VC/M&A Tech Trends

France 2022
© 2023 Avolta // www.avoltapartners.com VC/M&A Tech Trends - France 2022
This cover was generated by an AI
Introduction
Startup Struggles: Tech Sector Hits Rough Patch in 2022 €13.7bn raised by French startups in 2022, a 11% growth from 2021
Fundraising amount (€m) Deal count (#)
After an exceptional 2021, when money was virtually free, startups around the
world have experienced a brutal year in 2022.

As inflation started to ramp up and central banks increased rates, the BVP
Nasdaq Emerging Cloud Index, which tracks public tech valuations in the US,
saw a 50% drop in one year, bringing valuations back to pre-Covid levels. This
drop in public tech valuations had a knock-on effect on private tech valuations
with €500bn in total funding in 2022 (a 33% decrease from the previous year)
and just €73bn in Q4-22 (a 65% decrease from Q4-21).

France, however, has managed to weather the storm somewhat, possibly due
to the support of the BPI (the French State Bank), which has invested massively
in the French Tech ecosystem for the last ten years. As a result, France saw an
all-time high in total funding for 2022, reaching almost €14bn, though the €2bn
total raised in Q4-22 suggests that the trend is now much lower.
Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sept. Oct. Nov. Dec.
French Tech exits also returned to their long-lasting trend of €5bn in total
annual deal value with no real outlier apart from Deezer, which lost 50% of its
€4.8bn total exit value for French Tech in 2022 vs. €10.4bn in 2021
value from its initial quotation at €1bn six months ago. Exit value (€m) Deal count (#)

As we look towards 2023, the question on everyone’s mind is: what’s next?

Public tech valuations appear to be stabilizing in H2-22, with the BVP Nasdaq
Emerging Cloud Index only dropping by 5%. In addition, as inflation and interest
rate increases show signs of stabilization at the end of the year - the US
consumer price index (CPI) rose only 0.1% from October to November – some
VC investors and acquirors may anticipate an upturn in the economy in H2-23.

Arthur Porré, Founding Partner - Jan. 3rd, 2023

Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sept. Oct. Nov. Dec.

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VC trends

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VC trends
France back in second place in Europe with 19% of total fundraising amount

Total fundraising amount in Europe (€bn) Total no. of European unicorns (#)

120 160
€70bn +19
Total fundraising in New unicorns
Europe (2022) (2022)
140
100
The UK still trusts European mega rounds
120
Mega rounds > €100m (#)
80
100
2022

60 80
2021

60 2020

40
2019
40

2018
20
20
2017

0 20 40 60 80
0 0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 UK Germany France
France Germany UK Rest of Europe

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VC trends
All-time high in 2022 for French Tech with nearly €14bn total fundraising amount

Total fundraising amount in France (€bn) Deal count (#)

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VC trends
Despite an overall good year, Q4-22 shows a sharp decrease with only €1.8bn in total fundraising

Fourth consecutive decreasing quarter in terms of fundraising amount in France Top 5 funding rounds of 2022

Total fundraising amount (€m) Deal count (#)

1. €500m
led by Eurazeo

2. €500m
led by CVC Capital Partners

Q2-18 Q4-18 Q2-19 Q4-19 Q2-20 Q4-20 Q2-21 Q4-21 Q2-22 Q4-22
3. €486m
Top 3 Top 10 Others led by Tiger Global Management

Average deal value is much lower than the last 3 quarters

Average deal value (€m)

4. €450m
led by Sprints Capital

5. €400m
led by Sith Street Partners
Q2-18 Q4-18 Q2-19 Q4-19 Q2-20 Q4-20 Q2-21 Q4-21 Q2-22 Q4-22

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VC trends
From less than €1bn in 2014 to almost €14bn in 2022

An all-time high year in terms of investments… …while number of deals stay in line with last year

Cumulated deal value (€m) Cumulated deal count (#)

16 000 1 200

14 000
1 000

12 000

800
10 000

8 000 600

6 000
400

4 000

200
2 000

0 0
1 2
Jan. Feb. 3
Mar. 4
Apr. 5
May 6
Jun. 7
Jul. 8
Aug. 9
Sept. 10 11
Oct. Nov. 12
Dec. 1Jan. 2 3
Feb. Mar. 4
Apr. 5
May 6
Jun. 7
Jul. 8
Aug. 9
Sept. 10 Nov.
Oct. 11 Dec.
12

2022 2021 2020 2019 2018 2017 2016 2015 2014

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VC trends
France is home to 31 unicor ns as of Dec-22 and welcomed 8 newcomers in 2022

