After raising record amounts of venture capital funding in 2021, French startups have had a strong start to 2022, securing even more capital than their German neighbors.

While the country's VC market grew at a slower pace in 2021 than other major European economies for the first time in a few years, since the start of 2022, VC investors have poured €2.6 billion (about $3 billion) into France across 72 deals, according to PitchBook data. Its two main rivals, the UK and Germany, have reported €3.8 billion and €1.8 billion, respectively.

Where France is really winning is unicorn count—defined here as VC-backed companies worth more than €1 billion—with five new startups achieving the coveted status in January alone.

Payroll software developer PayFit became the first European unicorn of the year with a €254 million General Atlantic-led Series E, valuing it at €1.82 billion. Challenger bank Qonto reached a €4.4 billion valuation courtesy of a €486 million Series D spearheaded by Tiger Global and TCV. Other new entrants include ecommerce startup Ankorstore, fintech company Spendesk and warehouse robotics builder Exotec.

Accelerated tech adoption, bigger deal sizes and increased participation from foreign and nontraditional investors have boosted VC ecosystems across Europe, but France has the added benefit of an extremely supportive government which is continuously ramping up efforts to make the country Europe's leading VC hub.

Since taking office in 2017, President Emmanuel Macron has introduced several measures aiming to make France more attractive to startups and investors, including stock option reforms and expedited tech visas. In October, Macron pledged to invest €6 billion in France's tech sector in addition to €3 billion worth of equity investments via state-owned bank Bpifrance, as part of his €30 billion investment plan, "France 2030."

Featured image by Simon Jakubowski/Getty Images

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