There are a lot of methods nations can go about supporting their tech industries. In France it entails selecting a yearly cohort of 120 high-potential startups — the French Tech 120 — together with 40 personal corporations deemed as most promising, dubbed the Next40.
The French secretary of state for Digital Affairs, as of this yr, Marina Ferrari, revealed this yr’s laureates throughout VivaTech week in Paris. Based on its promoters, this fifth class was probably the most selective for the reason that inception of this system.
The French Tech Next40/120 program launched in 2019, and classes have been discovered alongside the way in which, particularly when some unicorns turned out to be ZIRPicorns. Following suggestions from tech insiders, standards have modified, and half of the choice is now based mostly on income metrics, moderately than fundraising.
In consequence, solely 28 of the French Tech 120 chosen in 2024 declare valuations of $1 billion or extra. Then again, La French Tech stories that the cohort collectively had a internet income of €10 billion in 2023, in contrast with €7.5 billion in 2022. Thirty-one corporations reported a internet income above €100 million.
In mixture, this cohort reveals or confirms some fascinating tendencies that France is driving, such because the rise of deep tech and AI. However it’s also value zooming in on new laureates of the Next40: If and when the IPO window reopens, the expectation can be for a few of these to go public and reinject long-awaited liquidity into the enterprise capital pipeline.
With out additional ado, right here’s the category of 2024, summed up in a single picture:
That’s not probably the most digestible format, so let’s take a better have a look at newcomers.
Welcome to the membership(s)
Listed here are a few of the corporations that joined the Next40 checklist:
- AddGuests, the mother or father firm of BungalowSpecials and Campings.com, which had joined the French Tech 120 in 2023;
- ChapsVision, a B2B firm that positions itself as a specialist in sovereign information processing;
- Ekwateur, a renewable vitality supplier that raised a mixture of enterprise capital and crowdfunding;
- Equativ, an adtech firm previously generally known as Good AdServer that spun off Aufeminin;
- ilek, one other inexperienced vitality provider;
- Malt, a freelancer market lively in France, Belgium, Germany, the Netherlands, Spain and the U.Ok;
- Mistertemp’, a web-based momentary work company;
- Mistral AI, the open LLM rocket ship that’s rumored to be elevating cash at a $6 billion valuation, 3 times its valuation in December;
- Pennylane, the accounting software program scaleup that turned a unicorn in February;
- Qair Group, yet one more renewable vitality participant;
- Weezevent, a ticketing platform created in 2008.
It’s spectacular, specifically, to see how briskly Mistral AI joined the identical checklist as two-decade-old Weezevent. The AI firm solely lately turned one, however Arthur Mensch and his co-founders at the moment are on the helm of certainly one of France’s most promising corporations, and maybe finally a publicly listed one.
Whereas that’s considerably implied by the “Next40” moniker alluding to France’s CAC 40, it’s too early to inform which of those will flip into IPO candidates and when or the place. In 2023, Euronext solely welcomed 64 new listings, down from 83 in 2022 and 212 in 2021.
Among the many different 80 corporations that full the FrenchTech 120, new entrants are Adagio, AQEMIA, Braincube, Comet, DriiveMe, Ekimetrics, Exotrail, Flowdesk, Foodles, Greenly, HappyVore, Hoppen, iSupplier, La Fourche, Madbox, Moon Surgical, Mooncard, mylight150, Opteamis, Pasqal, PerfectStay, Planity, Shares, SiPearl, Swan, Umiami, Unseenlabs, Volta Medical, WAAT, WeMaintain and Worldia.
To our information, none of those startups is a unicorn (but). Then once more, possibly that ought to by no means have been the North Star. Regardless, it will have been a troublesome aim to realize in latest months: Funding into French startups declined considerably final yr, from €13.49 billion in 2022 to €8.32 billion. Based on EY, inexperienced tech was the most important cohort with €2.7 billion in funding, and can be properly represented within the French Tech 120.
Reflecting tendencies
The French Tech 120 come from a wide range of sectors, from fintech to house tech, however there are clear tendencies at play.
A caveat, although: For the primary time, candidates had been requested to respect commitments when it comes to gender equality and ecological transition. The latter may have given a bit extra weight to inexperienced tech corporations, which characterize 30% of the 2024 class, however that’s additionally roughly in keeping with the share of funding they attracted final yr.
AI is one other sector wherein French startups attracted mega-rounds, even on the seed stage. There’s one thing happening with AI startups in France, and the French authorities desires to help this. The French Tech Next40/120 displays that development with the inclusion of Mistral AI, but additionally pharmatech AQEMIA and quantum computing startup Pasqal.
Past AI, it’s deep tech that comes up as a heavyweight on the checklist, accounting for 23% of the 120 corporations. Once more, that’s no shock: We already reported that deep tech was on the rise in Europe, with tailwinds from public funding.
The French Tech Next40/120 program additionally comes with perks. There’s no direct funding concerned; the principle profit is the promise of much less friction and fewer “unnecessary institutional obstacles.” It’s fairly telling that that is touted as a largess, and presumably, extra corporations may benefit from that. However if you wish to have international champions, you need to begin someplace.
The French Tech Next40/120 already crossed borders: 88% of corporations within the new class have a bodily presence or important industrial exercise overseas in 2024.
Being chosen will give them extra worldwide visibility, however it’s at dwelling that it’ll extra instantly open doorways: Since 2023, an initiative known as “Je Choisis la French Tech” encourages public administrations and huge firms to obtain options from French startups. Now that markets care extra about profitability, that is rather more tangible than a unicorn horn.