Perhaps this is emblematic of the global venture market, but in France, the funding of startups “collapsed” during the month of May.
According to a report in JDN, just €199 million was committed to tech startups in May – the lowest number since March 2020. This represents a mere 28 deals according to the write-up.
The author posits that perhaps the cratering ot funding was impacted in part due to the number of long weekends that occurred in May, as there may be a hesitance to announce deals when people are focused on other things.
For the month, Medtech was the top-funded sector, raising €67.5 million for five deals, followed by retail for a single deal at €38 million and cybersecurity with two deals totalling €17.9 million. The once-hot Fintech sector was barely visible.
The EU, and France in particular, are hoping to encourage more investment in the private securities sector and thus shouldering more risk. One way to boost interest in early-stage investing is to provide tax exemptions, similar to the UK, to mitigate some of the perceived risk – yet we are not aware of any policy discussions reviewing the impact of taxes on early-stage investing.