By all accounts, 2020 is one of the darkest years in the annals of business. For all businesses, really? The startup ecosystem continued to grow in 2020, with more than 5.4 billion euros raised, a figure up 7% on 2019, or more than 400 million euros, according to EY.

This is an all-time high, since the emergence of these innovative companies. By way of comparison, the amount of funds raised rose by 39% between 2018 and 2019, and by 41% the previous year.

Compared to its European competitors, France is the2nd most dynamic country for startup financing. In the UK, the undisputed leader, startups raised 12.7 billion euros. The Hexagon is narrowly followed by Germany,3rd in the ranking, with 5.2 billion euros raised.

Even so, this is a remarkable performance, given the depressed economic climate and the many difficulties faced by French companies.

5.4 billion euros: a record for French startups!

The Frenchstart-up ecosystem is in good health, and showing a remarkable resilience in the face of the economic crisis that is shaking the entire country. The last few years have been largely responsible for helping these players take off and become nuggets on the international business scene.

EY took the pulse of France's 500 biggest startups.

Of the 343 who took part in the survey, half implemented short-time working measures during containment, and over 80% benefited from an EMP.

This year, the proportion of sales generated outside France rose by 20%. This is a very positive sign for French startups, as they seek to extend their hegemony beyond the (sometimes narrow) borders of France.

Significant growth in sales rounds

The year 2020 is marked by a new phenomenon: a significant increase in financing rounds. With 736 fund-raising deals in 2019, compared with 620 in 2020, the average amount of a financing round is €8.7 million.

Venture capital, growth capital and LBO funds dedicated to startups are developing and structuring, and the late-stage lock is gradually disappearing. The number of financing rounds in excess of €50 million is rising sharply, with 21 deals compared with 16 in 2019.

Ultimately, the aim is to build a mature economic environment on a par with that of the UK.

The record for the largest fundraising in 2020 goes to Voodoo, with 400 million euros raised from the Chinese group Tencent.

Sectors with the wind in their sails

Among the sectors most popular with investors, software and IT services topped the ranking. They alone accounted for 50% of funds raised in value terms (i.e. 2.7 billion euros).

Next in line are life sciences companies (€851 million raised), and fintechs (financial and payment services, with €622 million raised).

France's most dynamic regions for startup financing

Not all regions of France play on equal terms in the world of startups. Unsurprisingly, Île-de-France is the best performer, accounting for 75% of amounts raised and 57% of deals. The Auvergne Rhône Alpes and Hauts-de-France regions come in2nd and3rd. 

To ensure the long-term future of French startups, the French government has decided to dedicate a number of support measures to help them weather the economic crisis linked to Covid-19. An 80 million euro envelope, financed by the Programme d'Investissements d'Avenir (PIA) and managed by BPI France, has been released to finance bridges between two rounds of financing.

As a result, specific EMPs of up to twice the French payroll in 2019 or 25% of annual sales have been set up.

These unprecedented support measures should bolster their resilience in a number of sectors tormented by the health crisis.