Emmanuel Macron never tires of unicorns. He would like to see more and more of these start-ups valued at more than a billion dollars hatch in France. After reaching its goal of 25 unicorns on the territory three years in advance, it has set a target of 100 before 2030. The future will tell if this threshold is reached. In any case, it is likely that in the next two years, the pink book of the start-up nation will be full.
GP Bullhound’s 2023 Tech Titans report, published on June 14 at the Viva Technology show, reveals that 20% of the 50 European start-ups best placed to become unicorns are French. And if we focus on the ten candidates most likely to obtain this status within two years, this ratio increases to 60%. The six French people selected by GP Bullhound are Agicap, Brevo, CoachHub, Pennylane, Deepki and Akeneo. A pleasing forecast considering that of the ten start-ups selected by the investment bank in 2021, nine have indeed obtained unicorn status, including Sorare, Ecovadis and Qonto.
If it materializes, it will be a great performance, because turning into a unicorn today is much more difficult. The rate cuts decided by central banks to cushion the economic shock generated by the Covid pandemic have led investors to take increasingly risky bets, fueling excessive valuations of young shoots. “We have seen start-ups that did not even have a real product reach valuations of 40 or 50 times their income, it’s lunar,” the CEO of Potloc confided to us last September, with annoyance.
Since the authorities signaled the end of recess, the tech sector has had to change its plans. Large groups have laid off workers by the shovel (30,000 job cuts at Amazon, 20,000 at Meta, etc.). And start-ups reviewed their business model to give investors a clear horizon of profitability. New unicorns have become rarer: only 34 created in the last twelve months in the perimeter studied by GP Bullhound (Europe and Israel) compared to 125 the previous year.
After the unicorns, the pursuit of the decacorns
The appearance of a herd of new French start-ups valued at more than a billion dollars would be good news. Because for the time being, France has only 33 representing 77 billion dollars of cumulative valuation. The United Kingdom already lists 61 of them (for a total valuation of 271 billion dollars) and Germany 38 (valued at 119 billion dollars).
If unicorn status has the merit of setting a clear and ambitious objective, it cannot however be an end in itself. These companies must eventually manage to make a profit. And that they take more scale in France. No tricolor start-up has, for example, yet reached the status of “décacorne” (more than 10 billion valuation).
While the United Kingdom stands out in fintech and Germany in industry, France is scattered and our start-ups lack “specific areas of specialization”, underlined last May in L’Express Gilles Babinet, President of the National Digital Council (CNNum), entrepreneur and author of How Hippies, God, and Science Invented the Internet (Odile Jacob).
Admittedly, the tricolor scene knows how to produce beautiful marketplaces (Blablacar, Doctolib, Vestiaire collective). As proof, the success of a Mirakl which allows groups such as La Redoute or Decathlon to transform into “mini-Amazon”, by opening a market place where they sell both their products and those of third-party sellers ( on which they take a commission).
The paradoxes of French AI
However, France is not yet sufficiently present in the areas that will transform the economy of tomorrow, in particular artificial intelligence. A shame when large groups are snapping up experts from French courses in AI. But the specialists who try the entrepreneurial adventure on the spot quickly come up against the wall of financing. This is why nuggets launched by the French, like Hugging Face, finally came to the United States. The big data and AI companies listed in the top 50 start-ups most likely to become GP Bullhound unicorns come mainly from the United Kingdom, Southern Europe and the Nordic countries.
The great fundraising that the French Mistral AI has just succeeded in (105 million), just one month after its creation, however, marks a profound change. And a report drawn up by MP Paul Midy, presented to the government on June 14, includes a detailed list of measures to boost the financing of start-ups. It is based, among other things, on better directing French savings towards tech and innovation and the establishment of a unified “young company” system with tax deductions for investments in deeptech and in young companies. of innovation and growth.
The MP’s report also outlines a strategy to encourage large companies to develop corporate VC funds and the best scientific establishments in the territory to launch ten university funds. A whole range of measures which could release up to 3.5 billion euros of additional investment per year, according to the text.