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Paris Overtakes London as Europe’s Leading Tech Ecosystem, Dealroom Finds

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Paris has officially emerged as Europe’s new tech capital, overtaking London in key metrics for the first time, according to new data from Dealroom, a platform that tracks startup and venture capital activity.

Between 2017 and 2024, the combined enterprise value of Paris-based startups grew by a remarkable 5.3x, compared to 4.2x for London. While London still attracts larger individual funding rounds, Paris’s startup ecosystem has seen greater valuation growth relative to the capital raised, suggesting a more efficient translation of investment into company value.

In 2023, French startups — including high-profile players like Mistral AI and Poolside — raised $7.8 billion, compared to London’s $11.3 billion. Despite the funding gap, Paris’s growth in enterprise value pushed it to the top spot in Dealroom’s rankings, a shift driven by more impactful fundraising and a stronger valuation trajectory.

Paris is now the only European city featured in Dealroom’s list of the top five global tech champions, a list otherwise dominated by U.S. hubs.

🔍 Europe’s Tech Struggles

The Dealroom announcement comes alongside a sobering report from McKinsey, which highlights Europe’s broader tech stagnation. While the global market capitalization of tech, media, and telecom firms rose from $7 trillion in 2000 to $34 trillion in 2023, Europe’s share fell from 30% to just 7%. Had the region retained its former share, it could have generated $8 trillion more in market value.

🚀 Paris on the Global Stage

The news comes ahead of VivaTech 2024, one of the world’s largest tech conferences, set to take place in Paris next month. The event will host leaders from global tech giants like Nvidia, Alibaba, Meta, OpenAI, Anthropic, and Cohere. Last year’s edition attracted over 165,000 attendees, solidifying Paris’s status as a major global innovation hub.

François Bitouzet, VivaTech’s managing director, emphasized the city’s momentum:

“It’s not just about the competitiveness of Paris on the AI scene today, it’s also about what will happen next and how we can keep on attracting the talent, investment, and the tech activities.”

🇫🇷 Macron’s Vision Paying Off?

Since 2017, French President Emmanuel Macron has championed tech as a national priority, pushing for leadership in AI and deep tech. His administration has encouraged foreign investment, supported ambitious startups, and launched initiatives like Station F, the world’s largest startup incubator.

Paris’s recent rise appears to validate that strategy — and offers a rare beacon of tech success in a European ecosystem otherwise struggling to keep pace with its U.S. and Asian rivals.

London Landlords Selling Properties at Record Rates Ahead of Anticipated Tax Hikes

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London landlords are selling their buy-to-let properties at unprecedented rates in response to anticipated tax hikes from the U.K.’s Labour government, with almost one-third (29%) of homes currently for sale in the capital having previously been rented out, according to new data. This mirrors a nationwide trend, with 18% of U.K. listings being former rental properties, up from a previous five-year average of 14%. While there’s no definitive indication of a “mass exodus” of landlords, the appeal of buy-to-let investments has notably declined. The expected October 30th Autumn Statement by Finance Minister Rachel Reeves, which may include an increase in Capital Gains Tax (CGT), is seen as a key factor driving this uptick in sales. Currently, landlords pay a flat CGT rate of 18% or 28%, depending on their income tax bracket, but speculated changes could bring these rates in line with income tax levels, raising concerns among property investors. These changes follow years of declining profitability in the buy-to-let sector, exacerbated by the removal of tax incentives, higher interest rates, and cost-of-living pressures. The stock of investment properties and second homes has fallen by 8.7% over the past three years, reflecting a broader downturn in the property market, though recent easing of borrowing costs has sparked a rise in homebuyer activity. Experts warn that further pressure on landlords could worsen the existing supply and demand imbalance in the rental market, pushing up rents and reducing affordability for tenants. While London-based estate agents fear the impact of higher taxes on landlords, some analysts remain cautious, noting that the real estate market may not recover evenly across all sectors, and tenants could ultimately bear the brunt of the changes.