French Tech Just Collapsed... And the Government Is Hiding the Score!
About this episode
The French Tech ecosystem, once lauded by the government for its 38 unicorns, is facing a major crisis. In five years, the number of French unicorns has plummeted to 23, representing a 39% loss. Flagship companies like Sorare have seen their valuation drop from nearly 4 billion euros to approximately 240 million, while ManoMano lost 78% of its value. Even iconic figures such as Doctolib and Back Market are struggling, having lost a significant portion of their valuation. This collapse is analyzed in depth, revealing the structural and cyclical causes behind it.
An independent study by Mighty9 reveals that 123 billion euros in value have evaporated from the European unicorn ecosystem, with 11 billion euros lost in France alone. Key reasons include the period of easy money between 2020 and 2022, where zero interest rates artificially inflated valuations, as well as the fragmentation of the European market which hinders company growth and consolidation. French taxation, particularly on stock options, is also highlighted as a factor driving talent and companies to the United States. Despite billions of euros in public money injected, one-third of the funded unicorns have either lost value or left the country.
However, the picture is not entirely bleak. A new generation of more disciplined and robust unicorns is emerging. Companies like Mistral AI, valued at 11.8 billion euros in less than two years, and Exotec, whose valuation doubled to 4 billion, demonstrate that sustainable growth is possible, particularly in robotics and AI sectors. All European unicorns founded after 2023, in a context of renewed discipline and more reasonable valuations, are healthy. French Tech is undergoing a transformation, moving towards a more resilient model focused on real value creation rather than ephemeral valuations.
Top 3 insights to remember
39% of French unicorns have disappeared in 5 years
The 'growth at all costs' model hit its limits with the end of zero rates
France lacks exits (IPOs, acquisitions) compared to the US
10 key findings
France has seen its number of unicorns drop from 38 to 23 in five years, representing a 39% loss of its unicorn population.
Iconic companies have suffered massive devaluations: Sorare went from nearly 4 billion euros to approximately 240 million, and ManoMano saw its value melt by 78%, falling from over 2 billion in 2021 to less than half a billion last February.
The Mighty9 study revealed an evaporation of 123 billion euros in value within the European unicorn ecosystem, with 11 billion in France alone, and only 78 cents remaining for every euro invested by the latest investors.
60 out of 199 unicorns in Europe no longer deserve their title, having fallen below the one-billion-dollar valuation threshold.
France holds the record for flight among major European nations, with one in four French unicorns having moved to the United States, and these relocations did not protect companies from value decline.
60% of European unicorns were born between 2020 and 2022, during the period of zero interest rates and easy money, which led to valuations often disconnected from economic reality.
The fragmentation of the European market, with its multiple regulations and languages, hinders consolidation and rapid growth of unicorns, unlike the unified American market, leading Europe to produce 2.8 times more unicorns per segment than the United States.
French taxation on stock options is a major handicap, making it difficult to attract and retain top talent compared to the United States.
Despite billions of euros in public money injected (e.g., 2.5 billion for the Deeptech plan, 54 billion for France 2030), 15% of funds raised by unicorns come from public money, and one-third of these funded unicorns have lost their valuation or left the territory.
Notable successes like Mistral AI (valued at 11.8 billion euros in less than 2 years) and Exotec (valuation doubled to 4 billion) show that unicorns born after 2023, with renewed discipline and physical or deep tech products, are in much better health and more resilient.
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The analyses presented reflect MoneyRadar's past positions and do not constitute investment advice.