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.

The final stretch 🏃‍♂️

It’s hard to believe, but there are only 57 days left in 2024. Historically, Q4 has been a quieter month for VC activity in Europe and, with a €2.5 billion gap remaining between 2023 and 2024 YTD fundraising in France, it will take an abnormally active November and December to match 2023 funding levels. As we approach the end of the year, it is increasingly likely that this gap will not be filled.

Across the board in France, 2024 funding lags behind last year, except for round sizes of €250 million or higher—which have seen €300 million more deployed vs. 2023. Meanwhile, across the Atlantic in the United States round sizes have gotten larger while the number of deals has fallen.

There’s still capital available, but VCs are concentrating more of their investments into fewer (likely safer) bets. In this environment, support for businesses at the earliest stages of their lifecycle will be increasingly important globally—especially in a growing startup ecosystem like we have in France.

The government can fill some of this need with programs like the France 2030 investment plan. So can private organizations like Station F and startup studios like the formidable Hexa, which has spun up several growing startups like Aircall, Spendesk, and Swan. With next year’s federal budget likely to introduce cuts to startup-friendly programs, support from these privately-led programs, angel investors, and investors located outside of France will be crucial for maintaining momentum in the country.

And now, let’s jump into this week’s update!

📝 Quiz: Of €41 billion raised by European startups in Q1-Q3 this year 70% went to the top 4 industry categories. What were those sectors?

(answer at the bottom of the newsletter)

• A.) 💶 Fintech, 🥗 Food, 🚚 Transportation, ⚡️ Energy

• B.) 💽 Semiconductors, 📈 Marketing, 🦾 Robotics, 🔐 Security

• C.) 🚚 Transportation, 🥗 Food, 🔐 Security, 💽 Semiconductors

• D.) 👨‍⚕️ Health, ⚡️ Energy, 🖥 Enterprise Software, 💶 Fintech

What’s new this week in 🇫🇷

• ✂️ The Budget 2025 debate resumes today: worries abound that additional cuts could be coming for R&D tax credits that benefit young, innovative companies as the government battles to lower France’s deficit.

• 🇪🇺 The European Innovation Council aims to invest €1.4 billion in 2025: the funding, a €200M increase compares to 2024, will go to companies working on deep tech, net-zero innovations, biotechnologies, agriculture, mobility, and space tech.

🌍 Headlines from around the world

• 🤑 The UK Budget will raise taxes on startup exit profits and carried interest for VCs, but not as much as was feared (Sifted)

• 🗳 US presidential elections on Tuesday loom large for American startups—and Americans in general (Franklin Templeton)

• 📉 Microsoft discloses a $13 billion equity stake in OpenAI (MSN), the investment is large enough to add $1.5 billion in additional expenses to Microsoft’s Q4 earnings from Open AI’s negative profits.

• 🏷 M&A activity in Europe is on track for a record year (PitchBook)

• 🚁 Beta eVTOL raises $318 million one week after competitor Lilium files for bankruptcy protection (Inc.com)

New Funding 💶

6 companies raised €101.3 million in the last week including €200K by Wine In Block

Upcoming Events 🗓

• Q3 2024 European Venture Capital Outlook (Webinar) – November 6

• Private Equity Insights Summit (contact Juliette here) – November 8

• 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

• European Defense Hackathon – November 29-December 1

• Airport Innovation Day – December 4

Interesting Jobs 👩‍💻

• 🫡 Chief of Staff @ Dark

• 🤖 Demand Gen Marketing Lead @ Mistral

• 👩‍💻 CEO Founder Associate @ Alan

• 📈 Senior/Staff Growth Product Manager Acquisition @ Back Market

• 👨‍💻 Product Manager @ Brevo

• 🤝 Strategic Account Executive @ Platform.sh

• 🧑‍🎓 Product Operations Internship @ Alma

• 🤝 Lead Partnerships and Business Development @ Qonto (referral link)

• 🧑‍🎓 AI Business Intelligence Intern @ Qonto (referral link)

What Else I’m Reading 📚

• Ten Years of AI Venture Capital Deals and Exits (Visual Capitalist)

• The Second $100B AI Company (Rex Woodbury)

• 52 Tiny Venture Lessons (The Generalist)

• The Ferengi Rules of Acquisition (Star Trek)

• The Battle of Lexington & Concord (Obscure Battles) – major nerd alert on this one

• Bodyguards inadvertently expose French President Macron’s location on Strava (Semafor)

• The best beer glass, according to science (Cornell University)

Newsletter Recommendations 🫶

Quiz Answer: D.) 👨‍⚕️ Health, ⚡️ Energy, 🖥 Enterprise Software, 💶 Fintech