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  • 🇫🇷 French Tech Updates — September 16, 2025. €1.8 billion in new funding for French companies.

🇫🇷 French Tech Updates — September 16, 2025. €1.8 billion in new funding for French companies.

What you need to know this week in France: 📉 funding drops 35% YoY, 💰 Quadrille Capital raises €500M, 🏛️ political turmoil raises concerns for founders.

Author

James Saulsky
September 16, 2025

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.

Is French startup funding in trouble? 🛟

France Digitale and EY reignited one of my favorite debates with the release of their H1 2025 startup barometer last week: is French startup funding healthy or on the verge of collapse?

Top line, total startup funding declined for the third year in a row. The 35% decline in H1 funding vs. 2024 looks bad at first glance, but the headline number hides a more complex story beneath the surface.

The decline in H1 also saw Germany overtake France as the most-well-funded continental market for European startups. Not great for the age-old rivalry between these nations. However, the difference was driven almost entirely by mega-rounds in Germany for companies like Helsing (€600M), Green Flexibility (€400M), and Amboss (€240M).

France has been lagging on growth rounds of €100M or higher…until last week’s €1.7 billion fundraise for newly crowned deca-corn Mistral (France’s first) completely flipped this picture on its head and France may have just overtaken Germany again.

I’ve written before about how mega-rounds can drastically change the fundraising landscape, and when a single funding round can increase the amount of capital raised by 61% it’s more important than ever to look behind the numbers.

VC-backed rounds in France are still down (-7%) but dropped less than in Germany and the UK (-14% in each market).

What I find much more concerning is where the capital is coming from.

The French state is the largest supporter of French startups, with Bpifrance and France 2030 accounting for 58% of French startup investments so far this year. This high availability of public funding has been a stabilizing force in previous years as VCs went capital crazy in 2021-2022 and subsequently cut back on investments in 2023-2024.

Recently, whether this level of support can continue has been thrown into doubt as the government descends deeper into turmoil following the ousting of PM François Bayrou, a credit ratings downgrade, and continued pressure to lower the budget deficit.

If government support collapses it could be devastating for French founders, who are already looking to debt financing (34%) and bootstrapping (27%) as alternate funding options.

The full report is worth a read, but here are a few other insights that stood out:

  • 📍 Growth is shifting away from Paris. While Paris saw a slight decline in the number of startups, regions like Occitanie (+133%) and Pays de la Loire (+64%) surged. At the same time, startup revenues are growing more abroad (+57% in Europe) than at home, reflecting weak domestic demand but strong international expansion.

  • 💰 VC capital is fragile. About 40% of VC assets come from individuals, while pension and retirement funds barely register—unlike in the U.S. This reliance on wealthy individuals makes the ecosystem more exposed to downturns in domestic sentiment and liquidity.

With that, let’s jump into this week’s update!

📝 Quiz: This week Google parent company Alphabet was the fourth company to reach a $3 trillion valuation. Who are the other three companies?

(answer at the bottom of the newsletter)

  • A.) OpenAI, Microsoft, Facebook

  • B.) Amazon, Nvidia, Oracle

  • C.) Tesla, Apple, Amazon

  • D.) Nvidia, Microsoft, Apple

What’s new this week in 🇫🇷

  • 💰 Quadrille Capital Closes €500M for new funds: French VC firm Quadrille Capital raised €500M across its Growth, Primary, and Secondary funds. The firm aims to expand its pan-European and U.S. presence, doubling down on late-stage and crossover tech investments.

  • 🏛️ Government reshuffle casts uncertainty on startup policy: Clara Chappaz’s future as French Tech Mission director remains uncertain as new PM Sébastien Lecornu forms his cabinet. Founders are watching closely to see if startup-friendly policies survive France’s political turbulence.

  • 🧑‍💻 Revolut hires former Société Générale boss: Revolut recruited Frédéric Oudea, a top French banking executive, as the fintech doubles down on expansion in Europe. Meanwhile, over 200 Revolut employees are now paper millionaires after a secondary sale, which will hopefully fuel new reinvestment into the startup ecosystem, and maybe some new founders as well.

🌍 Headlines from around the world

  • 🤑 Web-based IDE Replit raised $250M at a $3 billion valuation (TechCrunch)

  • 🤖 Nvidia-backed Reflection AI is raising a fresh $1 billion round (Reuters)

  • 📈 Alphabet becomes fourth company to reach $3 trillion market cap (CNBC)

  • ☢️ US, UK sign nuclear power pact ahead of Trump visit (Semafor)

  • 🇰🇷 OpenAI mulls data center construction in Korea (The Korean Times)

  • 🇬🇧 OpenAI and Nvidia will invest billions into UK data centers (Bloomberg)

  • 🇨🇳 China says Nvidia violated antitrust rules, as trade rift deepens (Semafor)

  • 🪖 NATO ramps up health tech funding to prepare for potential war (Euractiv)

