French Tech Funding Slows in July Without Mega-Rounds

Following a robust June, French startup funding experienced a significant deceleration in July, with total capital raised plummeting to €202.8 million across 25 transactions. This marks an 80% decrease from the previous month's €1.046 billion haul, underscoring the critical role of large-scale funding rounds in inflating headline figures. The absence of any mega-rounds, defined as deals exceeding €100 million, shifted the market's focus to more modest, earlier-stage investments.

The largest single transaction in July was Cyllene Therapeutics' €33 million Series C round, a stark contrast to June's three blockbuster deals that collectively accounted for €735 million. This shift highlights that July's performance reflects a return to a more typical funding cadence rather than a market downturn. While the monthly figures show a dip, the year-to-date cumulative funding for French startups stands at €4.46 billion from 240 operations. This total remains ahead of the same periods in 2025 (€2.78 billion), 2024 (€4.03 billion), and slightly surpasses 2023 (€4.42 billion), indicating underlying growth in capital deployment despite monthly fluctuations.

July's funding activity was predominantly driven by early-stage ventures. Seed and Series A rounds dominated, securing €84.6 million and €54.2 million respectively. Seventeen seed-stage deals contributed significantly to the month's volume, emphasizing a strong appetite for nascent companies. Series B rounds followed, totaling €31 million, while only one Series C round, that of Cyllene Therapeutics, was recorded. Notably, no Series D or later-stage funding rounds were completed during the month, further illustrating the concentration of activity at the initial stages of company development.

Artificial Intelligence (AI) continued to be a significant, albeit less dominant, sector in July, attracting €69.5 million across 9 deals, representing 34.27% of the total monthly capital raised. While this is a decrease in absolute terms from June's €127.4 million, AI's sustained presence underscores its ongoing importance. Year-to-date, AI startups have secured €2.201 billion, accounting for approximately 49.3% of all capital raised, demonstrating its foundational role in the French tech ecosystem. Companies like Gradium, which announced an extension of its funding with NVIDIA, exemplify the trend of investing in core AI infrastructure, including vocal models and computing power, aiming to reduce reliance on major US tech giants.

Other key sectors saw varied performance. Deeptech led the month in terms of capital raised, with 4 operations totaling €47.7 million, followed by IT at €45.7 million and Biotech at €36 million. However, these figures represent a slowdown compared to their first-half monthly averages. Deeptech, for instance, averaged around €129 million per month in the first semester, while Biotech averaged €62 million. The IT sector showed relative resilience, boosted by notable deals such as Gradium and ZML, which raised €17.5 million from investors including 20VC, AAL Management, Kima Ventures, Kindred Ventures, and Puzzle Ventures. Greentech also posted a respectable month, raising €17 million, surpassing June's performance.

The average deal size in July contracted sharply to €8.11 million, a significant drop from June's €30.77 million. This metric further reinforces the narrative of a month characterized by smaller, more numerous investments, typical of early-stage financing. The sustained year-to-date performance, however, suggests a healthy underlying trend for French innovation, with July's figures providing a more grounded perspective on the market's actual operational rhythm outside of exceptional large-scale events.