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  • 🇫🇷 French Tech Updates — October 22, 2024. €134.2M in new funding for French companies.

🇫🇷 French Tech Updates — October 22, 2024. €134.2M in new funding for French companies.

What you need to know this week in France: 🤖 now models from Mistral, 🇪🇺 a petition for an EU Inc, 🚛 and an automotive acquisition.

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.

Can EU Inc close the funding gap? 👩‍⚖️

The European Union with its 448 million inhabitants is home to hundreds of innovative companies—many of which, like Pasqal (quantum computing), Nabla (ambient AI assistant for doctors), and Aqemia (drug discovery innovation), appear in this newsletter. Yet, despite its larger population and these innovative businesses, the EU consistently lags behind the United States when it comes to attracting venture capital investment.

In fact, the EU lags way behind…

In 2023, EU startups raised only 37% of the levels of venture capital invested into US companies, with just $52 billion deployed in the EU compared to $138 billion in the US. One explanation for this gap is that US venture capitalists simply have more cash to invest and are more likely deploy that capital in their home markets.

Another explanation is that Europe is comparatively a lot harder to invest in. The US benefits from a common language (78% speak only English at home), shared federal-level legal system, and unifying legal entities like the Delaware C Corp. As someone who has worked on internationalization and expansion in the EU I’ll admit the first two challenges are difficult, but they can be overcome with a diligent team and the right processes.

As of last week, a new petition is trying to address the third barrier as well.

The EU Inc petition, signed by major VCs and the founders of companies like Stripe and Wise, is pushing for the creation of a pan-European legal entity—a kind of “Delaware C Corp” for European startups. If successful, this new legal structure could simplify investment in European startups and attract more VC investment into the EU. This is great news and something to be watched closely.

However, local policies are not all moving in the same direction. Here in France, the government’s latest proposal to increase the taxes on BSPCEs, a popular tool for granting startup employees equity in risky but fast-growing businesses, could make it harder for French startups to compete for talent. While I hope this is not a case of one step forward and another back we’ll have to wait for the final budget decision to find out.

With that, let’s jump into this week’s update!

📝 Quiz: In Q3, the 10 largest funds raised by VCs topped $6 billion. Which fund raised the most, and how much did they raise?

(answer at the bottom of the newsletter)

  • A.) Balderton Capital, €1.9 billion

  • B.) Index Ventures, €2.1 billion

  • C.) Atomico, €2.6 billion

  • D.) Kennet Partners, €3.1 billion

What’s new this week in 🇫🇷

🌍 Headlines from around the world

  • 💸 The EU is weighing fines on Elon Musk’s companies (The Verge)

  • 🚫 The United States is considering capping exports of NVIDIA and AMD chips (Bloomberg)

  • 😰 TikTok sets aside $1 billion for potential EU data privacy fines (Forbes)

  • 💤 Two people have communicated through dreams for the first time (Tech Explorist)

  • 🤑 Harry Stebbing’s 20VC closed a new $400M fund (TechCrunch)

  • ☢️ Amazon announces plans to invest $500M in nuclear power for data centers (CNBC)

New Funding 💶

16 companies raised €134.2 million in the last week including €561K by Twise (Enterprise Software), €1M by Zola (HR Tech), and €3M by Auxo Dynamics (Deeptech).

Edgee | €2.66M | Open Source Edge Computing

Edgee has raised €2.66 million ($2.9 million) in pre-seed funding from Serena and VentureFriends to develop its open source edge computing platform. Founded by tech veterans Sacha Morard and Gilles Raymond, Edgee aims to revolutionize data collection and application performance by processing data closer to the user. The platform tackles issues like incomplete data capture due to privacy regulations and ad blockers, providing accurate, privacy-compliant solutions for developers and businesses.

Aiko | €3.5M | Space

AIKO, based in Turin and Toulouse, has raised an additional €3.5 million from Deep Ocean Capital’s Deep Blue Ventures and Primo Ventures to accelerate its AI-driven space mission automation solutions. This funding, part of a larger €6.5 million round, will support AIKO's international expansion, including its entry into the U.S. market. With plans to grow its team from 40 to 70 employees, AIKO aims to enhance its AI software for space missions.

Mendo | €3.5M | Education

3-year-old startup Mendo has raised €3.5 million to expand its SaaS platform that trains employees on generative AI tools like ChatGPT and Microsoft Copilot. Led by Emerge Education with support from Tomcat Ventures, the funding will help Mendo double the number of employees trained and recruit 20 new team members. With clients like Yves Rocher, PwC, and GRDF, Mendo plans to grow internationally, aiming to train 30,000 employees by 2025.

Storio Energy | €5M | Energy Storage

Storio has raised €5 million to support smart energy storage solutions for commercial and industrial clients. Founded in 2023, Storio helps businesses optimize energy use by storing solar power or off-peak electricity and releasing it during peak times to reduce energy costs. Storio's batteries also aim to stabilize the grid and generate revenue for their clients thanks to their software to remotely manage energy flows.

