The situation has changed profoundly for startups in France. The constant flow of funding dried up. Therefore, young shoots (and those not so young) must find other solutions for development.
But according to the Banque de France report on the financial state of startups in 2023, they are doing well. So despite a 38% contraction in fundraising value, they continue to show growth.
Very strong differences between startups
Of the more than 2,000 startups reviewed during the period, revenue remained on an upward trend of 19% on average. Startups also continued to hire, with their workforce growing by 8%.
In 2023, the companies concerned registered a turnover of 24.6 billion euros, or an average of 10.5 million. However, among them, 25% achieve a turnover of less than 1.5 million euros. The average value is 3.5 million euros.
Why is there such a difference between the median and the mean? Because among the more than 2,200 startups analyzed, 23 reached an average turnover of 239 million euros. Unicorns obviously make a difference.
52% were exported for 5.8 billion euros
What sets startups apart from other companies is their ability to export. 52% of them generate part of their turnover from exports. Thus, 23.6% of the turnover is generated through exports for a total of 5.8 billion euros.
Funding is not the only disruptive parameter in the startup world. Their areas of specialization are also changing. Thus, energy and the environment attract more and more people.
This sector represents a cumulative turnover of €4 billion in 2023 compared to €3.2 billion in 2022 (+27%). The sector also saw “the strongest growth in terms of workforce (+18%) and recorded the most fundraising by number and amount,” notes the Bank of France.
Energy is up, e-commerce is back to normal
E-commerce and marketplaces “form an established technology sector.” The startup companies in the market are worth close to 3.5 billion euros. But after several years considered exceptional since the pandemic, 2023 marks back to normal.
Thus, their turnover increased by 13% compared to 23% a year earlier. The same is true for the labor force, with growth of 2% when it jumps 24% in 2022. This slowdown is offset by the dynamics of other sectors, including software and data.
Growing by 18%, it owes its development mainly to data management, cyber security and predictive AI solutions.
As for the generative AI effect, it “mainly materialises in fundraising, with which France excels on a European scale.”