  • 💽 TSMC’s august revenues rose 34% on strong AI demand (Bloomberg)

  • 🤖 Abu Dhabi launches low-cost AI reasoning model in challenge to OpenAI, DeepSeek (CNBC)

  • 👬 Winklevoss’ twins finally get their IPO moment with Gemini public listing (Morningstar)

  • 🔋 Two Chinese EV companies are aggressively pursuing European expansion (Electrek)

New Funding 💶

8 companies announced €1.789 billion in new funding last week

Gobano Robotics | €3M | 🤖 Robotics

Paris and Nantes-based Gobano Robotics has raised €3 million to industrialize its AI-powered robotic arms, which can autonomously perform delicate tasks like folding, sorting, and assembly. The round, led by Axeleo Capital and Bpifrance Digital Venture, supports the rollout of its robotics AI pipeline—built on imitation learning and real-time adaptation—to meet rising demand for automation in European manufacturing. Gobano aims to make fine-motor automation economically viable where traditional robots fall short.

Nucleon Security | €3M | 🔐 Cybersecurity

Paris-based Nucleon Security has raised €3 million in support of its agentic AI cybersecurity platform and expanding commercially across Europe and Africa. The startup offers an all-in-one Zero Trust platform that automates the defense cycle from endpoint protection to malware analysis and is already used by 100+ clients globally. Backers include NewFund Capital (lead), CDG Invest, Orange Ventures, and others. The funding will boost industrialization of its AI and deepen R&D as it aims to become a global cybersecurity player.

Nona | €3.3M | 🥗 Food & Beverages

Paris-based canteen management service Nona raised €3.3 million to fund the next stage of growth for their all-in-one software platform. Their tools, used by over 700 institutions including the Banque de France and the Council of State, help kitchens manage menus, orders, hygiene, and supplier relations to increase efficiency by 15% and slash food waste six-fold. Backed by Banque des Territoires, InvESS, and impact investors, Nona now aims to deepen its sustainability features and strengthen ties with local producers.

Nepsis | €3.5M | 💶 Fintech

Paris-based Nepsis has raised €3.5 million to simplify energy transition financing for French SMEs and mid-cap companies. Their platform handles project analysis and structuring to deliver financing offers in under five minutes and has already attracted €80 million in project volume in the six months post-launch. The round, led by Bpifrance and joined by AFI Ventures, Hoji Ventures, 50 Partners, and Ring Capital, will help Nepsis expand its AI-based infrastructure and reach €100 million in financed projects by 2026.

Dianosic | €7M | 🧑‍⚕️ Medtech

Strasbourg-based Dianosic has raised €7 million to accelerate the development of its resorbable intranasal drug-delivery implants. The company focuses on chronic rhinitis, sinusitis, and epistaxis, and is now expanding into the promising "nose-to-brain" route for central nervous system therapies. The round was led by Aptar, joined by Noshaq, Capital Grand Est, and Finovam Gestion. The funds will go toward clinical trials and team expansion as Dianosic aims to scale globally.

Cailabs | €20M | 🔭 Deeptech

Rennes-based Cailabs has raised €20 million in equity and €37 million in debt to scale production of its advanced photonics technology, used for high-speed optical communication on Earth and in space. The round was supported by the European Investment Bank and equity funding from investors including Definvest, the EIC Fund, and NewSpace Capital. The new capital will support ramping up to 50 optical ground stations per year by 2027 and fuel international expansion as Cailabs positions itself as a key enabler of high-speed, secure space-ground communications.

Scintil Photonics | €50M | 💡 Semiconductors

Grenoble-based Scintil Photonics has raised €50 million ($58 million) in Series B funding to expand production of its integrated photonics tech for AI data centers. The company’s LEAF Light™ chip integrates multi-wavelength lasers onto silicon, enabling energy-efficient, high-bandwidth co-packaged optics for next-gen compute infrastructure. The round, led by Yotta Capital and NGP Capital with participation from NVIDIA, will fuel global hiring and high-volume deployments.

Mistral AI | €1.7B | 🧠 AI

It’s not very often that we see a “B” after a fundraising announcement in France. Paris-based Mistral AI is the first of the year with a fresh €1.7 billion round completed at an €11.7 billion valuation—making it Europe’s most valuable AI startup. Dutch photolithography machine producer ASML led the round with a €1.3B investment and took an 11% stake in Mistral, a rare strategic move for the publically-traded chip equipment giant. Alongside the investment, ASML also announced that Mistral’s open-weight frontier models will be integrated across ASML’s semiconductor tools to further link Europe’s AI and chip powerhouses. Additional backers in the round include Nvidia, Andreessen Horowitz, Bpifrance, and DST Global.

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Quiz Answer: D.) Nvidia, Microsoft, Apple

Apple was the first to top the $3 trillion mark in 2023 followed by Microsoft and Nvidia in 2024.