🇫🇷 The State of The French Tech Ecosystem
Overlooked #96
Hi, it’s Alexandre from Eurazeo (ex. Idinvest). I’m investing in seed & series A consumer and consumer enablers startups all over Europe. Overlooked is a weekly newsletter about venture capital and underrated consumer trends. Today, I’m sharing my annual presentation on the state of the French tech ecosystem.
In the past 6 weeks, I worked on updating my report on the French Tech Ecosystem for 2021. You can look at the 2020’s edition here.
I tried to bring the report to the next level going deeper in many sections: (i) describing the competitive intensity between funds to invest into French startups, (ii) showing how fast the ecosystem’s flywheel is spinning, (iii) sharing trends that shaped 2021 and trends to follow in 2022, (iv) “product innovations” in venture (e.g. solo GPs, crypto funds, evergreen funds, media-based VCs). I also included many interviews with key people in the ecosystem to add a qualitative layer to my analyses which are mostly quantitative driven.
I hope that you’ll like the report and I’d love to hear your feedback! You can shoot me an email at adewez@eurazeo.com.
You can access and read the report on the below link. To tease you, I’ll just highlight some key learnings in this newsletter.
Learning n°1 - 2021 was a Tipping Point for the French Tech Ecoystem
In 2021, the French tech ecosystem reached a tipping point with several key achievements: (i) a massive wave of new unicorns (16 vs. 29 in total), (ii) 3 IPOs at a $1bn+ valuation (OVH, Believe, Made), (iii) €11.3bn raised in 2021 (+140% YoY) across c.600 transactions (+25% YoY), (v) €4.5bn raised by French GPs.
Learning n°2 - Mega Rounds are the Main Driver of the Ecosystem’s Growth
Growth rounds (€50m+) are driving the growth of the ecosystem and account for 65% of the amount raised by French startups.
Learning n°3 - The Flywheel of the Ecosystem is Spinning at an Incredible Pace
The flywheel is spinning at an incredible pace: (i) French mafias are exploding (25+ companies founded by Blablacar alumni), (ii) second time founders are starting companies with unseen growth trajectories (Sunday, Swile, Ankorstore, Pennylane), (iii) a new wave of business angels with experienced founders & operators which are giving back to the ecosystem.
Learning n°4 - Paris is the Sexiest European City in which to Invest in Tech
As a result, Paris has become the sexiest European city (ahead of London, Berlin and Stockholm) in which to invest and the competition to invest into French startups is now extremely intense.
Before 2021, only a couple of foreign funds were investing consistently in France (Accel, Balderton, GFC and Index). In 2021, several new categories of investors have poured capital into French startups: (i) top pan European funds (Creandum, Northzone, EQT, Headline), (ii) US funds (Benchmark, Sequoia, a16z), (iii) crossover funds (Coatue, Tiger, DST) and (iv) SoftBank.
Learning n°5 - Many Trends Have Shaped 2021
Many trends shaped 2021: NFTs, consumer insurance, productivity tools, B2B BNPL, consumer apps, mental health, quantum computer, tools for designers, grocery, electric bikes, expense management, passion economy, cybersecurity, etc.
Thanks for reading! Thanks to all the people who contributed to this report, and especially all of you who accepted to be interviewed: Rania, Jon, David, Thibaud, Sia, Jean, Cyril, Turner, Nico and Yann! Thanks to the team at Eurazeo and more specifically thanks to Clément, Louisiane and Loup. Thanks to my data providers (Dealroom, Crunchbase, eCap, Avolta, Nordic9). And obviously, thank you Julia, without whom this report wouldn’t exist! 🦒 See you next week for another issue! 👋