[NUMBERS] Tech investments in France fell by half in the third quarter of 2019

by bold-lichterman

Are the debacle of WeWork and the first operational losses recorded in 14 years by its main investor SoftBank in the third quarter starting to calm the enthusiasm on the side of French Tech?

In parallel with Uber’s chaotic IPO and the WeWork carnage, the total amount of technology investment in France fell by more than half in the third quarter of 2019 compared to the second quarter, according to data from CB Insights. Over the same period, the number of financings fell by 20%. A trend, also marked by possible seasonal effects, which contrasts with a second quarter during which the amount of investments and the number of financings had sharply increased. From July to September, only one funding, that of JobTeaser, exceeded 50 million dollars.

Credit: CB Insights.

France falls to third place among European countries where technology companies are the best financed, behind the United Kingdom (4 billion dollars of investments, of which 550 million during the series C of the Babylon startup) and Germany (almost $ 2 billion). The two previous quarters, France was ahead of Germany.

Credit: CB Insights.

However, this should be qualified with the new record reached by French Tech over the first three quarters of 2019: 3.4 billion dollars in investments and 4.6 billion estimated over the whole year (3.9 billion dollars in 2018, i.e. + $ 500 million). This record was above all achieved thanks to around ten financings of more than 50 million dollars, among which the fundraising of Meero, Doctolib, Ynsect, ManoMano, Algolia, Wynd, Payfit, Mirakl, Shift Technology, ContentSquare, Ubitransport, Akeneo, Alan, JobTeaser or Spendesk. The number of financings is expected to drop slightly from 745 in 2018 to 738 in 2019, forecasts CB Insights.

Credit: CB Insights.

After a decline in the second quarter, the number of investments in early stage (priming rounds and series A) rose 12% from July to September. Investors are also putting more money into startups early stage: $ 2 million in total in the third quarter, compared to $ 1.3 million in the second quarter (down $ 400,000 from the first quarter). To see in the fourth quarter of 2019 if the WeWork carnage will strengthen investments in mid stage or late stage, just like the nature of the sectors targeted (will BtoB SaaS, more stable, be strengthened? BtoC, more unstable, weakened?): the software sector has grown by 12 to 15%, the web has down 3%, mobile grew 2%.

From January to September, if the investments mid stage and late stage were less numerous, they represented more than half of the total amount of investments: series B, C, D and E account for 1.9 billion dollars invested in French Tech.

It should also be noted that corporate venture capital fund financing fell by 4% in the third quarter of 2019. The largest investment in this context over the period was made by Salesforce Ventures in Akeneo, in September.

Credit: CB Insights.

Bpifrance remains the most active investor between July and September. Kima Ventures is the leading private investor, ahead of Crédit Agricole, Idinvest, LBO France, PBA, Odyssee, Breega, Serena, Go Capital and Investessor.