A new survey by industry research group ScaleX Invest has revealed a growing wave of bankruptcies among French tech start-ups, potentially challenging President Emmanuel Macron’s vision of Paris as a premier European tech hub.
During his first term, Macron championed the rise of France’s start-up ecosystem, highlighting initiatives like Station F and securing €110 billion in investment pledges during France’s global AI summit in February. However, the latest findings indicate that economic pressures and tightening funding conditions are leading to higher insolvency rates in the sector.
Key Findings of the Survey
- 10.4% of the 1,487 tech start-ups analyzed face a high risk of bankruptcy.
- The number of bankruptcies and insolvencies now exceeds the number of new Series A funding rounds.
- Established start-ups are also struggling: The average failed company had raised €32.5 million, twice as much as in previous years, yet still couldn’t survive market conditions.
One example is Ynsect, a company specializing in insect-based ingredient production using robotics, which filed for a safeguard plan last year.
A Struggle for Funding
The declining valuations and stricter funding climate have made it increasingly difficult for even well-funded scale-ups to secure capital, said Edouard Thibaut, ScaleX Invest’s Chief Operating Officer.
This downturn in France’s tech sector coincides with broader economic concerns, including a global slowdown affecting financial markets. If the trend continues, it could undermine France’s ambitions of competing with Silicon Valley and other global tech ecosystems.
