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 late-stage comeback?…maybe 📈

Last week saw signs of life for later-stage funding with five Series-B or later rounds closing across France.

After a sleepy 2023 that saw later-stage rounds looking more lethargic than Spaceball’s Prince Valium, renewed activity in larger rounds is a welcome change—and one that was badly needed. Now the question for the hundreds of companies that need to raise Series B+ rounds in 2024 is whether last week was an outlier or a sign that larger funding opportunities are making a comeback.

Elsewhere, if you were online at all last week, you probably couldn’t escape the news of Microsoft and Mistral’s newly inked partnership. From hyperbolic stories heralding Mistral’s new Mistral Large model as “the ChatGPT killer” to dozens of hot takes on the open-source vs. proprietary debate, the announcement has set off a firestorm of debate.

For more on Mistral, Microsoft, and all French tech news from last week let’s jump into this week’s update!

What’s new this week in 🇫🇷

• 🤖 The new M&M is Mistral and Microsoft: The new partnership announced this week comes with a €15M investment from Microsoft and plenty of questions. You can find a good thread on the deeper implications here.

• 🍎 Apple dropping iPhone web apps? Not so fast: Apple is facing new scrutiny in the EU over its decision to remove web app support in iOS 17.4. Apple has cited the EU Digital Markets Act (DMA) as the reason for the planned change.

• 🏦 Secondary effects from France’s banking boom: since 2021 France has added over 5,000 banking and finance jobs in growth largely attributed to bankers leaving the UK post-brexit. Now, leaders at these banks are pushing for labor reforms to make hiring and firing in France (which is notoriously difficult!) easier, warning that current labor laws make further expansion less likely.

Startup To Watch – Alvo 👀

Liquidity is all the rage these days. With IPOs skidding to a near halt and billions of VC euros now stuck without exits it’s not hard to see why. There are plenty of respectable, non-monetary reasons to both create and invest in new businesses. But, as one of my favorite quotes from the 2000 film Almost Famous so beautifully puts it, “some money would be nice.”

This liquidity crunch doesn’t just apply to VC-backed businesses. For the 96% of all businesses in France with fewer than 10 employees, exits have always been a challenge. Many of these SMEs are successful in their own right but lack the scalability or market capture that’s so attractive to venture capital or private equity investors. This market includes fashion brands, service and logistics providers, and D2C companies generating revenues from a few hundred thousand to €5M+ in annual turnover. Historically, these have always been hard businesses to exit.

If you’ve read this newsletter before then you probably guessed where this is going. Here is where this week’s startup to watch comes into play!

Meet Alvo, a marketplace for buying and selling companies that adds structure and visibility to the process much like what LeBonCoin does for selling cars, clothing, and all manner of small listings.

Founded in 2022 by serial founder François Defossez and Germain Michou-Tonning (ex-Qonto), Alvo’s platform integrates a marketplace with advisory services and provides entrepreneurs with a way to locate buyers and for acquirers to pinpoint acquisition opportunities and access transparent information about acquisition targets.

I’m a huge fan of this model which takes a fragmented market mired in unclear processes and adds visibility and structure to enable increased deal volume at a faster pace. I’ve previously written at length about startups like Acquire.com, which offers this service primarily to companies in the US. Alvo identified a gap in the French market for a similar service but has also added a unique spin with an AI assistant for parsing deal information and data rooms. All of which makes Alvo a startup to watch in 2024.

New Funding 💶

9 companies raised €221.7M in the last week. AERIX SYSTEMS (drones), Play Makers (gaming), and Alcyconie (cyber security) are not included in the detailed recap but raised rounds between €1-€2M.

Events This Month 🗓

• March 4th, 17h – 20h30: The Paris Founder and Investor Meetup 2024

• March 18 – March 22: Deep Tech Days Global Summit

• March 29th, 14h – 19h: Meet French Start-Ups Recruiting for the World of Tomorrow

What Else I’m Reading 📚

• Millionaires don’t use astrology, billionaires do (Of Dollars and Data)

• The myth of hyper-growth (The Venture Crew)

• Lessons on Leadership: turning the worst ship in the Navy into the best (Farnam Street)

• Europe remains hard to crack for North American GPs (TechCrunch)