France emerging as European tech hub? France passes Germany in tech startup funding; already raised $2.7B in 2019
• France now second largest European tech market by dollar funding, outpacing Germany and just behind the UK.
• Q2’19 dollar funding has been driven by nearly one dozen $50M+ deals, including rounds to notable French startups: Meero, Doctolib, and ManoMano.
La French Tech, a government-backed movement that represents the French startup ecosystem including startups, public organizations, incubators, investors and corporations, in partnership with CB Insights has today announced that French technology startups have raised more than $2.7B in funding in H1’19 across 381 deals. The quarterly La French Tech report notes that deals and funding to private French tech companies are on pace to reach record highs. Annual funding could reach a record $5.5B and deal activity may grow by 5% to 768 deals by the end of the year. The second quarter saw notable increases in deal and dollar activity, increasing 13% and 33% respectively from the previous quarter.
France is still the second largest European tech market by dollar funding, maintaining its narrow lead ahead of Germany in Q1’19. Although the UK maintained its position as the largest technology market in Europe, funding decreased by more than $2B ahead of the October 31st Brexit deadline – narrowing the UK’s lead over France, the only market of the top three to see growth in 2019.
Within France, Paris received $1.2B of investment across 83 deals in Q2’19; a record in quarterly dollar funding for the city. Other notable cities for French Tech deals in Q2’19 include Lyon, which received nine deals and Lille, which received six.
“This past quarter, France was the only major European market that saw funding and deal growth into tech startups as compared to its peers in Germany and the UK,” said Anand Sanwal, CEO of CB Insights. “There is a lot of momentum in France’s tech ecosystem at this time, and if 2019 continues at this pace, deals and dollars into tech companies should reach record highs.”
Key highlights for H1’19, according to the La French Tech and CB Insights report:
- Q2’19 deal activity saw an increase of 13% from the previous quarter. This is the highest quarterly total since 2017, and the third-highest total in the previous 5 years.
- Q2’19 dollar funding also increased from the previous quarter, growing by 33%. The largest deal of the quarter was a $230M Series C to commercial photography and video startup Meero.
- France’s average deal size ($7.6M) remains below the UK’s ($10.5M), highlighting the country’s relative emphasis on investing in and promoting early-stage start-ups.
- Some of France’s most active incubators and accelerators in Q2’19 are geography-focused. These include: (1) Paris&Co, the economic development agency of Paris, which helps incubate and assist hundreds of startups in the city every year, and (2) Impact USA, the program organized by Bpifrance and Business France to help French Tech startups launch in North America.
- Getaround’s acquisition of car rental platform Drivy for $300M marked the largest VC-backed acquisition in the first half of 2019.
While Germany and the UK witnessed flat and decreasing deal activity in Q2’19, respectively, France the only country to see increase in deal activity in Q2’19.
The full CB Insights report can be found here.
La French Tech represents the French startup ecosystem including startups, public organizations, incubators, investors and corporations. It is a government-backed movement bolstering France as one of the best countries in the world to start, scale, invest and work for global tech champions. La French Tech is also the nickname for all the people committed to the growth of this ecosystem wherever in the world they come from.