Despite growing investor concerns and a dip in valuations of many global firms, French startups continued to raise millions in venture capital (VC) funding last year.
According to data from the government-backed initiative La French Tech, local startups, including eight newly minted unicorns, raised a record €13.5 billion in 2022, a 16% increase from the roughly €11 billion secured in 2021.
Some of the firms to have benefitted from mega fundraising rounds (more than €100 million) and went on to achieve unicorn status include experience optimization platform operator Contentsquare, HealthTech specialist Doctolib and SMB-focused digital bank Qonto, which raised €600 million, €500 million and €486 million, respectively.
With these megarounds, these three companies also secured their spot among the French Tech Next40/120 companies, an annual government-backed program launched in 2019 to honor the 40 and 120 top-performing French startups.
Per data from a recent report published to coincide with the unveiling of the rankings this year, the Next40 and French Tech 120 startups raised a total of €5.8 billion in 2022, about 43% of the total funds raised last year.
Overall, the report noted that combined revenues — which is assessed as part of the evaluation criteria — of all 120 ranked companies totaled €11.3 billion in 2022, compared with €9.5 billion the year prior, with more than 70% of the companies doubling their revenues from 2019 to 2022.
“Every year, announcing the French Tech Next40/120 is an opportunity to take stock of the French startup ecosystem. The year 2022 showed us that it was in good shape,” Jean-Noel Barrot, minister delegate for digital transition and telecommunications, said in the report. “We can be proud that the ecosystem is flourishing and gaining an ever-stronger foothold in the global entrepreneurial landscape.”
Lydia, one of the 26 FinTech unicorns on the coveted Next40 list, recently celebrated the 10th anniversary of its first transaction. “I could’ve never imagined it was the start of such a massive […] phenomenon that will change the way people talk about and exchange money,” company CEO Cyril Chiche said in a LinkedIn post.
Founded in 2013, the mobile financial services platform, which is one of the most downloaded FinTech apps in France, has expanded from a peer-to-peer (P2P) payments app to include other offerings such as loans and savings accounts as well as cryptocurrency trading for its 5.5 million users.
In a previous interview with PYMNTS, Chiche said the firm is targeting 10 million European customers by 2025 and aims to become a financial “superapp” for millennials and Gen Z customers, a gap that traditional banks have not yet been able to fill.
“What [users] want is something that is on par with Spotify and Airbnb and all these major category-defining companies in other sectors. We don’t have this for banks, and we need one and we actually want a multiple of them,” he said.
Qonto, which also made the Next40 list for the third consecutive year, had what would be considered a successful 2022, announcing the acquisition of German rival Penta in July after its megaround earlier in the year.
The acquisition, which saw the French neobank for small businesses and freelancers expand its 350,000-client base with Penta’s existing 50,000 customers, is part of the firm’s long-term ambition to reach a milestone user base of 1 million in a few years’ time.
It’s a target that Co-Founder and CEO Alexandre Prot told PYMNTS can be achieved as they capitalize on investor confidence to accelerate growth across Europe. “We believe that Qonto has a bright future [and can] become the leading business finance solution for European freelancers and [small to medium-sized enterprises] SMEs, [reaching] 1 million clients by 2025,” he said.
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