Welcome to a special edition of French Tech Updates! Normally, this newsletter is your weekly source of startup, VC, and tech news and insights written by me, James— startup-obsessed American living in Paris. In this special edition, we’re taking a closer look at all the fundraising news from Q1, 2025.

🪞Q1, 2025 in the rearview mirror

After a slightly lackluster 2024, Q1 gave us a glimmer of hope for French tech—but also some flashes of danger.

On the positive side, the first months of 2025 saw some impressive funding rounds, big climate bets, AI infrastructure projects, and fresh startup grants. On the other hand, global turmoil, disappointing public market performance, and an overall contraction in French GDP raised warning flags for potential dangers ahead.

This report recaps all the major stories, fundraises, and data points from the quarter. I hope you enjoy it!

Table of Contents

• 🆕 Venture Capital Comes Back to Life

• 📈 Cautious Optimism in Public Markets

• 💸 Notable Exits & Strategic Pullbacks

• 🔄 Strategic Shifts & Ecosystem Partnerships

• 🏛️ Policy Moves, Grants & Ecosystem Shifts

• 🌍 AI, Climate & The Future of Innovation

• ⚠️ Trouble Spots

• 🏅 Top 10 Deals of Q1

📊 Key Figures

🆕 Venture Capital Comes Back to Life

Despite a shaky macroeconomic backdrop, Q1 saw renewed momentum in French venture capital with several new funds totaling €522.4M announced across biotech, climate, and early-stage innovation.

• Daphni launched “Blue,” a €250 million climate-tech fund expected to support up to 40 startups addressing ecological and energy transitions. The fund remains open, with full close expected by year-end.

• Sofinnova Partners raised €165 million for Biovelocita II, its latest biotech-focused fund. Supported by pharmaceutical heavyweights like Amgen and Bristol Myers Squibb, the fund is backing early-stage therapeutic ventures across Europe.

• Emblem closed its second fund at €80 million, continuing its focus on seed-stage startups across France and the Nordics. With investment sizes ranging from €500K to €3M, Emblem had already made 16 investments, including Pivot and Volta.

• 4elements, a climate-focused startup studio, secured €27.4 million—mostly from government sources—to launch and scale 10 new climate ventures over the next five years.

📈 Cautious Optimism in Public Markets

Public listings returned to the French tech scene—but with mixed signals.

• Younited’s €152.6 million IPO marked the first Euronext Paris listing of 2025, debuting simultaneously in Amsterdam. The consumer credit startup’s successful raise was a rare bright spot in recent years for European tech IPOs.

• LightOn’s GenAI IPO stumbled out of the gate, with its first earnings report missing growth targets by 33% and shares falling 7.4%. The company went public at the end of 2024 with only €1.2 million in ARR and ten clients, raising questions about its readiness and motives.

💸 Notable Exits & Strategic Pullbacks

• AdCreative.ai was acquired by Taiwan-based Appier for $38.7 million, expanding Appier’s footprint in generative advertising AI and giving France a clean AI exit.

• Bumble shuttered Fruitz, the Gen Z dating app it acquired in 2022. The move came as part of a broader effort to refocus on core operations, which also included sunsetting Official—an app made for existing couples.

🔄 Strategic Shifts & Ecosystem Partnerships

The quarter saw several major partnerships and international moves:

• Quantum computing startup Pasqal partnered with NVIDIA and Microsoft Azure, enabling access to hybrid quantum-classical computing and embedding French deep tech into global platforms.

• BNP Paribas and BPCE launched Estreem, a payments processing joint venture that will handle an estimated 17 billion transactions annually, bringing scale and modernization to French fintech infrastructure.

• Mistral, France’s flagship AI startup, entered the defense space, partnering with German AI defense firm Helsing. This move was announced during Paris’s AI Action Summit, signaling a shift toward sovereign and military AI applications.

• Eurazeo committed €100 million to develop European data centers, partnering with Metrobloks to build in Milan, Madrid, and Berlin—a foundational bet on the future of AI infrastructure.

• The Texas-France Space Hub was announced, linking Houston and Paris through a biannual accelerator and fostering transatlantic collaboration in aerospace and research.

🏛️ Policy Moves, Grants & Ecosystem Shifts

French tech policy continued to evolve, with both promising support and looming concerns:

• La Bourse French Tech grant increased from €30K to €50K, a 67% boost aimed at helping startups in their earliest stages, administered by Bpifrance.

• France finalized its 2025 budget, with mixed reactions: the Innovation Tax Credit (CII) was reduced and France 2030 investments were cut by €2B.

