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👋 Welcome to our weekly recap of the big news + funding in the French tech ecosystem this week. In this week's French Tech Wire,

👀 Deep Dive: In Q1 2025, startup funding hit a 7-year low. We talk to 2 prominent VCs to unpack the trend.

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

Chris O'Brien + Helen O'Reilly-Durand

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🤔 Edito 🤔

Last week, I discussed the alarming drop in venture capital investment in France (and the UK, and much of Europe). Now comes Bpifrance, with a bit more color about the dearth of funding.

According to a new report, the bank said Growth Equity rounds in Q1 2025 fell to €884 million raised across 21 deals of at least €20 million. That's down 14% from the same quarter a year ago.

This prompted the expected hand-wringing that Europe will never really be competitive with the U.S. So, how are things going in the U.S.? Turns out, a bit better – but not by much.

Yes, the $40bn-ish funding round for OpenAI announced this week would seem to suggest otherwise. But in reality, the mega rounds being raised by a couple of dozen AI companies obscure the reality that the overall number of startups raising VC funding in the US is also plummeting.

In Q1 2025, US startups raised $48bn, according to Dealroom. That's a slight increase from the $43.8bn raised in Q1 2025, but a big slump from the $61.1bn raised in Q4 2024. US startup funding has not collapsed. But it has been effectively treading water since 2018, bobbing around the $40bn to $45bn range with the exception, of course, being the VC bubble between Q2 2021 to Q3 2022.

What is collapsing in the US is the number of startups raising VC funding. About 1.5k startups raised a round in Q1 2025, down from 3.1k in Q1 2024, and way down from the 6.4k at the peak in Q1 2022.

A concentrated number of late-stage and/or GenAI winners are hoovering up the cash that is flowing.

In France, the story is the same. In Q1 2025, 121 companies raised a VC round. That's down from 290 in Q1 2024, and way down from the 545 peak in Q1 2022.

On a percentage basis, the rate of decline in the number of startups raising in France and the U.S. is about the same.

What's behind this collapse? One possible explanation is the phenomenon that Marjolaine CATIL and I explored last month: AI is making startup scaling so much more efficient that founders don't need to raise as much cash at the early stages.

Another reason is that exits in the U.S. remain in a slump, both M&A and IPOs. The overall number of IPOs was slightly up in Q1 2025, but these were mostly small offerings and mostly in the first half of the quarter. There were only three IPOs that raised $1+ billion, and only one major tech offering – CoreWeave, which had to massively reduce the size of its offering to get close to the valuation it wanted. How crappy is the exit market? According to PitchBook: "CoreWeave's high-profile US IPO accounted for roughly 26% of the total exit value globally. The number of completed IPOs has been low, and although there is still time for new listings to emerge this year, increased market volatility has created uncertainty around potential IPOs."

European markets have massive structural issues when it comes to IPOs. But the US exchanges are not exactly setting the world on fire (the overall number of public companies in the US has shrivelled over the past 2 decades).

And electing a chaos monkey who has rattled markets hasn't helped matters and kneecapped dreams of an IPO boom this year. Meanwhile, Big Tech has retreated from Big M&A, leaving other VC-backed companies to fill the gap – deals that often involve stock swaps and so don't necessarily create any liquidity. Corporates have stepped in, but not much.

This all raises a larger existential question: Has the VC model run its course?

Chris O'Brien

🚀 Tech Talk 🚀

👼👿 For the Biblical scholars amongst ye, let us now look upon this passage from the Book of Mark: “What does it profit a man to gain the whole world and forfeit his soul? For what can a man give in return for his soul?” (Mark 8:36–37). Well, in the case of the Rippling employee turned mole for rival Deel, he doth profit about €5,000 a month, according to his affidavit filed in the legal case in Ireland. That probably tops out at €40,000 – and maybe less. According to the affidavit by Keith O'Brien (no relation!), he was hired by Deel CEO Alex Bouaziz, the US-based Frenchie, who suggested he stay at Rippling: "Alex told me he 'had an idea.' He suggested that I remain at Rippling and become a “spy” for Deel, and Irecall him specifically mentioning James Bond. I asked him what he meant. He said he would offer me a monetary reward if I agreed to spy on Rippling for Deel. I told him I would have to think about it...In exchange for the monetary reward, Alex told me that I would need to provide him information regarding Rippling’s 'ways of doing things' which I understood to mean corporate strategy, customer insights and other interesting company information."

Eventually, Rippling sniffed out the plot, ensnared the Deel team in a honeypot, and sent O'Brien running out the door (after he escaped from the bathroom!). More to come, no doubt.

