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.

Who will fund clean tech? 🌱

Clean tech investment in 2024 is following a confusing story arc. On one hand, VCs focused on the space already raised more new funding as of August than in all of 2023 and have plenty of cash to deploy. Climate tech companies in Europe have also been the biggest recipients of funding this year—spurred on by mega-deals like Electra’s €304 million Series B in France and €298 million in equity plus €4.2 billion in debt funding for H2 Green Steel in Sweden.

That news all seems pretty great for clean tech companies and their investors, but it’s only half the story. Last quarter saw a large pullback in funding for clean tech businesses and events like Donald Trump’s reelection in the US and the creation of anti-ESG funds have cast doubt on whether clean tech funding can continue along its current trajectory.

Bloomberg offers another reason for concern—are investors pitting potential clean tech and AI investments against each other?

Positioning the decision as a head-to-head battle or a zero-sum game between AI and climate tech companies isn’t exactly fair. But, in some ways, both sectors do bear similarities. For example, AI and clean tech are more likely than other areas to require new infrastructure and the high fixed costs that come along with it.

In a funding environment still dominated by SaaS investments features of clean tech, like high infrastructure costs and a higher prevalence of hardware products, can seem more like barriers than opportunities. As VCs determine how to invest limited dollars, they prioritize the higher costs of AI infrastructure over that of clean tech. The data certainly seems to suggest this is the case

To me, this outcome raises another question—are VCs really the best source of financing for clean tech companies? For capital intensive clean tech businesses, other funding options like debt and grants could be more attractive options, and a better match of risk and reward. With the US poised to deprioritize new public funding for clean technology, France has an opportunity to shine thanks to programs like France 2030, which prioritizes green investments. Whether France can add additional public options over the next 4-years and further establish the country as a hub for clean tech businesses could be key to long term success in the sector.

And with that let’s jump into this week’s update!

📝 Quiz: How much VC funding went to Climate Tech deals globally in Q3, 2024?

(answer at the bottom of the newsletter)

• A.) $10.8 billion

• B.) $4.8 billion

• C.) $7.2 billion

• D.) $2.9 billion

What’s new this week in 🇫🇷

• 🇫🇷 Macron responds to Trump’s re-election: in a speech given in Hungary, Macron advocated for a stronger, more independent Europe with a memorable food-based metaphor. According to Macron, “for me, it’s simple. The world is made up of herbivores and carnivores. If we decide to remain herbivores, then the carnivores will win and we will be a market for them.”

• 🕵️‍♂️ Polymarket comes under investigation in France: The predictions marketplace recently gained notoriety as traders using the platform enthusiastically speculated on the outcome of the US election. The largest of these traders, an anonymous French account going by Théo4, reportedly made $85 million by betting on a Trump victory using 11 different Polymarket accounts. Théo’s win has come with some unwanted scrutiny as French regulators have begun examining whether Polymarket violates French law.

• 🤝 Lyon-based software publisher Sogelink has acquired Netisys: the deal, closed for an undisclosed amount, is Sogelink’s fifth acquisition in the past two years. Netisys, a 21-year-old company based in Southeast France, writes software for infrastructure management, such as roads and ports.

• 💶 Paris-based Axeleo Capital closes €125 million for a new Green Tech fund: this new impact-focused fund is planned to reach €250 million in total AUM to be deployed across 15-20 investments in the energy, chemicals and materials, agriculture and food, and mobility sectors. The investments will go to first of their kind climate tech solutions.

🌍 Headlines from around the world

• 💰 Amazon explores a second multi-billion Anthropic investment (Reuters)

• 🚫 Canada shuts down TikTok office citing national security risks (Forbes)

• ✂️ Mozilla lays off 30% of its non-profit arm (TechCrunch)

• 📈 Nvidia surpassed Apple to become the largest company in the world by market cap (CNBC)

• 🤖 T Mobile to pay OpenAI $100 million for an interactive customer service chatbot (The Information)

New Funding 💶

7 French companies raised €109.1 million in the last week.

Upcoming Events 🗓

• Femmes & Numérique 2024 – November 14

• How to Tell Impactful Stories ft. Jamie Wong – November 14

• AI for Health – November 21

• Data Center World Paris – November 27-28

• Gen AI Days Paris – November 28

• The Story of Payfit, Hosted @ Hexa – November 28

• European Defense Hackathon – November 29-December 1

• Airport Innovation Day – December 4

Interesting Jobs 👩‍💻

• 📈 Senior Customer Marketing Manager @ PayFit

• 🎓 CEO Founder Associate Intern @ Alan

• 🎓 CTO Founder Associate Intern @ Alan

• 🧑‍🎨 Lead Product Designer @ Alma

• 🎓 Financial Crime Internship (French Speaker) @ Qonto

• 📈 Acquisition Manager @ Zefir

• 🎓 Strategy & Operations Intern @ Pennylane

What Else I’m Reading 📚

• What a Trump victory means for tech (NYT)

• The failure that started the internet (BBC)

• Presidential approval highs and lows (Roper Center)

• Napoleon’s campaigns (Epic History YouTube)

• Trump and Biden’s numbers (FactCheck.Org for Trump and Biden)

• The economic well-being of US households in 2023 (Federal Reserve)

• Marc Andreessen on his intellectual journey the past ten years (Erik Torenburg Podcast) – I don’t agree with all, or even most, of what Marc is saying here; however, this nearly two hour interview does offer some insight into the mind of a billionaire with an interest in politics. IMO Marc’s intellectual journey stops short in a few instances (such as not asking why corporate management teams have swung further left instead of right), but the interview is worth a listen if you want to better understand why some of tech’s most influential figures are changing their politics.

Newsletter Recommendations 🫶

Bonus Section 🤭

The past 8 days have been pretty weird following the US elections, so I wanted to share something that made me laugh in the hopes it brightens your week too. Surprisingly, this funny moment came from a Morningstar report about Mutual Funds’ startup investments—admittedly, not a typical source of humor.

…but wow can the writers at Morningstar throw some serious shade! Check out these highlights from page 2.

Mutual funds “do not appear to be skilled private-company stock-pickers”. Ouch.

It gets worse. “At the very least, they have poor timing…due to [their] penchant for investing in later-stage rounds when much of a company’s valuation has already been established.”

Essentially Mutual Funds are buying too high and too late, but the use of “penchant” here makes me think of this like some sort of strange addiction the managers have. They know it’s not right, but they just can’t help themselves. IDK 🤷‍♂️, I find this image very funny.

Quiz Answer: B.) $4.8 billion

It’s not easy out there for climate tech startups. Quarterly equity funding fell to a 4-year low last quarter—down 33% compared to Q2 of 2024 and down 56% from the start of the year.