👋 Welcome to our weekly recap of the big news + funding in the French tech ecosystem this week.

In this final edition of 2024, we have a special Deep Dive Double Dip:

🚀 Deep Dive: Trace for Good Co-founder Léa Gillet explains how the company wants to revolutionize traceability and ESG to build a sustainable future.

🚀 Deep Dive: Qwant CEO Olivier Abecassis breaks down its GenAI strategy for giving the search engine a future.

Subscribe to The French Tech Journal to access all the articles and archives.

Chris O'Brien + Helen O'Reilly-Durand

🗣️ Edito 🗣️

The French startup ecosystem continued to experience funding shrinkage in 2024. While some deals will likely trickle in over the holidays, the numbers are all but final and suggest the nation is still looking for the bottom.

According to Dealroom, French startups have raised $7.8 billion in 2o24, down from $9.4 billion in 2023. That is well off the surreal peak of $16.1 billion in 2022 but still above the $6 billion raised in 2020. Just two companies – Mistral AI and Poolside – accounted for about $1 billion of that 2024 total.

The squeeze is being felt across all stages. The main bright spots are AI (natch) and more surprisingly fintech which grew by 20%, according to L'Usine Digitale.

While global VC is still a mixed bag – AI funding = good; non-AI funding = not so good – the French ecosystem has also been hampered by the Cirque Politique that has cast down on the government's generous support for the sector over the past decade. That instability will spill into 2025.

The stakes surrounding this downturn extend beyond the founder and VC communities. According to a study published by France Invest, the tech sector's economic significance has become increasingly important to the nation's economy.

By the end of 2023, startups accounted for a combined revenue of €20.7 billion, reflecting a growth rate of 21.4%. Employment within startups also rose, with over 140,000 individuals employed, marking the tech industry as a substantial contributor to the French economy, Maddyness reported.

This sets up 2025 to be a pivotal year. Reaching stability, at the very least, will be crucial. Another precipitous funding drop could raise questions about whether the remarkable renaissance over the decade is enduring – or ephemeral.

Chris

🚀 Tech Talk 🚀

💅 ...Speaking of falling from grace, Meero popped back into the news this week. A former unicorn and darling of French tech, the self-styled "Uber for photography," has officially gone into full pivot mode by completing its transformation with a fresh new name: Diffusely.

Founded in 2016, Meero rose to fame by making life easier for companies like Uber, Airbnb, and Deliveroo, delivering top-notch visuals via AI faster than you can say "say cheese." At its peak in 2019, the company raised €205 million and scaled from 100 to 750 employees in just 18 months. But then, the company got photobombed by the pandemic. After months of radio silence, Meero acknowledged it had hit a wall, announcing layoffs and new leadership.

Enter Gaétan Rougevin-Baville, who took over as CEO in 2022. His mission: Reinvent the company. Diffusely now focuses on AI solutions like CarCutter (for car dealerships), ProperShot (real estate), and AutoRetouch (fashion).

"In 2022, we made a pivotal decision to focus entirely on AI-powered image enhancement," Rougevin-Baville wrote on LinkedIn. "It wasn't just a strategic choice - it was about building something sustainable and meaningful."

Over the past two years, the company poured €10 million into this strategic pivot. With half of its €10 million annual revenue coming from the U.S. and a lean team of 200 employees, the company is making a bid to survive its turbulent past.

"Today, Meero is becoming Diffusely," he wrote. "This new identity reflects both our technological foundation in diffusion models and our focused approach to serving specific industries. It's more than a name change - it's the culmination of a transformation in how we operate, build products, and serve our clients."

🏃‍♂️ This week also saw some big news drop in the VC world. Julien Codorniou, a former partner at Felix Capital and Meta's workplace wizard, is now joining the 20VC team as a General Partner, according to TechCrunch. It's the latest coup for podcaster-turned-VC Harry Stebbings who recently revealed that he had closed a $400 million fund. 🤑

🧑‍🎨 Hexa, the startup studio unveiled its latest creation: 10 new startups for 2024, doubling last year's output and inching closer to its ambitious goal of launching 30 startups annually by 2030. This eclectic mix ventures beyond Hexa's traditional B2B SaaS focus, diving into realms like AI infrastructure, open-source solutions, and healthcare innovations. Among these fresh faces are Reki, a navigator through the maze of non-dilutive financing; Basalt, an AI playground for teams to craft and deploy features; and Annette, a holistic guide on the weight loss journey. With new partners Julien Meraud and Ugo Vollmer joining the ranks, Hexa's plans to turn the crank on its innovation engine even harder in the coming years.

