The French startup ecosystem is grappling with a significant funding downturn in 2025, mirroring global trends. French startups raised just ?.5 billion in the first half of the year—a figure that holds steady compared to the previous six months, but is markedly lower than the ?.4 billion secured in the first half of 2024, according to Dealroom data. This shrinking capital landscape has only seen three French startups crossing the €100 million mark so far this year: Loft Orbital in newspace (€170 million), Powesco in energy (€150 million), and Alice & Bob in quantum computing (€100 million).
Despite the funding slump, major venture firms are pushing ahead. Deeptech specialist Omnes closed the first €112 million of its second dedicated fund, targeting €150 million in total to support new ventures in science, health, energy, and space. Meanwhile, Otium Studio plans to double its output, shifting from five to more than ten startup launches per year, and aiming to commit €180 million by 2030. These moves indicate a concerted effort to build foundational infrastructure for the next wave of French startups, even against tough macroeconomic headwinds.
Survival, however, remains a challenge for some well-known names. Insect-farming pioneer Ÿnsect has secured court approval to operate until September as it restructures and seeks a buyer after burning through more than €400 million. On a more positive note, fintech unicorn Qonto has filed for a banking license with France’s regulator, aiming to expand its offerings to lending and savings, potentially propelling its user base toward the two-million mark by 2030. The report also spotlights industrial and space tech investments: Latitude is transforming a former pharmaceutical plant into a launch vehicle factory for its Zephyr rockets, targeting up to 50 launches a year by 2030, and ATAWEY, Skynopy, and Bonx have all raised fresh rounds to drive innovation in energy, satellite connectivity, and next-generation ERP systems.
Amid these challenges, French startups continue to find ways to adapt. Back Market, a refurbished-electronics unicorn, turned its Paris office into a summer camp for employees’ children during a heatwave, reflecting creative approaches to workplace culture and employee retention. Altogether, the sector displays both the uncertainty gripping European tech and the resilience of founders and investors intent on navigating a volatile venture capital climate.
