VC Investment in French Startups Doubles in 2021 to Hit $11.3B Despite Funding Gap Between Regions

France, startups, venture capital, investment, business

Recent data from Dealroom, supported by France’s startup movement La French Tech, has revealed that the combined enterprise value of French startups founded since 2000 was €179 billion in 2021 — up 17.7x since 2010.

With 31 homegrown unicorns — firms with a valuation of over $1 billion — France has also now surpassed Sweden and the Netherlands (24 each) for the number of unicorns created, coming only second to Germany (53).

According to the report, venture capital (VC) investment in French startups doubled in the past year alone, from €5.1 billion ($5.8 billion) to over €10 billion ($11.3 billion) in 2021.

Related: Soccer NTF Trading Platform Sorare Nets $680M

The top three VC funding rounds this year were the $680 million Series B raised by soccer non-fungible token (NTF) trading platform Sorare, the $555 million Series E by Software-as-a-service (SaaS) firm Mirakl and a $400 million Series D by French neobank Qonto.

Overall, 2021 was a record year for megarounds — fundraising of at least $200 million — in France, with 11 out of the 15 rounds since 2016 taking place this year alone.

See also: SaaS Firm Mirakl Nets $555M to Expand eCommerce Offerings

Commenting on the achievement, Clara Chappaz, director of La French Tech, said the country is “finally attracting the means to match its ambitions,” with foreign investors at the source of the most of those funds.

According to the data, 60% of funds raised by French startups year-to-date have come from abroad, with American (31.2%), European (19%) and Asian (3.3%) investors topping the list of non-domestic investors this year.

However, Chappazz said there is a significant gap between Paris and other parts of the country when it comes to funding, with other regions attracting only 50% of investments despite housing over 70% of new startups.

That said, success stories like Montpellierʼs Swile reaching unicorn status this year and Rennesʼ Leocare raising €100 million show that other regions are starting to attract investors’ attention.

Read more: French Super App Lydia Raises $100M, Valued at $1B

Another major success story to come out of France this year is mobile financial services platform Lydia reaching unicorn status earlier this month after raising $100 million in a Series C round.

Founded in 2013, Lydia began as a peer-to-peer (P2P) payments app like Venmo and has since grown to become the second-most downloaded FinTech app in France, giving 5.5 million customers access to other offerings such as loans, savings accounts and, more recently, cryptocurrency trading.

Like China’s WeChat and the U.K.’s Revolut, Lydia has set its eyes set on becoming a financial “superapp” for millennials and Gen Z customers, while targeting 10 million European customers by 2025.

See also: Lydia App Users Can Now Trade Crypto Assets on Bitpanda

“The superapp is really the future of banking services as we know them,” Lydia co-founder and CEO Cyril Chiche recently told Sifted. “The bank app has gained some improvement, but they haven’t really changed over the last few decades. Apps should really hide all the complexity [of banking]. It should be an interface as close to the actual intention.”

With French President Emmanuel Macron determined to make France “a startup nation,” 2022 could be an even bigger year for the country’s startup ecosystem.

The government-backed initiative La French Tech already brings together over 21,774 startups and a 100-plus network of entrepreneurial communities around the globe, targeted at propelling French businesses forward both locally and internationally.

France is also home to popular startup incubator Station F, which is considered to be the world’s largest startup facility.

In October, PYMNTS reported that the startup incubator has partnered with payments giant Square to help entrepreneurs access Square’s commerce and payments resources, expertise and application programming interfaces (APIs).

Related: Square Teams With French Startup Incubator STATION F, Offering Expertise, Tech