French fundraising holds on, but runaway growth is over

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

Total amounts raised in France for the whole of 2022 should be around €15.5bn, up from €12.3bn in 2021, Avolta forecasts.

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

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

Fundraising doubled between 2020 and 2021

The $15.5bn of capital raised this year forecast by Avolta represents just a 26% increase from 2021, while fundraising had doubled between 2020 and 2021.

Likewise, the total collected only reached 2,500 million euros in the third quarter, while in the first quarter of the year it was still 5,000 million.

The In Extenso Essec barometer, for its part, indicates that the collection 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 in general is 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 great fundraising,” said Franck Sebag, a partner at EY, which also publishes a fundraising barometer every six months.

France in a good position… to resist!

“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, larger operations continue at a “more or less normal” pace.

But it is the small fundraisers, those who intervene early in the lives of young shoots, that are in significant decline, estimates the investment banker.

By sectors, software publishing or finance, traditional fundraising engines, are stagnating, Avolta stresses.

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

Real estate start-ups at 6.3 times their turnover

They are followed by real estate and financial start-ups, with 6.3 and 6.2 times their turnover, respectively (average value).

On the contrary, transport and food start-ups are the least valued, with 2.3 and 2.5 times their turnover, respectively (average value).

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