5,8
8
(1)
5,4
5,1

4,4

(1)

3,7 3,7

3,0
2,7 2,7

(1)
1,9 1,8 1,8 (1)
1,8 1,8 1,8 1,7 1,7 1,7
1,5
1,3 1,2 (1)
1,2 1,1 1,1
1,0 1,0 1,0
(1)

1,0 1,0 1,0 1,0

Last round valuation (€bn)

Unicorn status reached before 2022 Unicorn status reached in 2022 Unicorn that raised a new round in 2022

1Headquarters in the U.S

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VC trends
Avolta Next 20: who will be France’s next unicor ns?

Oct. 20 – Series C Apr. 22 – Growth Equity Jan. 22 – Series C Oct. 21 – Series C Jun. 22 – Series B
€315m €220m €172m €172m €160m

Mar. 22 – Series C Sep. 20 – Series C Jun. 22 – Series C+ Jul. 22 – Series C+ Mar. 22 – Series D
€150m €140m €133m €130m €122m

Feb. 22 – Series C Jan. 22 – Series B Apr. 21 – Series C Nov. 21 – Series B May 21 – Series B
€115m €107m €100m €98m €82m

Apr. 22 – Series B Sep. 22 – Series C May 21 – Series C+ Sep. 22 – Series C+ Feb. 22 – Series B
€66m €65m €60m €50m €47m

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VC trends
Seed & Series A represent 90% of the total number of transactions

Distribution of deals (%) Median amount (€m)

…

Q2-18 Q4-18 Q2-19 Q4-19 Q2-20 Q4-20 Q2-21 Q4-21 Q2-22 Q4-22 Q2-18 Q4-18 Q2-19 Q4-19 Q2-20 Q4-20 Q2-21 Q4-21 Q2-22 Q4-22

Seed Series A Series B Series C Series D+

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VC trends
Subscription-based business models slightly less represented in Q3 and Q4 2022

Distribution of deals (%)

Others

Research

Service

E-commerce

Manufacturing

Commission

Subscription

Q2-18 Q4-18 Q2-19 Q4-19 Q2-20 Q4-20 Q2-21 Q4-21 Q2-22 Q4-22

*Note: « Others » category includes Performance, Retail, and Audience business models

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VC trends
293 active investors on the market in France in Q4-22, back to the early 2021 trend

Top 10 active VCs in 2022

# of active investors (excl. business angels)

600 1. 113 deals

2. 54 deals
500

3. 24 deals

400
4. 17 deals

300 5. 15 deals

6. 14 deals
200

7. 14 deals

100
8. 14 deals

9. 13 deals
-
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Q2-18
Q3-18
Q4-18
Q1-19
Q2-19
Q3-19
Q4-19
Q1-20
Q2-20
Q3-20
Q4-20
Q1-21
Q2-21
Q3-21
Q4-21
Q1-22
Q2-22
Q3-22
Q4-22
10. 12 deals
Active investors Foreign active investors

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VC trends
French VCs had an excellent year with €3.6bn raised in new funds
They raised less than in 2021 but still 2x more than previous years Top 5 new VC funds raised in 2022

Funds raised by French VCs (€bn)

7 €350m
1. Raised in May 2022
6,2

€350m
2. Raised in Jul. 2022
5

4
3,6
€250m
3. Raised in Jun. 2022
3

2,1
2 4. €220m
1,7
1,5
Raised in Jul. 2022

1,1 1,1
0,9
1

0,4
0,3 0,2 0,3 €200m
5. Raised in Sep. 2022
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

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VC trends
Sharp decrease in the UK and US investments in French Tech in Q4-22

35%

30%

25%

20%

15%

10%

5%

0%
Q1-14

Q2-14

Q3-14

Q4-14

Q1-15

Q2-15

Q3-15

Q4-15

Q1-16

Q2-16

Q3-16

Q4-16

Q1-17

Q2-17

Q3-17

Q4-17

Q1-18

Q2-18

Q3-18

Q4-18

Q1-19

Q2-19

Q3-19

Q4-19

Q1-20

Q2-20

Q3-20

Q4-20

Q1-21

Q2-21

Q3-21

Q4-21

Q1-22

Q2-22

Q3-22

Q4-22
Note: This graph depicts the % of deals in which at least one investor of a specific country/region is participating
1
% of deals with at least one foreign investor

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VC trends
Impact 1 has been a key driver in 2022 with around 25% of total investments in French Tech

