Welcome to French Tech Updates! Your weekly source of startup, VC, and tech news and insights. I’m James, a startup-obsessed American living in Paris.

A lack of confidence 😔

It turns out the “no confidence vote” is accurately named for more than one reason. Confidence in the French government, economy, and tech industry have all been shaken following the collapse of Michel Barnier’s government a mere 3-months after he was appointed as Prime Minister of France. Macron is now scrambling to appoint a new Prime Minister “within days,” but the turmoil is far from over.

Reactions from French founders and VCs have been mixed in their intensity and direction. Some, like founding partner at growth VC Revaia Alice Albizzati, are standing by their belief that the French tech sector is mature enough to withstand this kind of instability.

So far, public markets seem to share this more positive outlook with the CAC 40 stock market index up 2.6% last week and shares of Light On, a French genAI startup that IPO’d on November 25, still up nearly 25% from the first day of trading.

Personally, I see last week’s shakeup as another tremor ahead of what could be a much larger earthquake across the French tech ecosystem. I’ve written many times about the funding gap between Europe and the US—a gap which persists despite government backed initiatives like the France 2030 plan and institutions like Bpifrance. Baring a radical change in French VC’s ability to raise LP capital, foreign funding sources will continue to be important for French companies. Chaos at the highest levels of government will discourage foreign investors from deploying capital in France—accelerating an existing negative trend that puts French companies at a funding disadvantage.

There’s more to life than money, and there’s more to startups than funding, but for certain kinds of capital-intensive businesses (deep tech, infrastructure, AI foundation models, energy transition, etc.) access to capital is a necessity—and France excels in many of these sectors. While funds domiciled in France often have mandates to back French companies the much larger pools of foreign capital are under no such obligations and political uncertainty is likely to drive them away.

Then there’s the question of talent. As anti-immigration, far-right politicians look likely to gain power in France, a turn inward to more restrictionist policies could further complicate hiring for French startups.

The way I see it, France is in an awkward position where the country is large enough to spar the creation of many promising startups, but not large enough for those startups to grow into global leaders without the support of capital and talent from abroad.

Whether those vital resources continue to arrive depends on how the political situation evolves in the next few months.

And with that, let’s jump into this week’s update!

📝 Quiz: ChatGPT has the highest usage of any AI chat in the world (big surprise). What % of AI chat usage is with ChatGPT?

(answer at the bottom of the newsletter)

• A.) 33.7%

• B.) 52.4%

• C.) 71.1%

• D.) 94.8%

What’s new this week in 🇫🇷

• 💔 Michel Barnier’s government collapses following no confidence vote: The outcome may not be a surprise given the lack of support from the left or right, but the leadership gap at a critical time in the 2025 budget approval process leaves many questions unanswered.

• 💶 Daphni reveals plans for a new €100 million impact fund : In partnership with Live for Good, Les Déterminés, and HEC Paris, the Time4 fund will offer €100K–€1M in first-check investments to 100 early-stage startups led by underrepresented founders.

• 🇺🇸 Mistral expands hiring in San Francisco: In addition to opening an office in the Bay Area, co-founder Guillaume Lample is also reportedly considering making the move to the US.

🌍 Headlines from around the world

• 🙅‍♀️ US appeals court upholds ban of TikTok (WSJ)

• 💰 xAI closes $6 billion investment (TechCrunch)

• 🤖 Salesforce plans to see 1 billion AI agents deployed next year (TechCrunch)

• 🇺🇦 Macron hosts president-elect Trump and president Volodymyr Zelensky in Paris (Le Monde)

• 🪖 A (brief) declaration of martial law in South Korea leads to chaos and confusion (AP News)

New Funding 💶

8 companies raised €44.5M in the last week including €900K by Limited Resell (second-hand marketplace).

Events This Month 🗓

• Secrets for a Successful Co-Founder Relationship – December 10

• 2024 ESCP Demo Day – December 12

• Startup Pitch & Networking, Paris – December 17

Interesting Jobs 👩‍💻

• 🤑 Head of Revenue Marketing @ Alma

• 🫡 Chief of Staff @ Upway

• 🔨 Product Builder Internship @ Back Market

• ♟️ Revenue Strategy & Operations @ LumApps

• 🖲️ VP Hardware Platform @ Pasqal

• 🤝 Partnerships Manager @ Brevo

• 👩‍🎓 Product Operations & Strategy Internship @ Alma

• 🧑‍🎓 Creative Strategist Intern @ Alan

What Else I’m Reading 📚

• The State of European Tech Report (Atomico)

• The first 3 hires on your growth team (Arnaud Hochart)

• How European SMEs performed in 2024 (Qonto)

• What France’s government collapse means for entrepreneurs (Sifted)

• The Moore’s Law update (Steve Jurvetson)

• Accel 2024 Euroscape: AI Eating Software (Accel)

• 2024 pop culture recap (Fast Company)

• The verticalization of everything (NFX)

Newsletter Recommendations 🫶

Quiz Answer: D.) 94.8%

I don’t know about you, but I was surprised by just how dominant ChatGPT is. Of course, an early lead is by no means a guarantee of a lasting victory. To see this point in action, look no further than the usage share of internet browsers since 1996.

While Netscape Navigator and Internet Explorer both claimed massive shares of the early browser market those positions were not able to endure 2+ decades of change. Interestingly, Internet Explorer’s usage share peaked around where ChatGPT stands today, at 95%.