© Unsplash/Charles Deluvio
The ScaleX Invest white paper, which looked at the journey of 1,231 French start-ups created after 2005 and having raised more than 5 million euros in equity capital , draws an alarming observation. Out of this sample, 8.2% of companies find themselves in difficulty today, of which 65 have already gone bankrupt, representing a total of 944.2 million euros of funds raised gone up in smoke.
Young start-ups particularly affected
If previous years had already shown worrying signs – with around twenty failures recorded in 2022 compared to an average of four over the last ten years – 2023 appears to be the worst year for French start-ups. ScaleX Invest analysts emphasize that the majority of bankruptcies recorded over the last 8 years took place during 2022 and 2023, reflecting a sudden acceleration of the phenomenon.
The study also highlights a correlation between the age of companies and the difficulties encountered. Start-ups 6-8 years old seem to be the most vulnerable: 70% of bankruptcies concern companies that have raised funds in the last three years. This observation raises questions about the sustainability of the business models of these young shoots and their ability to generate sufficient revenue to ensure their long-term survival.
Turning off the tap
Faced with this alarming observation, players in the start-up ecosystem are wondering what measures should be taken to avoid a massacre. Some are calling for increased support for companies in difficulty, while others are arguing for greater selectivity in the allocation of funding, in order to prioritize the most solid and promising projects.
It is therefore clear that players in the sector will have to learn the lessons of this dark year to build a more resilient ecosystem that is better equipped to face the economic challenges to come.
- In 2023, French start-ups experienced a record number of bankruptcies
- The youngest start-ups are the most affected: 70% of bankruptcies concern companies having raised funds over the last three years
- Sector players are calling for better support as well as # 8217;to greater attention in the allocation of financing during fundraising
📍 To not miss any news from Presse-citron, follow us on Google News and WhatsApp.