Total fundraising amount (€m) Deal count (#) Top 5 impact funding rounds in 2022

4 000 140 €500m

1. Led by Eurazeo

3 500 €500m
120 2. Led by CVC

€450m
3 000 3. Led by Sprints Capital
100

€330m
2 500 4. Led by Rgreen Invest

80
5. €250m
Led by Qatar Invest. Authority
2 000

60
Top 5 new VC impact funds raised in 2022
1 500
€250m
1. Raised in Jun. 2022
40
1 000
€100m
2. Raised in Oct. 2022

20
500
€100m
3. Raised in Mar. 2022

- - €80m
2014 2015 2016 2017 2018 2019 2020 2021 2022 4. Raised in Jan. 2022

Other Health Food Software Energy

5. €65m
Raised in Apr. 2022
1Companies addressing one or more of the UN Sustainable Development Goals (SDGs)

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Tech exit trends

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 Tech exit trends
French Tech exits returned to their long-lasting trend of €5bn in total annual deal value

Total exit value (€bn) Deal count (#)

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Tech exit trends
Tech exit activity collapsed in Q4-22 with only 40 deals for €0.6bn in total deal value

Tech exit value and number of deals declines compared to last quarter Top 5 tech exit deals in 2022

Total exit value (€m) Deal count(#)

1. €1,000m
IPO Euronext Paris

2. €410m
by Groupe Gorgé

Q2-17 Q4-17 Q2-18 Q4-18 Q2-19 Q4-19 Q2-20 Q4-20 Q2-21 Q4-21 Q2-22 Q4-22 3. €378m
Top 1 Top 3 Others
IPO Euronext Paris
Median exit deal value at an all-time low

Median deal value (€m)

4. €360m
by Swile

5. €359m
IPO Euronext Paris
Q2-17 Q4-17 Q2-18 Q4-18 Q2-19 Q4-19 Q2-20 Q4-20 Q2-21 Q4-21 Q2-22 Q4-22

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Tech exit trends
VC-funded startups represent only 33% of Tech exits in 2022

Top 10 VCs by no. of exits in 2022

€4.0m 9y vs. 11y
Median funding amount at exit Avg. age of funded companies vs. bootstrapped
companies at exit
1. 29 exits

100%
2. 12 exits
90%
3. 7 exits
80%

70% 4. 6 exits

60% 5 6 exits
50%

6. 5 exits
40%

30% 7. 4 exits

20%
8. 3 exits
10%
9. 3 exits
0%
2017 2018 2019 2020 2021 2022
10. 2 exits
VC-funded Bootstrapped

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Tech exit trends
Scale-ups and Private Equity firms are getting increasingly active acquirors for French Tech

Distribution of deals per acquiror type (%) Top 10 Tech acquirors of French startups
in 2022
100%

1. 6 acquisitions
90%

80% 2. 4 acquisitions

70% 3. 3 acquisitions

60%
4. 2 acquisitions

50%
5. 2 acquisitions
40%

6. 1 acquisition
30%

7. 1 acquisition
20%

8. 1 acquisition
10%

0%
9. 1 acquisition
2017 2018 2019 2020 2021 2022

Acquisition by a corporate Acquisition by a scale-up Private Equity IPO 10. 1 acquisition

IPO

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Tech exit trends
Again, a quite disappointing year for French Tech in terms of total exit value

A low cumulative deal value in 2022… …with the same number of deals as 2021
Cumulated deal value (€m) Cumulated deal count (#)

2022 2021 2020 2019 2018 2017

12 000 400

350
10 000

300

8 000
250

6 000 200

150
4 000

100

2 000
50

0 0
Jan.
1 Feb.
2 Mar.
3 Apr.
4 May
5 Jun.
6 Jul.
7 Aug.
8 Sept.
9 Oct.
10 Nov.
11 Dec.
12 1 Jan.2 Feb.3 Mar. 4 Apr. 5May 6Jun. 7Jul. Aug.
8 Sept.
9 Oct.
10 Nov.
11 Dec.
12

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Tech exit trends
For the first time since 2017, French acquirers represent more than 50%of deals both in numbers and in value

In 2022, acquirors were mostly French... …representing major share of deal value

Distribution by no. of deals Distribution by total exit value

2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022

France Europe North America Asia Rest of the World

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Tech exit trends
Avolta’s Public French Tech Index
Public French Tech companies show slightly higher performance than CAC Small IPO characteristics & breakdown

