19 Unicorns. What next?

Raphaëlle d'Ornano
5 min readJul 27, 2021

Less than 2 years ago, President Emmanuel Macron introduced a series of reforms and programs designed to address the difficulty French companies had raising late-stage funding. He finished his presentation with a challenge concerning start-ups: “I’ll leave you with a goal: there should be 25 French unicorns by 2025.”

He meant to be ambitious. It turns out he may have been far too conservative. The French Tech ecosystem has seen an exceptional first half of 2021. French start-ups have already raised more funding in the first six months of 2021 than they did in all of 2020. That includes an astonishing run of 9-figure funding rounds that saw the creation of 8 new unicorns for a total of 17, according to a report by Bpifrance published on July 9th.

But just a few days later, Spendesk raised $118 million to become the 18th unicorn. And numerous press reports have indicated that NFT collectible leader Sorare is set to close a record-setting round that will top the $500 million raised by Contentsquare just a few weeks prior. With 19 unicorns, it would be a surprise if France doesn’t hit Macron’s 2025 target before the end of 2021.

Understanding this phenomenon

It is important to recognize that the French fundraising phenomenon is part of a massive global investment wave that is pushing up valuations and setting a high bar for funding rounds. According to CB Insights, 136 new unicorns emerged globally in Q2 2021 — more than the total for all of 2020.

Even so, France is outperforming the rest. Of the main European Tech hubs, France is breeding unicorns at the fastest rate. Over the past 3 years, the number of unicorns has tripled in France vs. + 69% in the U.K. and +44% in Germany.

On the French side of the equation, this funding explosion is the fruit of a culture change within the nation’s entrepreneurs. More start-ups are embracing international ambitions from the start, with the intention of becoming global champions. They are building on France’s strong foundation in research and development and the extraordinary governmental support provided through institutions such as Bpifrance and La French Tech Mission. These programs have increased funding , particularly at the earliest stages, they have also delivered a clear message that France is betting big on entrepreneurship to reinvigorate its economy.

That message is being heard. Digging deeper into these trends, we find even more promising signs. Previously, U.S. investors coming to Europe were drawn by the opportunity to back cheaper companies than their US-based competitors. This is not the case anymore. People are investing in French Tech not because they are bargain deals, but rather because they see a lot of value in these companies. As a result, more growth capital is becoming available as large international investors, primarily from the U.S., have fewer hesitations about increasing their presence in France.

Indeed, an unprecedented wave of U.S. investors is propelling local start-ups to unicorn status. Dealroom data show that North American investors significantly increased their funding of French start-ups, accounting for 31% of VC money in France in 2020, up from 13% in 2019. This has closed the gap with the U.K. and Germany, where U.S. funding represents 40% of start-up money. That shift has drawn in players such as Boston-based Elephant VC, a major player in cybersecurity funding that spearheaded investments in French start-ups Datadome ($35 million) and Didomi ($40 million) in 2021.

What to expect next?

Kat Borlongan, who recently stepped down as director of La French Tech, noted in a tweet a few weeks ago that funding is not the “alpha and omega” of the French ecosystem. Indeed, any good founder will understand that funding rounds, even giant ones, are not the finish line but rather tools for realizing a start-up’s potential.

That said, tracking unicorns is still worthwhile. They are a KPI of the tech ecosystem that allows us to measure its maturity. A few years ago, France may not have had companies with enough maturity to benefit from the current environment. Today, we can see the country’s entrepreneurs are in a position to attract the world’s most notable investors with ideas and executions that have demonstrated their potential to be global champions.

Having come this far, however, French Tech cannot afford to coast. The longer-term goal must still be to create companies that demonstrate digital sovereignty and become job creation engines. To go from a “scale-up nation” to a nation of “large tech companies”, there are several critical steps still to be taken.

First, we should not be deceived by all these massive funding rounds. There has been tremendous progress, but France’s late-stage funding issues have not been completely solved. These shortcomings were illustrated in great detail in the Tibi Report submitted to the government in 2019. More must be done to expand late-stage funding, including supporting the creation of at least 3 late-stage funds with more than 1 billion euros under management and making startup investment a national cause. The expansion of late-stage capital has indeed slowed the flood of start-ups who, up until now, felt the need to relocate to the U.S. But more must be done.

This also includes educating nontraditional investors about the “Unicorn Economy.” Too many private equity funds and asset managers are focused on EBITDA rather than growth potential, and do not fully grasp the specific financial, operational and legal metrics of Tech companies. Along the same themes, large corporations also need to rethink the way in which they value start-ups. A conservative mindset and risk-adverse management cause companies to shy away when they meet a start-up with a big valuation. This leads to big, missed opportunities. The pandemic has motivated U.S. corporatations to aggressively reset themselves through digital offerings added via M&A. In addition, the U.S. public markets are continually renewing themselves while they stagnate in France. The average age of a CAC40 company is more than 105 years old, compared to just 15 years old on the U.S. Nasdaq.

Finally, entrepreneurs cannot lose their heads as investors chase them and pump up their egos to secure deals. Founders need to remember their business fundamentals. Ultimately, profit matters and the path to profitability should be crystal clear for entrepreneurs when receiving unicorn funding. France has not yet had unicorn failures, but lessons learned from the collapses of U.S. unicorns show that the major cause of failure after a major funding round is the transformation of these companies into bottomless cash pits that let spending run wild.

The hard truth is that some of these French unicorns will fail. That is the nature of the game. For now, it is important to do everything possible to increase their chances of success while continuing to generate even more unicorns and improve the nation’s odds of fulfilling its digital destiny.



Raphaëlle d'Ornano

Managing Partner + Founder D’Ornano + Co. A pioneer in Hybrid Growth Diligence. Paris - NY. Young Leader French American Foundation 2022. Marathon runner.