French fundraising resists, but the unbridled growth is over

According to figures from the investment bank Avolta, venture capital funding for "tech" start-ups increased by 30% in France over the first three quarters of 2022, while it tended to decline, sometimes very significantly, elsewhere in the world: - 56% in China, -29% in the United States, - 19% in the United Kingdom, - 27% in Germany...

The total amounts raised in France over the whole of 2022 should be around 15,5 billion euros, against 12,3 billion euros in 2021, forecasts Avolta.

Preliminary data from the In Extenso Essec barometer also show a 30% increase in the amounts raised by French start-ups over the first 9 months of the year.

But the two barometers also show that the slowdown in fundraising is there.

The 15,5 billion in capital raised this year forecast by Avolta represents only an increase of 26% over 2021, while fundraising had doubled between 2020 and 2021.

Similarly, the total raised only reached 2,5 billion euros in the third quarter, while it was still 5 billion in the first quarter of the year.

The In Extenso Essec barometer for its part notes that fundraising for the third quarter of 2022 is 40% lower than that of a year earlier.

“The peak of the bubble was reached in the first quarter of 2022 and the trend is generally moving towards a landing, with difficult weather forecasts,” Patricia Braun, president of In Extenso Innovation, told AFP.

"It has clearly slowed down, we saved the month of September thanks to big fundraising", commented for his part Franck Sebag, partner at EY, which also publishes a fundraising barometer every six months.

"But France is probably the country in Europe best positioned to resist" this downward trend in venture capital investments in start-ups, he told AFP.

According to Avolta, the biggest operations are continuing at a "roughly normal" pace.

But it is the small fundraisers, those which intervene at the beginning of the life of the young shoot which are in significant decline, estimates the investment banker.

By sector, software publishing or finance, traditional engines of fundraising, are stagnating, underlines Avolta.

According to this investment bank, health start-ups are the most valued by investment funds, with company values ​​set at 8 times their turnover (median value).

Next come real estate and financial start-ups, at 6,3 and 6,2 times their turnover respectively (median value).

Conversely, transport and food start-ups are the least valued, at 2,3 and 2,5 times their turnover respectively (median value).