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.

Tech deals thawing out 🔥

The temperature outside may be cold here in Paris, but fundraising and startup activity is heating up across France. Over the last week, €427M in new capital flowed into French startups in industries ranging from electric boat engine manufacturing to crypto trading platforms (Crypto! I know, right?).

On a personal note, thank you for your patience with this (slightly) delayed edition of the newsletter. I was moving apartments over the weekend and ambitiously thought “surely I can do that and write the newsletter on the same day.” …such is the perpetual curse of life as an optimist.

Just this month we have already discovered a new phase of matter and landed a new spacecraft on the moon. But, we still haven’t found a way to make moving enjoyable. If anyone is working on this, please let me know.

Anyway, let’s jump into this week’s update!

What’s new this week in 🇫🇷

• 👶 France eying parental leave reform: the move follows recently declining birth rates, which reached a record post-WWII low last year and reversed a 4-decade trend of France as a high birth date outlier in Europe.

• 🌍 French startups shine at the World AI Economic Forum: Mistral, Pasqal, and others made a strong showing in a year where the high-profile meeting in Davos was as inundated with AI startups as it was with powerful world leaders.

Startup To Watch – PhotoRoom 👀

At a little over 4 years old, AI image editing app PhotoRoom predates the current AI hype wave. That hasn’t stopped them from experiencing their own form of hypergrowth. Since coming out of YCombinator in 2020, they’ve rapidly grown to 60 million app downloads and €50M in ARR as of last summer. Following on the success of their photo background removal tool, PhotoRoom has gone on to add object removal, batch editing, and generative image creation to their expanding suite of tools.

Although PhotoRoom has been featured in high-profile consumer partnerships with the likes of Time Person of The Year Taylor Swift, their primary audience is B2B. Even small differences in image quality can have a big impact on sales which makes the paid version of the app a worthwhile investment for the SMBs who are PhotoRoom’s primary customers.

With a unique market position, a strong product offering, and impressive growth, PhotoRoom is definitely a startup to watch in 2024. Oh, and did I mention they may soon be adding another €55M to their cap table?

New Funding 💶

After a quiet start to the year funding picked up last week with 7 companies raising €427.6M.

Events This Month 🗓

• Wednesday, January 24th 19:00: Thinking about launching a startup? Networking with 360 Capital

• Wednesday, January 24th 12:00-13:00: Revenue, runway and returns: How to go-to-market in 2024

• Wednesday, January 24 – Saturday, January 27: MID3M+24, international music conference in Cannes.

What Else I’m Reading 📚

• How They Grow Newsletter: how Zapier grew to $230M ARR with $1.3M in funding.

• Chart Mogul’s SaaS Growth Report: benchmarks and lots of great charts on best-in-class SaaS metrics. My favorite? Only 13% of SaaS startups reach $10M+ ARR after 10 years in business.

• The Early-Stage Growth Game Part II: ideas for a new (potentially better) way to support early-stage companies from Jeff Becker, GP at Antler.

• Spending €1B to Swim in the Seine: hosting multiple Olympic aquatics events in a river that has been too dangerous to swim in for over a century certainly is an impressive goal. But how can it be done?