🦃 Thanksgiving may be long over, but BlaBlaCar is still in the market for more Turkey. The mobility company snagged a majority stake in Obilet, Turkey’s top platform for booking bus and train tickets. BlaBlaCar will add the company to its portfolio of multimodal travel services. 🚗 🚂 🚌

Deep Dive: Trace for Good Revolutionizes Traceability
and ESG

Trace for Good wants to bridge the gap between ambition and action in the space between sustainability and environmental regulation.

Co-founded in 2022 by Léa Gillet and Laura Bréban, Trace for Good focuses on the fashion industry, a sector with a significant environmental impact and a growing set of regulatory requirements. The company's SaaS platform allows companies to manage traceability and compliance by centralizing product and supplier data.

On the heels of a €3.5 million Seed round raised in November, the company is accelerating its product development and laying the groundwork for international expansion.

“Fashion is one of the most regulated sectors for sustainability, especially in France, with legislation like AGEC (NDLR a law to fight against waste and promote the circular economy) pushing brands to adopt more transparent and sustainable practices," Gillet said. "For many of our 50 clients, who are primarily fashion retailers, this is no longer a choice but a necessity.”

Deep Dive: Can GenAI Give
Qwant A Second Life?

Olivier Abecassis took charge of Qwant in 2023 after OVHCloud founder Octave Klaba saved it from the abyss. This begs the question: What potential did this duo see in Qwant that almost no other human on the planet did?

"There were 2 things," Abecassis said in a recent interview. "Building a search engine in 2024 is simpler than it was 10 years ago based on the ability to train models and access large data sets. Back then you had to get all the servers and build the capacity to scale. Today, the market is not the same and the technology is not the same. But also, we believe the search industry has been the same for 20 years. You do a query and you get a list of links with ads on the side. We think GenAI is a great opportunity to reinvent search. It's a good time to come to the market with a different solution."

Funding

📇 Company: TETMET
🔍 Description: Manufacturing technology for extremely light structures, using two orders of magnitude less material and energy.
💻 Website: https://tetmet.net
📍 HQ City: Puteaux
🧗 Round: Seed (final closing of round originally disclosed in June)
💰 Amount Raised: €1.20M
🏦 Investors: id4 Ventures; Wendel; MFG Invest; Material Ventures; rpv; Super Capital VC; Climate Club VC
👨💼👩💼 Founders: Tom Vroemen
🗞️ News: https://www.linkedin.com/in/tomvroemen/recent-activity/all/

📇 Company: HALIAS Technologies
🔍 Description: Advanced software solutions for optimizing online platforms and monitoring industrial equipment performance.
💻 Website: https://www.halias-technologies.com/
📍 HQ City: Meylan
🧗 Round: Seed
💰 Amount Raised: €1.05M
🏦 Investors: Rhône Dauphiné Développement; CoopVenture
🗞️ News: https://mesinfos.fr/38240-meylan/la-start-up-iseroise-halias-technologies-leve-plus-d-un-million-d-euros-212705.html

📇 Company: BforeAI
🔍 Description: Provides AI-predicted malicious domain lists, before they become active.
💻 Website: http://bfore.ai
📍 HQ City: Lunel
🧗 Round: Series B
💰 Amount Raised: €9.09M
🏦 Investors: Titanium Ventures; SYN Ventures
👨💼👩💼 Founders: Sebastian Cesario; Luigi Lenguito

📇 Company: Comand AI
🔍 Description: Empowering defense forces with AI-powered decision-making and operating capabilities.
💻 Website: https://comand.ai/
📍 HQ City: Paris
🧗 Round: Seed
💰 Amount Raised: €8.50M
🏦 Investors: Eurazeo; Frst Capital; Expeditions Fund
👨💼👩💼 Founders: Loïc Mougeolle
🗞️ News: https://www.frenchweb.fr/comand-ai-leve-85-millions-deuros-pour-mettre-lia-au-service-du-commandement-de-la-defense-europeenne/450331

📇 Company: Annette
🔍 Description: Innovative weight loss solutions combining medical treatments, personalized coaching, and continuous support for lasting results.
💻 Website: https://www.annette.care
📍 HQ City: Paris
🧗 Round: Seed
💰 Amount Raised: N/A
🏦 Investors: Hexa
👨💼👩💼 Founders: Gwen Le Calvez

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