In 2018, we highlighted the difficulties of the venture capital ecosystem in France in our article “A Venture Capital Funnel in Europe” following an analysis of first-time fundraisers in France between 2007 and 2009: an inefficient “Spread and Pray” strategy with weak graduation rate from first to second fundraising, early exits, and the lack of new unicorns that underscored the French ecosystem’s lag compared to the U.S.
Six years later, with 30 French unicorns and over €31 billion raised, the ecosystem seems to have undergone a transformation.
Today, we revisit this analysis to chek if the change in our ecosystem is really revealed in figures.
To address this question, we studied French startups that raised funds for the first time in 2019, using data from Crunchbase (so only “official” fundraisings). Five years later, their trajectories reveal what works—and what doesn’t—in the ecosystem.
Our Cohort
In 2019, 407 French startups (officially) raised funds for the first time.
Five years later, they have generated over 700 funding rounds, highlighting key dynamics of the ecosystem:
The ecosystem demonstrates significant successes, but disparities remain strong across sectors and access to key investors.
What we found
a) Between 2007 and 2019, the French venture ecosystem has been transformed
b) Fundraising is a rollercoaster
The graph shows a stable or decrease in the frequency of fundraising rounds: 39% of startups graduate from first to second fundraising, 39% from second to third and 25% from third to fourth. At each stage, fewer and fewer startups manage to secure additional funding. It’s not because a startup reach a certain level that the job is done. It’s even the contrary!
This issue, already identified in 2018, highlights a persistent weakness in the French ecosystem: financing mature startups. While early rounds remain accessible, supporting their growth to achieve critical scale and compete internationally remains a major challenge.
c) No statistical factor determines a startup’s survival or fundraising ability
We analyzed several criteria to statistically evaluate their impact on the survival of startups and their ability to raise funds:
None of these factors demonstrated a significant correlation with the likelihood of survival or the ability to raise additional funds, regardless of the statistical models applied. This underscores a fundamental truth about venture capital: a startup’s success remains inherently unpredictable and cannot be fully explained through statistical analysis.
So for the moment venture capital can’t be reduced to a game of statistics.
What we now know
Thus, none of the factors studied directly influence the survival of French startups. The success and longevity of startups cannot be reduced to statistical models.
The increasing difficulty in raising funds, with less than 5% of the cohort securing a third round within five years, highlights a structural issue already identified in 2018 and still prevalent today: while early stages are often supported, financing growth phases remains a critical challenge for the French ecosystem. French companies might also take more time to grow due to a restrictive French & European market environment that limits early hypergrowth.