Countries can support their technology industries in many ways. In France, this involves the annual choice of a cohort of 120 high-potential startups – the French Tech 120 – including 40 private corporations considered the most promising, called Next40.
This yr’s French Secretary of State for Digital Affairs, Marina Ferrari, revealed this yr’s winners during the VivaTech week in Paris. According to her supervisors, this fifth grade was the most selective since the program was created.
France’s Tech Next40/120 program was launched in 2019 and lessons were learned along the way, especially when some unicorns turned out to be ZIRPicorns. Following the recommendations of technology specialists, the criteria have modifiedand half of selections are now based on revenue metrics moderately than fundraising.
As a result, only 28 of the French Tech 120 corporations chosen for 2024 claim valuations above $1 billion. On the other hand, La French Tech reports that the cohort collectively had net revenues of €10 billion in 2023compared to €7.5 billion in 2022. Thirty-one corporations recorded net revenues exceeding €100 million.
Collectively, this cohort reveals or confirms some interesting trends that France is following, similar to the development of advanced technologies and artificial intelligence. But it is also value taking a look at the recent Next40 winners: if and when the IPO window reopens, you’ll be able to expect some of them to go public and re-infuse the enterprise capital pipeline with long-awaited liquidity.
Without further ado, here’s the class of 2024 summed up in one image:
It’s not the most digestible format, so let’s take a closer look at it novices.
Welcome to the club(s)
Here are some of the corporations that have joined the Next40 list:
- Add guestsparent company BungalowSpecials i Campingi.comwhich joined the French Tech 120 group in 2023;
- CzapsVisiona B2B company that positions itself as a specialist in sovereign data processing;
- Ecuadorrenewable energy supplier who collected approx mix enterprise capital and crowdfunding;
- Equivalentsome adtech company previously often known as Smart AdServer, which was spun off from Aufeminin;
- How long are youone other green energy supplier;
- Malt, a freelance marketplace operating in France, Belgium, Germany, the Netherlands, Spain and Great Britain;
- “Mistertemp”online temporary employment agency;
- Mistral AIopen LLM rocket ship that has been widely rumored $6 billion fundraisingthree times the December valuation;
- Pennylaneaccounting software enhances this became a unicorn in February;
- Qair Groupyet one other renewable energy entity;
- Weezeventticket sales platform created in 2008.
What’s particularly impressive is how quickly Mistral AI found itself on the same list as the two-decade-old Weezevent. The artificial intelligence company has only recently been founded, but Arthur Mensch and his co-founders are now at the helm of one of France’s most promising corporations, one that will eventually be listed on the stock exchange.
Although this is somewhat suggested by the nickname “Next40” referring to the name of France CWC 40, it is too early to determine which ones will develop into IPO candidates and when and where. In 2023, Euronext was merely welcome 64 recent adsdown from 83 in 2022 AND 212 in 2021.
Among the remaining 80 corporations that graduated from FrenchTech 120, recent participants include Adagio, AQEMIA, Braincube, Comet, DriiveMe, Ekimetrics, Exotrail, Flowdesk, Foodles, Greenly, HappyVore, Hoppen, iSupplier, La Fourche, Madbox, Moon Surgical, Mooncard, mylight150 , Opteamis, Pasqal, PerfectStay, Planity, Shares, SiPearl, Swan, Umiami, Unseenlabs, Volta Medical, WAAT, WeMaintain and Worldia.
To our knowledge, none of those startups are unicorns (yet). Then again, perhaps it should never have been the North Star. Either way, this is able to be a difficult goal to achieve in recent months: investment in French start-ups dropped significantly last yr, including 13.49 billion euros in 2022 to 8.32 billion euros. According to EY, the largest group was green technologies €2.7 billion in financingand is also well represented in the French Tech 120.
Reflecting trends
French Tech 120 representatives come from various sectors, from fintech to space technologies, but clear trends may be noticed.
However, a caveat: for the first time, applicants were asked to honor commitments on gender equality and ecological transition. The latter may have given a bit more weight to green tech corporations, which make up 30% of the Class of 2024, but that is also roughly in line with the share of investments they attracted last yr.
AI is one other sector where French startups have attracted mega rounds, even at the seed stage. Something is happening with AI startups in France and the French government I would like to support it. French Tech Next40/120 reflects this trend, including Mistral AI, but also pharmatech AQEMIA and quantum computing startup Pasqal.
In addition to artificial intelligence, deep technologies top the list, accounting for 23% of the 120 corporations. Again, this is not a surprise: we have already reported that in Europe, the development of advanced technologies is supported by public financing.
The French Tech Next40/120 program also offers additional advantages. There is no direct financing involved; the principal profit is the promise of less friction and “unnecessary institutional obstacles.” It’s quite telling that this is being touted as something big and that more corporations could probably profit from it. But if you wish world champions, you have to start somewhere.
France’s Tech Next40/120 has already crossed borders: in 2024, 88% of new-class corporations will have a physical presence or significant business activity abroad.
Being elected will give them greater visibility internationally, but at home it’ll open doors for them more directly: from 2023, an initiative called “I select French technology” encourages public administration and large corporations to obtain solutions from French startups. Now that markets care more about profitability, it’s much more tangible than a unicorn’s horn.