France’s startup scene is falling behind the US and Europe, and AI is both the cause and the cure
TL;DR
French startups raised €6.7 billion in 2025, down 5% year on year, even as the US grew 38% and Europe 12%. Mistral accounted for 25% of all capital raised. AI drove 43% of funding, defence tech surged 148%, and exits hit a five-year low at €5.3 billion.
A new report on the French tech ecosystem by Alexandre Dewez, a partner at venture firm 20VC, paints a picture of a startup scene that is growing more dependent on a handful of AI companies while the rest of the market stalls. French startups raised €6.7 billion across 411 funding rounds in 2025, a 5% decline in capital and a 21% drop in deal volume compared with the previous year. The numbers stand in sharp contrast to the US, where startup funding grew 38% year on year, and Europe as a whole, which saw a 12% increase.
The report, based on roughly...
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