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.

And now you’re back, from outer space 🚀

Or rather, now you’re going back to space. Two out of five French companies who announced new funding this week are building products in the space industry—perhaps fitting considering France is home to the world’s 3rd oldest national space agency after the Soviet space program and NASA.

France has been quietly innovating in space for many decades and is poised to continue. Thanks in part to the availability of government funding for space projects (€1.55B from the France 2030 plan), France’s space sector is home to more than 1,700 companies.

Back here on earth, last week also saw France “steal” a nuclear reactor from the UK, new EU backlash against Apple, and the acquisition of InsurTech Luko by Allianz.

Now, let’s jump into this week’s update! …but first, one more thing:

What’s new this week in 🇫🇷

Here’s the rundown of this week’s top headlines.

• 🤗 Hugging Face and Google collaboration: Hugging Face, which hosts Meta’s Llama 2 and Stability AI’s Stable Diffusion AI models, is partnering with Google to offer Google Cloud Platform’s computing resources to developers building AI applications with Hugging Face’s open models. Compute costs for training AI models are expensive, and this partnership can significantly lower those costs for developers hosting models with Hugging Face.

• 🍎 Apple’s app store changes spark anger: Well that didn’t go as planned…or did it? To comply with the EU’s Digital Markets Act (DMA), Apple will allow app developers to sell products through 3rd party stores as soon as March—allowing them to skirt Apple’s 30% fee. But, there’s a catch. Developers who opt into the new plan will have to pay 50 cents per year, per user. Even for free apps. The internet is not happy with the changes.

• ⚡️Newcleo finds a new site: London-based nuclear energy startup Newcleo has done an about-face and will build their first modular nuclear reactor in France instead of in the UK as originally planned. The change follows two years of UK permitting delays for the factory and a fair bit of personal lobbying from Emmanuel Macron. Last year, Newcleo also won a €20M grant from Bpifrance.

• 📶 Privacy-focused Murena launches its own mobile network: Murena Mobile will first be available in the US, with plans to expand to Europe.

Startup To Watch – LumApps 👀

Just a few years ago, an “Employee Experience Platform” wasn’t even a type of product most C-suites knew existed. In 2024, with roughly 40% of employees still working remotely or in a hybrid setup, keeping employees engaged, informed, and happy is more challenging than ever.

LumApp’s Employee Experience Platform acts as a digital HQ for more than 4 million users around the world. Like more HR-adjacent software, the product has a lot of depth—but LumApp’s main capabilities cover:

• Employee communications

• Cross-location collaboration

• Internal training

• Engagement and community support

LumApps recently invested further in the B2B micro-learning space with the acquisition Teach on Mars, a startup in the employee training space. Their strong momentum on top of a global underlying need for better employee engagement tools makes LumApps a startup to watch in 2024.

New Funding 💶

Five French companies raised €56 last week, mostly in early-stage financing rounds.

M&A 🤝

Upcoming Events 🗓

• Wednesday, February 7th. 12-1 PM: From start-up to scale-up: how do you make your business sustainable? (Station F)

•  Thursday, February 8th. 7 PM: Doing entrepreneurship differently: the impact of residencies (Antler)

What Else I’m Reading 📚

• The State of The French Tech Ecosystem 2023 (Alexandre Dewez)

• Humans Still Cheaper Than (Most) AI (Time)

  A note on this one. What I find interesting here is the rough market sizing this MIT study implies. MIT researchers found 0.37% of U.S. worker wages can be automated with current computer vision AI at a lower cost than employing human workers. As of 2022, that amounts to $38.8 billion annually. But that’s only computer vision AI. Open AI estimates ChatGPT4 could already impact 9.5% of all worker tasks—equivalent to $997.5 billion annually in wages. If AI companies adopt “work completed” pricing models, even with a 50% discount to human workers, that still implies the market could already be as big as $500 billion in annual revenue just with current technology.