Aerleum | €5.5M | Clean Fuels

Strasbourg-based Aerleum has raised €5.5 million in a seed round led by 360 Capital and HTGF to advance its CO₂ capture and conversion technology. The company’s solution transforms CO₂ and low-carbon hydrogen into e-fuels and chemicals with an aim to decarbonize sectors like aviation and maritime.

Xpln.ai | €7M | Advertising

XPLN.AI has raised €7 million to redefine how advertising effectiveness is measured. Founded in 2022 by former Meta and Criteo employees, the startup's AI-driven platform focuses on tracking actual user attention to ads, offering insights beyond traditional metrics like impressions or viewability. With this funding, XPLN.AI also plans to expand in the U.S. and Europe.

Constellation Technologies & Operations | €9.3M | Telecommunications

Constellation Technologies & Operations has raised €9.3 million to develop a satellite constellation enabling telecom operators to offer high-speed, low-latency internet from space. Investors include Expansion, the French Tech Seed fund, and others. The company's unique approach leverages very low orbit satellites and telecom operators' 5G frequency bands, providing a competitive, sustainable space-based internet solution for areas without terrestrial networks.

Otoqi | €10M | Transportation

Paris-based Otoqi has raised €10 million in a funding round led by historical investors including Seventure and Swiss Post Ventures. The startup, founded in 2016, specializes in transport, fleet management, and delivery of vehicles—handling up to 2,000 vehicles daily. Otoqi plans to use the funds to expand into six new European countries by 2025 and enhance its AI-capabilities targeting an annual turnover to €100 million in four years.

Pretto | €12M | Real Estate

Paris-based Pretto has raised €14 million from its existing investors, including Serena and Eurazeo. The 100% digital mortgage broker uses an advanced algorithm to help users compare rates from major French banks. Despite a challenging real estate market, Pretto claims to have doubled its market share and revenue since 2022. With this funding, Pretto aims to expand its professional platform, Pretto Galaxie, and develop AI-powered solutions to enhance customer relations and support its brokers.

Gladia | €14.7M | AI Transcription

Gladia, based in Paris, has raised €14.7 million ($16 million) in a Series A round led by XAnge. The startup offers a multilingual, real-time audio transcription and analytics engine designed to handle over 100 languages and accents. Its AI platform extracts insights like sentiment and conversation summaries from calls in under a second. Gladia will use the funds to enhance its product offerings and expand internationally, focusing on voice-first platforms and contact-center solutions.

Najar (ex-Welii) | €15M | FinTech

Najar, formerly known as Welii, has raised €15 million from 13books Capital, Portage, and TOMCAT to enhance its AI-driven platform that streamlines procurement and financial operations. Founded in 2021 and HQ’d in Paris, Najar helps businesses save time and money by optimizing purchasing processes and managing SaaS expenses.

Autone | €15.6M | Inventory Management

Paris-based Autone has raised €15.6 million ($17 million) in a Series A round from investors including Speedinvest and YCombinator. The startup uses AI to help fashion retailers manage inventory more efficiently and claims to reduce stock levels by up to 55% while boosting sales by 30%.

Stoïk | €25M | Cybersecurity Insurance

Stoïk has raised €25 million in a Series B round led by existing investor Alven, with participation from investors including Andreessen Horowitz and Munich Re Ventures. The Paris-based startup offers cybersecurity insurance for European companies, aiming to protect against cyberattacks—a growing risk for SMEs. Stoïk plans to use the funds for international expansion, particularly in Southern Europe, Benelux, and the Nordics, while also developing advanced antivirus tools and complementary insurance services.

Events This Month 🗓

Interesting Jobs 👩‍💻

What Else I’m Reading 📚

  • State of AI report (Air Street Capital)

  • The quantum computing collapse has begun (sciencewtg)

  • Jimmy CEO Antoine Guyot on nuclear power's renaissance (French Tech Journal)

  • Would a time machine make you a great investor?…maybe not (WSJ)

  • The hottest startups in Paris (Wired)

New – Newsletter Recommendations 🫶

Planche Mixte

Why you’ll like it: Local restaurants, hidden gems, and fantastic recipe recommendations in Paris and beyond. Plus, I happen to be married to one of the writers ❤️

Trends.vc

Why you’ll like it: Short summaries of breaking topics in the world of startups and Venture Capital. An easy way to find new ideas and opportunities.

Quiz Answer: B.) Index Ventures, €2.1 billion

While Balderton, Atomico, and Kennet Partners, all based in the UK, did finish in the top 4 new fund sizes, Index Ventures’ massive $2.1 billion fundraise topped out the inflow of LP dollars for Q3.