Government instability and lack of budget to date in France, capital flight from Europe to the United States, drop in fundraising: French startups are facing significant uncertainties this year.
Faced with this, they are preparing and above all defining their main priorities for this year. And it is a return to the fundamentals of business that is recommended. PMore than ever, French startups want first and foremost to focus on activity, turnover and looking for new prospects to continue to grow. « The current economic cycle is unfavorable for businesses and startups are no exception. The major concern of leaders today is doing business. Despite the context, it is important more than ever that private and public actors continue to invest in innovation, and choose to buy from young innovative companies made in Europe », Says Maya Noël, general director of France Digitale.
Especially since entrepreneurs have seen the wave of generative Artificial Intelligence (AI) sweep since 2022. This should allow them to generate more turnover for their business. They are therefore working to properly integrate AI into their processes. “ Entrepreneurs have clearly understood that it is in their interest to adopt AI because it is a real lever of competitiveness for them against their competitors. If a business manager decides not to use this technology, it is his competitor who will take advantage of it and potentially have a better product or service for sale », confides the manager. If French startups already have a significant rate of diffusion and use of AI, the same is not necessarily true for the rest of the other categories of “traditional” companies. Therefore, the latter, such as SMEs, ETIs or even large groups, are not as sensitive as startups to this technology. By taking advantage of Artificial Intelligence, SMEs or mid-sized companies, for example, can constitute new clients for French Tech, which develops tools linked to AI.
Funding and talent
The second major issue, according to the boss of France digitale, still remains the question of financing, intrinsically linked to the economic model of startups. They must find funds to continue to expand. However, with an extremely changing international context, the return of wars in Europe and the Middle East and the rise in interest rates, financing has become scarce for almost three years. French Tech has raised nearly 7 billion euros in 2024, according to our internal Maddy Money barometer, an amount down 17% compared to last year. What worries Maya Noël: “ Where we could raise funds in less than six months, the deadlines were lengthened due to a lack of visibility at the global level. And therefore investors were more reluctant to invest, it took longer to put together a funding round, hence the amounts which are falling, even if good lifts exist and are obviously expected in 2025. But the other signal that we will have to be vigilant about is that investors themselves are having difficulty raising money. And that’s actually what’s going to really pose a problem in the long term.”
-Finally, French companies in the ecosystem must be able to find the necessary talents to be able to grow. “ Job creation in the sector still exists but is slowing down. Recruiting the right talents, training in the right skills, this remains the crux of the matter when it comes to creating great companies, having the right researchers, etc. So you have to know how to stay attractive. In addition, we must continue to encourage young people who are entering the job market to undertake or take the risk of joining startups. ».
In this sense, it calls on public authorities to continue to instill a long-term vision in favor of entrepreneurship and French Tech. Always with the aim of “making France an entrepreneurial land”.
