🇫🇷 Which French Unicorns Are Still Worth $1bn+?

Overlooked #191

Hi, it’s Alex from 20VC. I’m investing in seed & series A European vertical solutions (vSol) which are industry specific solutions aiming to become industry OS and combining dynamics from SaaS, marketplaces and fintechs. Overlooked is a weekly newsletter about venture capital and vSol. Today, I’m trying to understand which of the French unicorns are still worth over $1bn.

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As part of the publication of my 2024 report on the French tech ecosystem, I’ve prepared several posts based on the report, highlighting the key themes covered. While the first post focused on AI, this second post reviews French unicorns based on three criteria to determine which ones are still worth over $1bn.

A key topic of discussion in the tech industry revolves around the future of companies that raised capital at unicorn valuations during the tech bubble of 2020-2021.

According to Meritech, in the US, out of c.950 private unicorns, only c.50 companies (e.g. SpaceX, Canva, Bytedance, Wiz, Deel, OpenAI, Databricks, Stripe, Flock Safety) have a clear path ($300m in ARR, 25% YoY+ ARR, close to profitability) to become market leader in their category and eventually IPO . The c.900 other startups will have to be purged by the system: growing into their valuation, consolidation, shut-down or “zombies”.

I attempted a similar exercise with the French tech ecosystem, taking a more granular approach by reviewing each local unicorn individually.

To date, France has produced 45 unicorns defined as companies having been worth $1bn+ at one point in time in its history. France added 3 new unicorns in 2024 with Pennylane, Pigment & Poolside.

I wanted to understand how many of these 45 unicorns are still worth $1bn? In my view, you need to satisfy at least one of the three following criteria:

• The company raised at $1bn+ valuation within the past 24 months showing that the venture market validated the unicorn valuation after the covid bubble,

• The company generates $100m+ in ARR / net revenues showing that the business has enough scale to justify a $1bn+ valuation. The underlying assumption is that these businesses would be valued > 10x their ARR / net revenues. I think it’s fair when the business respects the rule of 40 (revenue growth rate + operating margin > 40%) but could be a wrong criteria if the top-line growth is weak (below 20%) and/or the business is massively unprofitable.

• The company experienced at least 20%+ YoY headcount growth over the past 2 years showing that the company has enough momentum commercially and/or on the fundraising market to keep hiring at scale. I needed to have a criteria for companies which are not disclosing revenues metrics and which have not raised a round in the past 24 months.

Based on these criteria, 73% of French unicorns are very likely to still be worth over $1bn+ showcasing the resilience of the ecosystem.

Moreover:

• In tech (and even in France), no-one is too big to fail. You can go from $1bn+ in valuation to bankruptcy as illustrated by Made.com’s bankruptcy in Nov. 2022,

• It takes time for French unicorns to grow into their last valuation or to accept a valuation reset. In the 2020-2022 cohort of unicorns, 77% (23/30) have not raised another round to date,

• Dataiku and Vestiaire Collective have reset their valuation with a down-round. All other unicorns which are not able to grow into their valuation will have to either become profitable or reset their valuation,

• There are only 5 French unicorns ready to go public (€300m+ ARR/net revenues, growing 20-30% YoY, relatively close to profitability): Backmarket, Dataiku, Qonto, Doctolib and Contentsquare.

I welcome any feedback on the methodology or insights. I tried to find an approach that made sense to me, knowing it’s inherently imperfect, so I’m open to suggestions for improvement!

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Thanks to Julia for the feedback! 🦒 Thanks for reading! See you next week for another issue! 👋