As the dust settles on a turbulent 2024, it's probably fair to say that the past year wasn’t exactly the smoothest year for French venture capital.
Fundraising became more painful and the industry saw its second consecutive year of decline as deal values dropped by nearly 15% in 2024 according to Pitchbook’s latest European VC report and according to Avolta’s 2024 FrenchTech Trends and Multiples report, French startups startups raised around €7.3 billion—a noticeable dip from the €8.8 billion raised by French Startups in 2023.
The overall number of investors participating in a round also fell steeply, with international and domestic funds retreating from the French startup ecosystem, according to Dealbook data:
There was a slight dip in the amount of funds raised by VCs in 2024 to $34.9 billion from $36.8 billion in 2023. However, the 2024 number is slightly skewed because it includes a $10bn fund closed by Antin Infrastructure Partners, the Paris-based global investment giant.
There were 87 new funds closed in France last year, according to Dealbook, compared to 80 in 2023.
Meanwhile, the UK saw a sharp increase in venture funds raised with $115bn raised across 183 new funds in 2024, versus $93.5bn for 142 funds in 2023. German VCs raised $15bn for 69 new funds, compared to $10.7bn for 49 new funds in 2023.
Overall, according to Pitchbook, France managed to hold its ground as Europe’s second-largest VC market, still outpacing Germany and sitting just behind the UK.
So, what’s the mood for 2025? We asked some of France’s top VCs what sectors they’re betting on, what’s catching their eye, and—on a scale of 1 to 10—how optimistic they’re feeling.
The responses were cautiously hopeful, with a heavy focus on transformative technologies.
Hot in 2025: AI, Climate Tech, and Cybersecurity
If there’s one thing everyone agrees on, it’s that AI will remain the big theme.
Breega’s Maximilian Bacot sees opportunities in “new verticals like genetics, bioscience, material science, and aeronautics.” Partech’s Réza Malekzadeh says, “Using AI to make apps better, faster, and cheaper will become table stakes.” Meanwhile, Ring Capital is looking at AI’s broader potential to reshape industries like education, agriculture, and even mining for critical minerals.
It’s not all about the shiny tech. There’s also concern about AI’s drawbacks.
Ring Capital is clear: “We need to address energy consumption and ensure these emerging AI technologies help to reduce social divides and not deepen them.” That sentiment hits harder when you consider Mark Zuckerberg’s latest U-turn on Facebook content moderation - a move that raises further questions about whether AI is part of the solution or the problem.
Climate tech will be another major priority. Deeptech and Climate tech fund, 360°, highlighted energy storage and urban sustainability as being key areas of focus - and sectors in which they will themselves be investing in through their new fund, 360 LIFE II.
Xavier Gury, Co-Founder of newly launched Article 9 fund Wind, agrees saying that the fund will focus in particular on AI for energy optimisation (grid, curtailment etc) and new materials as well as upcycling and recycling.
Meanwhile Ring Capital pointed to resource management and ecosystem restoration as key areas for innovation. Current European investment trends back this up: climate-focused startups attracted €2.2 billion across Europe in 2024, according to Avolta, solidifying their place in the spotlight.
And let’s not forget cybersecurity which remains a pressing concern. With more devices connected and generative AI becoming more sophisticated, risks from AI-enable threats, such as deepfake-driven phishing campaigns and sophisticated data breaches are growing fast. Malekzadeh from Partech pointed out that the rise of connected devices and the shift to cloud infrastructure have created an urgent need to rethink security frameworks - beyond endpoint protection - particularly in industries like healthcare and manufacturing.
Challenges in 2025: Plenty, But Also Opportunities
2024 wasn’t just a financial challenge for VCs, it was a political one. Snap elections and the resignation of France’s Prime Minister rattled market confidence and raised questions about the country’s appeal to foreign investors. Add to that Europe’s lowest VC fundraising count in a decade - €20 billion across 161 vehicles says Pitchbook- and you’ve got a recipe for caution.
Yet, there are bright spots. Several French VCs such as the newly formed Noetus, Elaia and Partech were able to raise significant funding over the past few months, despite the more challenging macroeconomic context.
As regards startup funding, although overall funding deals were down, according to the 2024 Avolta French Tech report median valuations remained steady last year despite the funding declines, suggesting that investors are becoming more selective rather than pulling back entirely. Public support from Bpifrance and the EIF has also helped anchor the ecosystem, though whispers of reduced public funding in 2025 have some investors worried.
Timid but positive signals are also making their way across the Atlantic as, according to Pitchbook’s 2025 US Venture Capital outlook, US VCs are anticipating a rebound in distributions after a low period, with improved IPO and M&A activity expected to ease liquidity constraints. A dynamic that could also benefit Europe if market conditions stabilize.
What’s the Mood?
Despite the hurdles, optimism is holding strong. Most VCs we spoke to rated their outlook for 2025 at 7 or even 8 out of 10. There’s excitement about transformative technologies, renewed interest in sustainable solutions, and hope that the market is finally stabilizing after a tough couple of years.
As one VC put it, “The challenges ahead are real, but so are the opportunities to reshape industries and create lasting impact.”
Looking Ahead
France’s venture ecosystem isn’t out of the woods yet, but its relative stability, resilience, and adaptability, coupled with European governments' support for sustainable innovation, means that it is in a strong position to weather uncertainties.
With focused investments in AI, climate tech, and cybersecurity, could this be the year that French VCs excel in Europe’s tech landscape?
Roll on 2025, we’re about to find out.