Index value

250

€72.4m
median EV at IPO
200

11.8%
150 +16.7% of companies show positive
returns since IPO
5.9%
100
Health
13%
Energy

7% Robotics

50 Telecom
5%
50% Transportation
+198.9% for the B.V.P. Nasdaq Emerging 5%
Cloud Index (U.S) over the same period Gaming
3%
2% Marketing
0 2%
Other
Oct-17

Oct-18

Oct-19

Oct-20

Oct-21

Oct-22
Jun-17

Jun-18

Jun-19

Jun-20

Jun-21

Jun-22
Apr-17

Apr-18

Apr-19

Apr-20

Apr-21

Apr-22
Dec-16

Aug-17

Dec-17

Aug-18

Dec-18

Aug-19

Dec-19

Aug-20

Dec-20

Aug-21

Dec-21

Aug-22

Dec-22
Feb-17

Feb-18

Feb-19

Feb-20

Feb-21

Feb-22
13%

Tech index CAC Small

1Index represents returns of an equally-weighted portfolio of all tech IPOs since Jan. 2017

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Methodology
Data, Data, Data.

Building a platform for tech corporate finance

We chose from the beginning in 2012 to be pan-European and data-driven. So, we

! Corporate: the acquiror is a corporate
built Avolta.io, a unique platform to automate processes and scale our ability to help
fast-growing tech companies in Europe. ! PE fund: the acquiror is a private equity fund (non-leveraged, LBO,
Exit types
MBO, OBO)
Our platform concatenates European deals in the tech Industry with information on ! IPO: Initial Public Offering though financial markets
valuation, revenues and structuration. We source this private data from our network
of providers, business partners and investors, combining it with unique insights from
our team of analysts.

! Subscription: SaaS or more traditional licensing revenue

Enterprise Value (EV)
! Commission: platform debiting a defined take rate from its flows
Calculated as Equity Value + Net Debt when legal information is found. Otherwise,
estimated EV from several sources: dealroom.co, Mergermarket, Pitchbook, Bureau ! Manufacturing: production and resale of goods
Van Dijk, Crunchbase, CFNews, Avolta’s private networks and public media. ! Performance: built around usage from a recurring user community
Business
! eCommerce: buy and online resale of goods
Models
! Retail: resale of goods through brick-and-mortar shops
! Audience: traffic-based revenue
! Service: margin between labor cost and service invoice price
! Research: strong R&D focus to keep high barriers to entry

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About Avolta
Leading tech M&A and fundraising advisor in Europe on €10-300m deals

! #1 tech advisor in 2021 in France

! 100 deals for €2bn+ completed in 10 years

! All types of transactions (€10-300m deals)

! M&A & LBO: 50% of our deals
! Fundraising (Series A/B/C+) : 50% of our deals

! 60% cross-border deals

! 100% Tech companies, with major focus on:

! Fintech
! Sustainability
! Deeptech
! Software
! Digital Services
! Gaming
! Web 3.0

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Research team
Contact us

Arthur Porré Pascal Farrugia Alexandre Meiers Olivier Saint-Marc

Founding Partner Partner Associate Senior Analyst

Maxime Grislain Christina Fritz Emeric Lampe Briac Gisserot

Senior Analyst Analyst Analyst Analyst

Disclaimer Avolta

The information contained in this document has been produced by Avolta, based on market & With 100 deals executed for €2bn in total over the last 10 years, Avolta is one of the most active Tech M&A
legal data and third party information. While Avolta has made every effort to ensure the advisors in Europe. Based on this expertise, Avolta’s team of 20 people has maximised the value of each
reliability of the data included in this document, Avolta cannot guarantee the accuracy of the and every deal in terms of valuations and overall conditions – this due to its time-tested sectorial
information collected and presented. Therefore, Avolta cannot accept responsibility for any methodology and expert negotiating skills
decision made or action taken based upon this document or the information provided herein.
This presentation is for the exclusive use of the people to whom it is addressed and is Dedicated team
intended for general information purposes only. It is not intended to constitute legal or other
professional advice and should not be treated as such. Arthur Porré Pascal Farrugia
Appropriate legal advice must be sought before making any decision, taking any action or Managing Partner Partner
refraining from taking any action in reliance on the information contained in this presentation. arthur@avoltapartners.com pascal@avoltapartners.com
does not assume any responsibility for any person’s reliance upon the information contained
herein. Alexandre Meiers Olivier Saint-Marc
Associate Senior Analyst
© Copyright Avolta 2023 alexandre.meiers@avoltapartners.com olivier.saintmarc@avoltapartners.com

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