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  • 🇫🇷 French Tech Updates — September 8, 2025. €85.34M in new funding for French companies.

🇫🇷 French Tech Updates — September 8, 2025. €85.34M in new funding for French companies.

What you need to know this week in France: 🤑 Mistral soon to be Europe's most valuable AI company, 🪓 Microsoft cuts 10% of French workforce, ⚔️ €750M in new defense funding.

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.

Que Sera? 🔮

What a week this is shaping up to be. The news is more varied than Parisian weather with plenty of bright spots and rain showers all happening at once.

Today begins with a no confidence vote that is predicted to oust the fourth Prime Minister in the last two years. We follow that up that turbulence with some more bumps thanks to a general strike planned to start on Wednesday.

Against this backdrop, AI darling Mistral is close to cinching the spot of “Europe’s most valuable AI company” with billions in new funding, Microsoft is cutting its French staff, even as it tops a mind boggling $4 trillion valuation, and the background rumblings of great power conflict in Europe continue to push more funding towards defense tech.

There’s a lot to cover and only a few minutes to do it. So, with that let’s jump into this week’s update!

📝 Quiz: What % of VC capital raised in Europe has gone to all-female founding teams so far in 2025?

(answer at the bottom of the newsletter)

  • A.) 1.4%

  • B.) 2.9%

  • C.) 13.7%

  • D.) 24.1%

What’s new this week in 🇫🇷

  • ⚔️ BPCE just issued Europe’s first-ever bond dedicated to defense: The €750 million “European Defence Bond” will fund defense and security companies across the continent.

  • 🪓 Microsoft is cutting 10% of its workforce in France: the cuts will impact ≈200 jobs as part of a broader global layoff plan affecting 9,000 roles. The move comes amid internal turbulence, even as the company achieved the same $4 trillion valuation mark that NVIDIA surpassed in August. Most of the affected staff are based near Paris in Issy-les-Moulineaux.

  • 🤑 Mistral is about to become Europe’s most valuable AI company: Their latest $2 billion fundraise is on the cusp of closing, with ASML now as the largest shareholder thanks to their $1.5 billion investment in the round which values Mistral at €10 billion ($11.7 billion). Both companies have declined to comment for now on the news, first reported by Reuters over the weekend.

🌍 Headlines from around the world

  • 🛡️ Data security company Cohesity targets a 2026 IPO with $17 billion valuation (Dataconomy)

  • 🪙 Crypto exchange Gemini eyes a $2.2 billion Nasdaq debut (Barron’s)

  • 💳 Fintech Brex is planning for a $12 billion IPO alongside expansion into Europe (FT)

  • 🛍️ Klarna targets $14 billion valuation in US IPO (Reuters)

  • 💰 Revolut is set to create 200 paper millionaires with latest share sale (Sifted)

  • 🤝 Atlassian to buy Arc developer The Browser Company for $610M (TechCrunch)

  • 🚧 TSMC will start construction on a new computer chip fab in Taiwan next month (anysilicon)

  • 🚫 Australia released the full research findings behind their planned under-16 social media ban (ABC.net)

New Funding 💶

11 companies announced €85.34M in new funding last week including €1M by NeoEarth (Deep-Tech), €940K by Santafoo (Food & Beverages), and €1.5M by Suzaku (Blockchain).

Hydroclimat | €2M | 🌍 Climate Tech

Aubagne-based Hydroclimat has raised €2 million in its first funding round to scale its hyper-local climate risk modeling platform. The deeptech startup, founded by two climate science researchers, offers ultra-precise projections of climate impacts down to the building level, looking as far ahead as 2100. The funding, backed by the CCR-F fund, will support Hydroclimat’s commercial rollout and international growth as businesses increasingly demand granular climate intelligence.

Flagcat | €2.5M | 🎥 Entertainment

Paris-based Flagcat, a mobile-native webtoon studio, has raised €2.5 million from Acurio Ventures and The Players Fund to bring French-made manga, anime, and webtoons to a global audience. With 20+ in-house artists and six new series planned for worldwide release this year, the startup aims to become a major international creative force in the fast-growing vertical-scroll comic format.

Byome Labs | €3.6M | 🧪 Skincare

Paris-based Byome Labs announced €3.6 million in new funding to industrialize Byome Derma, a point-of-sale skin test that analyzes the microbiome in minutes using antigenic strips. The white-label solution enables cosmetic brands to offer AI-powered skincare recommendations based on real biological data.

Alpic | €5.1M | 🤖 AI Infrastructure

Paris-based Alpic has secured €5.1M ($6 million) in pre-seed funding led by Partech to develop the first cloud platform natively designed for MCP (Model Context Protocol). The startup—founded by the team behind Streamroot—is creating infrastructure for AI agents to safely interact with digital services, aiming to be as foundational for agents as HTTP was for the web. Early backers include founders from Mistral, Dataiku, and Datadog.

ArcaScience | €6M | 🧬 Healthtech

Paris-based ArcaScience has raised $7 million in seed funding to expand its AI-driven drug evaluation platform into the US and UK markets. The startup helps pharma companies improve benefit-risk assessments using unstructured biomedical data—crucial for cutting the time, cost, and failure rate of drug development. Backers include The Moon Venture, Pléiade Venture, Plug & Play, Bpifrance, and AKKA Technologies. Already working with big names like Sanofi, AstraZeneca, and GSK, ArcaScience is also part of a European AI initiative targeting pediatric brain cancer.

Zefir | €15M | 🏠 Real Estate

Paris-based proptech Zefir has raised €15 million in a round led by FinTech Collective with backing from Sequoia Capital and others. The company launched ZIA™, an AI-powered assistant that helps homebuyers by filtering, sorting, and recommending listings like a smart real estate agent. Zefir, which tripled its customer base and now processes €600 million in annual transactions, plans to use the funds to scale its tech and expand across France.

Osivax | €16.7M | 💉 Biotech

Lyon-based Osivax has secured €16.7 million ($19.5 million) from U.S. government agency BARDA to advance its universal flu vaccine candidate, OVX836. The recombinant shot targets the conserved nucleoprotein of influenza A viruses, aiming to offer broad protection—including in pandemic scenarios. Osivax plans to use part of the funding for a large-scale efficacy trial. Though OVX836 doesn’t cover influenza B yet, the company intends to tackle it next.

UNIVITY | €31M | 🛰️ SpaceTech

Paris-based SpaceTech startup UNIVITY has raised €31 million in funding from CNES under the France 2030 plan to accelerate its development of space-based 5G infrastructure. The funds will support the rollout of its VLEO satellite constellation, which aims to deliver low-latency, high-throughput internet by integrating with terrestrial 5G networks. UNIVITY previously raised €9.3 million and has strategic partnerships with TDF and ESA. Two prototype satellites are planned for launch by 2027, with full deployment by 2030.

Upcoming Events 🗓

Interesting Jobs 👩‍💻

What Else I’m Reading 📚

  • “Startup Nation” until 2027… and after? (Maddyness)

Newsletter Recommendations 🫶

Techpresso

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Quiz Answer: A.) 1.4%

Yikes. The picture is a bit better when you add in founding teams with at least one female co-founder, but still over 80% of all European VC capital raised this year has gone to all male teams.