• An EU Inc. petition gained traction at Davos, calling for a unified pan-European corporate structure to simplify scaling across the continent—a sign of Europe's appetite for deeper tech integration.

🌍 AI, Climate & The Future of Innovation

• The AI Action Summit in Paris brought together leaders from OpenAI, Google, and government, culminating in a commitment of €300 billion in European AI funding.

• Mistral appeared as a central player, forming new partnerships and expanding its influence beyond France.

• The World Economic Forum announced a European Centre for AI Excellence in Paris, positioning the city as a hub for responsible AI development and global collaboration.

• The UAE pledged between €30–50 billion to build a massive AI data center in France, with plans to anchor the investment at a new AI campus in Paris.

⚠️ Trouble Spots

• France’s GDP shrank 0.1% in Q4 2024, the worst quarterly performance since Q1 2022. While partly a correction after Olympics-fueled Q3 growth, 2025 forecasts remain cloudy with a return to slow growth projected.

• A ScaleX Invest survey found that 10.4% of French startups are at a high risk of bankruptcy. On average, companies that had already declared bankruptcy raised €32.5 million euros across their lifetimes.

• Agronutris entered safeguard proceedings, after struggling to raise capital. The insect protein firm had once been a promising player in sustainable feed and pet food.

🏅 Top 10 Deals of Q1

Loft Orbital
💶 Amount Raised: €162M (Series C)
🔗 Website: loftorbital.com
📍Location: France & USA
✏️ Description: Space infrastructure company with a “satellite-as-a-service” model to streamlines space mission deployment. Loft Orbital has cleared $500M+ in bookings and doubled revenue two years in a row.

Alice & Bob
💶 Amount Raised: €100M (Series B)
🔗 Website: alice-bob.com
📍Location: Paris, France
✏️ Description: Quantum computing startup focused on building a fault-tolerant quantum computer by 2030. Alice & Bob is known for its “cat qubit” approach—meaning they use a special type of quantum bit that relies on superpositions of coherent states (nicknamed "Schrödinger’s cat states") to make their quantum computers more resistant to errors.

Intact
💶 Amount Raised: €70M (Unknown)
🔗 Website: intact-regenerative.com
📍Location: Loiret, France
✏️ Description: Agritech startup developing infrastructure to enable more sustainable farming and food systems.

GravitHy
💶 Amount Raised: €60M (Series A)
🔗 Website: gravithy.eu
📍Location: Fos-sur-Mer, France
✏️ Description: Clean energy startup focused on decarbonizing steel production through a low-carbon hydrogen and Direct Reduced Iron (DRI) plant. Backed by EIT InnoEnergy, ENGIE New Ventures, and Plug, GravitHy aims to support sustainable industrial transformation.

Evergaz
💶 Amount Raised: €60M (Unknown)
🔗 Website: evergaz.com
📍Location: Paris, France
✏️ Description: Renewable energy company specializing in biogas and anaerobic digestion—a process where organic waste (like agricultural residue, food waste, or sewage sludge) is broken down by microorganisms to produce methane-rich gas for power generation.

73 Strings
💶 Amount Raised: €52.5M (Series B)
🔗 Website: 73strings.com
📍Location: Paris, France
✏️ Description: AI-powered fintech platform that helps with valuations and financial analysis of alternative assets for private equity and asset managers.

Flowdesk
💶 Amount Raised: €47.5M (as part of a €95M total Series B)
🔗 Website: flowdesk.co
📍Location: Paris, France
✏️ Description: Crypto trading infrastructure provider offering market-making services across 140+ platforms. Flowdesk helps maintain digital asset liquidity and raised fresh funds from HV Capital, BlackRock, and others to fuel further growth and innovation.

Nexstun
💶 Amount Raised: €45M (Series A)
🔗 Website: nexstun.com
📍Location: Mauguio, France
✏️ Description: Law enforcement tech company developing the EstunGlove—an electric impulse glove aimed at non-lethal intervention and de-escalation.

Swan
💶 Amount Raised: €42M (Series B – second tranche)
🔗 Website: swan.io
📍Location: Paris, France
✏️ Description: A Banking-as-a-Service platform enabling companies to embed financial services like IBAN accounts, SEPA direct debits, and card issuing. Currently processing €1.5B monthly for 150+ clients. Swan aims to expand across Europe—starting with Italy.

Bioptimus
💶 Amount Raised: €37.27M (Seed)
🔗 Website: bioptimus.com
📍Location: Paris, France
✏️ Description: AI-driven biotech startup aiming to build the first universal foundation model for biology. Spun out of Owkin and backed by Sofinnova, Bpifrance, and others, Bioptimus uses multimodal data and generative AI to accelerate scientific discovery in life sciences.