🍎 France’s competition authority took a bite out of Apple, fining it €150 million for abusing its dominant position through its App Tracking Transparency (ATT) feature. The watchdog found that Apple created an unfair competitive advantage by applying stricter privacy rules to third-party apps than to its own services. The decision follows a two-year investigation and is seen as a major win for the French digital advertising and media industry, which claims ATT significantly harmed their business models. France Digitale also welcomed the ruling, calling it a timely reminder that digital market players must respect competition law equally. | LinkedIn

👩 👩 💸 Revaia, Europe's largest female-led venture capital firm, announced the final close of its second fund at €250 million, following an initial tranche of €150 million secured over a year earlier. Founded in 2018 by Elina Berrebi and Alice Albizzati, Revaia focuses on investing in European growth-stage companies (Series B and beyond) that demonstrate a commitment to sustainability, with investment tickets ranging from €10 million to €30 million. The firm has already made six investments from this new fund, dedicating about a third of the capital to follow-on investments, particularly to support portfolio companies in mergers and acquisitions. Despite a challenging fundraising environment, Revaia attracted both returning and new institutional limited partners, including Bpifrance, JP Morgan, the European Investment Fund (EIF), and BNP Paribas Cardif. | Sifted, Les Echos, Maddyness

🇫🇷✊ VivaTech is baaaaaack. The 2025 edition of VivaTech, taking place from June 11–14 in Paris, will focus on “new frontiers of innovation” across technology, business, geopolitics, and societal impact. This 9th edition will feature over 14,000 startups, 4,000 partners, and 300 new innovations, with artificial intelligence as the central theme. Key topics include advances in robotics, sustainability tech, digital trust, and wellbeing innovations—like mental health detection via AI, AI drug discovery, and smart hearing glasses. Canada will be the “Country of the Year,” and new participants like the U.S., Saudi Arabia, and Nigeria will join the event. The creative industries will also take center stage, with immersive experiences such as the AI film festival and Viva Night. Notable speakers include leaders from Alibaba, NASA, McLaren, Sanofi, Meta, and Scale AI. | VivaTech (PDF), Maddyness

🤑 Shares, a fintech founded by Benjamin Chemla, announced a strategic partnership with Axa France to improve the management of employee savings. The collaboration aims to provide Axa’s corporate clients and their employees with a comprehensive solution to manage employee savings plans, retirement savings, and other workplace benefits. This partnership aligns with France’s "Value Sharing" law and reflects Axa’s commitment to innovation for its clients.

🧬 🧫 Smart Immune was placed under judicial reorganization on March 6, 2025, and is now seeking a buyer to continue its operations. Founded in 2017, the biotech had developed a promising cell therapy aimed at rapidly rearming the immune system to combat diseases like leukemia and HIV. Despite securing €30 million in funding—including €5 million from the Bill & Melinda Gates Foundation in 2023—the company faced financial challenges due to the substantial investments required in the biotech sector. | Les Echos

Other headlines:

🗞️ Can French gigafactory Verkor avoid Northvolt’s fate? | With the collapse of Swedish gigafactory Northvolt, all eyes are now on France’s Verkor | Sifted

French Tech Funding Collapse: Time To Panic?

What’s behind this decline? Are certain sectors holding up better than others? How does France compare to its European neighbors? And, perhaps the biggest question of all - is this just a temporary dip, or are we seeing a deeper, more structural shift?

To find out, we turned to two of France’s top VCs: Reza Malekzadeh, General Partner at Partech and member of the Partech Venture team; and Stéphanie Nizard, Partner and Head of Investor Relations at Serena.

💸 Top Funding Deals 💸

📇 Company: INTACT
🔍 Description: Produces plant-based and regenerative fermentation products using a low-carbon, patent-protected fermentation process.
💻 Website: intact-regenerative.com
📍 HQ City: Olivet
🧗 Round: Late VC
💰 Amount Raised: €70M
🏦 Investors: Not disclosed
👨💼👩💼 Founders: Alexis Duval
🗞️ News: LinkedIn

📇 Company: Fairmat
🔍 Description: Develops sustainable solutions for carbon fiber composite recycling and reuse.
💻 Website: fairmat.tech
📍 HQ City: Paris
🧗 Round: Series B
💰 Amount Raised: €26.5M (plus €25m in debt)
🏦 Investors: Bpifrance, Singular, Temasek, Pictet, CNP, Cape Capital, Slate Venture Capital
👨💼👩💼 Founders: Ben Saada
🗞️ News: Maddyness, Sifted

📇 Company: Tomorro
🔍 Description: AI-powered modern contract management platform.
💻 Website: tomorro.com
📍 HQ City: Paris
🧗 Round: Early VC
💰 Amount Raised: €25M
🏦 Investors: XAnge, henQ, Financière Saint James, Founders Future, Acton Capital, Adelie Capital, Motier Ventures, Resonance
👨💼👩💼 Founders: Antoine Fabre, Thibaut Caoudal, Sébastien Decrême, Kristen Williams, Matthijs Diederiks
🗞️ News: FrenchWeb

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