to become the second-most downloaded FinTech app in France, giving 5.5 million customers access to other offerings such as loans, savings accounts and, more recently, cryptocurrency trading.

The superapp is really the future of banking services as we know them, Lydia co-founder and CEO Cyril Chiche recently told Sifted. The bank app has gained some improvement, but they haven’t really changed over the last few decades. Apps should really hide all the complexity of banking. It should be an interface as close to the actual intention.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.