Our activity since the beginning of the year 🚀 !
After a record year for the raising of capital for French Tech in 2019, the health crisis abruptly put the dampers on the optimism that had prevailed until then. There are a number of reasons, though, for remaining positive about the health of our ecosystem!
For Bpifrance Large Venture, the first half of the year was marked by unprecedented vitality: the investments achieved in just a few months equalled those for the entire previous year. But beyond our particular case, the dynamics recorded last year are still present; in end-June, the rounds of trading above 40 million euros are marking a drop of 14% compared to last year, despite the health crisis and the already very sustained activity in 2019.
Better still, there were 7 “deals” of more than 100 million euros announced after the beginning of the year (3 of which were financed by our fund). Operations for raising capital of more than 20 million euros were slightly fewer in number (31 compared to 41 in 2019) but the level of activity is still high. In short, unlike the LBO or development capital sectors which have suffered a setback, venture capital is still in good shape: it is driven by the appeal of companies that contribute to digitizing the economy.
So while the investments we have made since the beginning of the year were all initiated before the Covid crisis, none of the operations we were working on have been abandoned. Some took longer, others were renegotiated, but all were completed. Since the end of lockdown, we have announced three excellent operations: Contentsquare, Swile and iBanFirst.
Incidentally, the investment propositions that we have been deploying since 2013 have been confirmed. At the time, Large Venture was launched to create a momentum around the raising of capital in excess of €20 million, one of the milestones of the death valley curve for venture capital. For high-growth innovative companies, this is often a period of acceleration, allowing them to consider an international thrust or product expansion. The capital raised is used to help them grow to eventually become listed on the stock market or be bought back in optimum conditions.
Indeed, in the past, it was regrettable to see many companies being bought out even though they still had significant growth potential. Others have had to revise their growth targets due to a lack of funding. Companies with insufficient maturity have also been listed too early, without always being able to deliver on the promise that was sold. If they had been more mature before they went to the stock market, they would have arrived in much better conditions…
In 2013, entrepreneurs needed long-term investors, providing structure for their capital and governance, able to support them towards the next stages of their development: IPO or industrial exit, at the right time… This is still the case today. And even more so than ever.
However, in France, rounds of 20 million euros are now commonplace, and we are more likely to see sums of upwards of a 100 million euros that will bring us on a par with the significant levels of the British and German ecosystems. The attractiveness of the country and the success of these startups will make it possible, and we are making a full contribution to this.
The role of Large Venture also implies having complementary investment offers, which balance the overall risk of our portfolio. Thus, deeptech and biotech ventures coexist alongside proven business models such as marketplace and software.
In addition, we can intervene to facilitate the external growth of our national champions by helping them finance acquisitions as part of their consolidation strategies. We are convinced that in the coming months, there will be an acceleration of these analyses, which is already becoming evident in our portfolio.
Another positive sign, to conclude, on the appeal of the country: these financing rounds are attracting growing interest from international financial players initially specialized in LBOs and Private Equity, who are drawn to the buoyant French tech ecosystem.
Covid will accentuate this trend which began in 2019: visible for a little over two years, these international players have been identifying, sector by sector, the leaders who today are taking advantage of the accelerated digitalisation of our economies. It is no coincidence to find Goldman Sachs in the round of Back Market or LumApps and BlackRock investing in Contentsquare… This is a sure sign that our startups are becoming increasingly mature and that their status as future world leaders is recognized. And this is not expected to stop anytime soon.
