There are many ways countries can support their technology industries. In France, it involves choosing an annual cohort of 120 high-potential startups (the French Tech 120), including 40 private companies considered the most promising, called Next40.
The French Secretary of State for the Digital Economy starting this year, Marina Ferrari, revealed this year’s winners during VivaTech week in Paris. According to her promoters, this fifth promotion was the more selective since the beginning of the program.
The French Tech Next40/120 program was first launched in 2019 and lessons have been learned along the way, especially when some unicorns turned out to be ZIRPicorns. Following the recommendations of technology experts, the criteria have changedand half of the selection is now based on revenue metrics, rather than fundraising.
As a result, only 28 of the French Tech 120 selected in 2024 claim valuations of $1 billion or more. On the other hand, La French Tech reports that the cohort collectively had a Net income of 10 billion euros in 2023.compared to €7.5 billion in 2022. Thirty-one companies reported net income exceeding €100 million.
Together, this cohort reveals or confirms some interesting trends that France is driving, such as the rise of deep tech and artificial intelligence. But it is also worth focusing on the new winners of the Next40: if the IPO window reopens, the expectation would be that some of them will go public and reinject the long-awaited liquidity into the venture capital portfolio.
Without further ado, here is the class of 2024, summarized in one image:
That’s not the most digestible format, so let’s take a closer look newcomers.
welcome to the club
These are the companies that joined the Next40 list:
- Add gueststhe parent company of BungalowSpecials and Campings.comwhich had joined the French Tech 120 in 2023;
- ChapsVisionB2B company that positions itself as a specialist in sovereign data processing;
- Ekwateura renewable energy provider that generated a mix venture capital and crowdfunding;
- Equativea advertising technology company formerly known as Smart AdServer which was spun off from Aufeminin;
- ilekanother green energy provider;
- Malt, an independent marketplace active in France, Belgium, Germany, the Netherlands, Spain and the United Kingdom;
- sir temp’an online temporary employment agency;
- Mistral AIthe LLM open rocket that is rumored to be raising money at a $6 billion valuationthree times its valuation in December;
- Penny Lanethe expansion of accounting software that turned into a unicorn in February;
- Qair Groupone more actor in renewable energies;
- Weezeventa ticket sales platform created in 2008.
It’s impressive, in particular, to see how quickly Mistral AI joined the same list as two-decade-old Weezevent. The AI company has just celebrated its first year, but Arthur Mensch and his co-founders are now at the helm of one of the most promising companies in France, and perhaps eventually it will go public.
While that is somewhat implicit in the nickname “Next40,” which alludes to the CAC 40, it is too early to say which of them will become IPO candidates and when or where. In 2023, Euronext only welcomed 64 new listingsunder of 83 in 2022 and 212 in 2021.
Among the other 80 companies that complete the FrenchTech 120, the new additions 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 are a unicorn (yet). Then again, maybe that should never have been the North Star. In any case, it would have been a difficult goal to achieve in recent months: investment in French startups decreased significantly last year, from 13.49 billion euros in 2022 up to 8.32 billion euros. According to EY, green tech was the largest cohort with 2.7 billion euros of financingand is also well represented in the French Tech 120.
Reflecting trends
The French Tech 120 come from a variety of sectors, from fintech to space technology, but there are clear trends at play.
However, a word of caution: for the first time, applicants were asked to respect commitments in terms of gender equality and ecological transition. The latter might have given a little more weight to green tech companies, which make up 30% of the class of 2024, but that’s also roughly in line with the share of investment they attracted last year.
AI is another sector where French startups attracted mega waves, even in their initial phase. Something is happening with AI startups in France and the French government want to support this. The French Tech Next40/120 reflects this trend with the inclusion of Mistral AI, but also the pharmaceutical company AQEMIA and Quantum computing startup Pasqal.
Beyond AI, it is deep tech that appears as a heavyweight on the list, representing 23% of the 120 companies. Again, this is not a surprise: we already reported that deep tech was rising in Europe, with tailwinds coming from public funding.
The French Tech Next40/120 program also comes with advantages. There is no direct financing involved; the main benefit is the promise of less friction and fewer “unnecessary institutional obstacles.” It’s quite telling that this is considered largesse and, presumably, more companies could benefit from it. But if you want to have world champions, you have to start somewhere.
The French Tech Next40/120 has already crossed borders: 88% of companies in the new class will have a physical presence or significant commercial activity abroad in 2024.
Being selected will give them more international visibility, but it is at home where it will open doors most directly: from 2023, an initiative called “Je Choisis the French Tech” encourages public administrations and large corporations to acquire solutions from French startups. Now that markets care more about profitability, this is much more tangible than a unicorn horn.
