French Tech: start-ups resist in an increasingly uncertain context

© Unsplash/Charles Deluvio

While the global economic landscape is marked by growing instability, French start-ups continue to demonstrate impressive resilience. According to the 2024 France Digitale-EY barometer, the French Tech ecosystem maintains its dynamism in terms of job creation and revenue, despite a slowdown in fundraising.

1.3 million jobs in France

In 2024, start-ups generated more than 1.3 million direct and indirect jobs in France. Over the past 12 months, nearly 200,000 new jobs have been created, benefiting all regions of the country. Some areas, such as Occitanie (+36%), Auvergne-Rhône-Alpes (+33%) and Nouvelle-Aquitaine (+30%), are recording particularly marked growth.

Their economic performances have also proven solid. With a turnover up 27% in 2023, start-ups have generated nearly 10 billion euros in revenue, 40% of which now comes from foreign markets. This internationalization becomes a strategic lever to strengthen their competitiveness.

The artificial intelligence, deeptech and greentech sectors stand out as pillars of growth for the French ecosystem. While AI is attracting colossal investments, as demonstrated by the dazzling success of Mistral AI, 53% of venture capitalists are financing start-ups working towards the environmental transition.

« France has become one of the world leaders in innovation over the last ten years, thanks to an ecosystem that is fully connected to the international market and capable of offering differentiating solutions in the most promising sectors », comments analyst Franck Sebag, EY partner.

The financing ecosystem in difficulty

For the first time, the barometer has been extended to venture capital (VC) funds. And this is where the situation becomes gloomy. They, too, need liquidity. ” Upstream of the financing chain, even though they have never had so many assets under management, French VCs are still struggling to raise funds from foreign investors ”, the study details. Before deploying new funds, they must also repay their existing investors.

This directly affects the fundraising sector. While in 2023, financing fell by 38% to €8.3 billion, the trend is expected to continue negative this year. The decline in funding rounds will likely have repercussions on the job market. According to forecasts, the start-up ecosystem will generate 10,000 fewer jobs in 2024.

A global context that is unfavorable for start-ups

Furthermore, French Tech is facing external challenges that could slow its growth, such as economic and financial instability, geopolitical tensions, and the erosion of household purchasing power. In this difficult context, the specter of bankruptcies, which has been hanging over the ecosystem since 2023, remains a major concern.

To stay the course, stakeholders are calling on decision-makers to maintain stability in the political strategy for innovation in France and Europe. ” We are now at a stage of ecosystem development where structural decisions will have to be taken, such as mobilizing European institutional investors to finance innovation, initiating a rapprochement of European stock exchanges, or drastically harmonizing regulations in Europe », concludes Maya Noël, CEO of France Digitale.

• Start-ups are taking up an ever-increasing role in the French economy
• The sector faces many challenges in 2024, both in terms of financing and in the face of external factors such as political instability
• La French Tech calls on French and European decision-makers to take concrete measures to support innovation

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