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According to the 3rd French Tech Finance Partners report (FTFP)given yesterday to the Minister Delegate responsible for artificial and digital intelligence, Clara Chappaz, and that the editorial staff of Frenchweb has obtained, France now has a pool of at least 30 companies ready to go on the stock market. However, the majority of them envisage a rating in the United States. Klarna, Revolut, Contentsquare, Blablacar or Qonto could thus choose the Nasdaq or the NYSErather than Euronext Paris.
This report, led by Réza Malekzadeh, General Partner in the Partech Investment Fund and coordinated by Brice Delorme, Partner at Quadrille CapitalAlert on the deficit of institutional investors and the limits of the French stock market, which slow down the emergence of European technological champions. Between 2021 and 2023, IPO Tech in France dropped drastically: only 6 IPOs in 2023against 376 in the United States, Europe and Israel.
A European IPO market in the
Against all expectations, the valuations of European IPOs are more favorable that those of the United States, with multiple cash-on-Cash reaching 8x against 6.1x in the United States. However, the selectivity of European investors limits the number of IPOs on the stock market. Only the most mature and profitable companies can claim a rating.
“” The European market lacks depth and flexibility. Startups that reach a certain size often have any choice than to seek funding across the Atlantic », Underlines an investor quoted in the report.
One of the main brakes lies in the absence of PRE-SPO FUND AND CROSSOVER capable of supporting companies to the scholarship. Unlike the United States, where these investment vehicles are well established, France is struggling to structure a robust late-moist financing ecosystem.
A risk of leak in French unicorns
The slowdown in IPOs creates a Effect of accumulation of companies awaiting exitaccentuating pressure on venture capital investors, who must generate liquidity to finance new startups. Currently, 137 European companies totaling a valuation of 430 billion euros Are awaiting an IPO, depending on the report figures.
“” We need a more dynamic stock market and a more offensive investment culture “, Pleads a French tech leader.
The cases of Criteo and Talend illustrate the trend: these two French companies have entered the NASDAQ to benefit from better visibility and wider access to capital. Klarna and Revolut, two major European players from the Fintech, recently confirmed their intention to follow the same path.
Report recommendations
To reverse the trend, the FTFP report Formula 10 key recommendationsof which :
- Strengthen Pre -io and Crossover funds To support companies until they are rating.
- Facilitate access to stock market funding for individualsby softening the rules of PEA and life insurance.
- Create an index dedicated to growth companies To give more visibility to French IPO Tech.
- Improve the cover of Equity Research on Small & Mid Caps To attract more institutional investors.
- Strengthen the Tibi program To enclose more capital to hypercroissance startups.