There are many ways in which countries can support their high-tech industries. France annually selects a list of 120 promising start-ups (the French Tech 120), which also includes 40 private companies considered the most promising (the Next 40).
Marina Ferrari, France's new digital minister, announced this year's winners at VivaTech Week in Paris. Organizers said the fifth batch was the most competitive since the program began.
The French Tech Next40/120 program was launched in 2019 and lessons were learned along the way, especially when some unicorns turned out to be ZIRPicorns: following the recommendations of tech actors, the criteria were changed and now half of the selection is based on revenue metrics rather than fundraising.
As a result, only 28 of the 120 French Tech companies selected for 2024 claim a valuation of more than $1 billion. Meanwhile, La French Tech reports that the group as a whole will see net revenues of €10 billion in 2023, compared to €7.5 billion in 2022. 31 companies reported net revenues of more than €100 million.
Overall, the group uncovers or confirms some interesting trends that France is riding on, such as the rise of deep tech and AI. But it's also worth keeping an eye on Next40's new winners: we can expect some of these to go public when the IPO window reopens, once again injecting much-needed liquidity into the venture capital pipeline.
So, let's quickly put together the Class of 2024 in one image.
Image credit: French Tech Next40/120
This isn't a very easy format to understand, so let's take a closer look at the newbies.
Welcome to the Club
Here are some of the companies that made the Next40 list:
Other names on the list include AddGuests, the parent company of BungalowSpecials and Campings.com, which joined the French Tech 120 in 2023; ChapsVision, a B2B company that is positioning itself as a specialist in sovereign data processing; Ekwateur, a renewable energy provider that raised funds through a mix of venture capital and crowdfunding; Equativ, an ad tech company formerly known as Smart AdServer that was spun off from Aufeminin; ilek, another green energy supplier; Malt, a freelancer marketplace with operations in France, Belgium, Germany, the Netherlands, Spain and the UK; online recruitment company Mistertemp'; Mistral AI, an open LLM rocket ship rumored to be raising funds at a $6 billion valuation, triple its December valuation; Pennylane, an accounting software scaleup that became a unicorn in February; Qair Group, another renewable energy player; and Weezevent, a ticket sales platform founded in 2008.
It's especially impressive how quickly Mistral AI has joined the ranks of the 20-year-old Weezevent. The AI company only recently celebrated its first anniversary, but Arthur Mensch and his co-founders now lead one of France's most promising companies, one that could eventually become publicly listed.
It's too early to tell which of these will be IPO candidates and when and where they might take place, though that's somewhat hinted at in the “Next40” moniker, an allusion to France's CAC 40. Euronext has just 64 new listings in 2023, down from 83 in 2022 and 212 in 2021.
Among the other 80 companies that completed the FrenchTech 120, new entrants are Adagio, AQEMIA, Braincube, Comet, DriiveMe, Ekimetrics, Exotrail, Flowdesk, Foodles, Greenly, HappyVore, Hoppen, iSupplier, La Fourche, Madbox, Moon Surgical, Mooncard, mylight150, Opteamis, Pasqal, PerfectStay, Planity, Shares, SiPearl, Swan, Umiami, Unseenlabs, Volta Medical, WAAT, WeMaintain and Worldia.
As far as we know, none of these startups have become unicorns yet. But maybe it shouldn't have been the North Star. In any case, it would have been a difficult goal to achieve in recent months. Investment in French startups dropped significantly last year, dropping from 13.49 billion euros to 8.32 billion euros for 2022. Green tech is the largest group with 2.7 billion euros of funding, according to EY, and is also represented in the French Tech 120 by a large number.
Reflecting trends
The French Tech 120 represents a diverse range of sectors, from fintech to space tech, but some clear trends emerge.
There is one caveat, however: for the first time, applicants were asked to respect commitments on gender equality and the environmental transition, the latter of which could have placed a bit more emphasis on green tech companies, which made up 30% of applicants in 2024, roughly in line with the share of investment these companies received last year.
AI is another area where French startups have received significant funding from the seed stage. Something is happening with French AI startups, and the French government wants to support it. The French Tech Next40/120 reflects this trend, with not only Mistral AI, but also pharma tech company AQEMIA and quantum computing startup Pasqal.
Outside of AI, deep tech is a major player on the list, making up 23% of the 120 companies. This is no surprise, either: we've already reported that deep tech is on the rise in Europe, fuelled by public funding.
The French Tech Next40/120 program also comes with perks. It does not provide direct funding. Its main benefit is the promise of less friction and fewer “unnecessary institutional obstacles”. It is very suggestive that this is being promoted as a generous measure. Perhaps more companies will benefit from it. But if you want to have a global champion, you have to start somewhere.
The French Tech Next40/120 is already crossing borders, with 88% of the new class of companies having a physical presence or significant commercial activities abroad in 2024.
Being selected will bring international recognition, but it will open doors more directly at home: from 2023, an initiative called “Je Choisis la French Tech” will encourage public administrations and large companies to source solutions from French startups. At a time when the market is increasingly focused on profitability, this is something much more tangible than a unicorn's horn.