According to EY, fundraising decreased by 49% in the first half of 2023, reaching €4.3 billion. However, France continues to be Europe’s top nation for financial operations supporting startup and expanding businesses.
No more quick cash. After surviving the financial crisis, France startup environment has been affected by it. According to a report released by EY on Tuesday, September 12. The value of funds raised for financing French startups fell by 49%. In the first half of the year to a total of €4.3 billion. While the number of deals decreased from 362 in the first half of 2022 to 395 over the same period this year. In spite of the fact that the downturn was already apparent in the second part of 2022. French Tech ended the year with a record-breaking €13.5 billion in funding. It’s difficult to think that it will be able to do better in 2023. It has never been able to bring in €9.2 billion in six months. Which is what it would need to achieve.
With €3.9 billion raised over the first half of the year. France continues to be the most alluring market in the European Union, followed by Germany. The largest deals, however, have not topped €250 million. and those over €100 million have been divided by five in an increasingly cautious financing market.
“A robust system”
Younger businesses also found it more difficult to raise money, with very few outliers like Mistral AI, which on June 13 managed to raise €105 million barely two months after its founding. In the current environment, many entrepreneurs must accept a decline in the valuation of their firm in order to raise money. A good example of this is Dataiku, which is value at €3.4 billion in 2022 as opposed to €4.2 billion in 2021. The multiples that French companies can use to determine their valuations have decreased from times ten at the height of the Paris market’s exuberance (early 2022) to times four today, according to Maya Noel, Managing Director of the France Digitale association.