Berlin, Munich, Paris – March 31, 2025 – IRIS, a European Venture and Growth fund, publishes its annual study “Financing Tech in Germany and France,” comparing technology investments in both countries in 2024*. After a turbulent 2023 marked by a severe market correction in venture capital, the two economies followed opposite trajectories: Germany has seen a controlled rebound, while France is experiencing a more concerning contraction.

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In this context, artificial intelligence has emerged as the primary driver of financing in France, accounting for 35% of funds raised in 2024 with €2.48 billion invested (+35% vs. 2023). In contrast, AI in Germany attracted €1.87 billion (+21%), representing 25% of investments, and the tech is more integrated into industries such as healthcare, cybersecurity, and transportation. This contrast highlights a French ecosystem more dependent on AI, while Germany maintains a more balanced distribution of funding.

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France vs. Germany: A Wide Gap in Investment Strategies

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In 2024, Germany’s ecosystem remained particularly dynamic, with 1,476 funding rounds recorded (+26% compared to 2023), versus only 780 in France (-39%). This difference is partly due to better transparency regarding intermediate financing in Germany, which provides greater visibility into real market activity, as well as stronger involvement from large corporations and mid-sized companies, which directly finance 6% of the largest funding rounds in Germany. While corporate investors are even more present in France (13% of the largest deals), the overall market suffers from a decline in attractiveness.

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The European late-stage segment shows a moderate recovery after the sharp valuation correction of 2022-2023. However, growth funds remain highly selective, and the number of post-Series A funding rounds in France plummeted by 44% in 2024, illustrating the challenges startups face in reaching the scale-up stage. This structural deficit is reinforcing the orientation of French scale-ups towards U.S. investors, who dominate this segment. Conversely, Germany benefits from a more fluid market, where private equity funds and corporate investors ensure better funding distribution between venture and growth rounds, facilitating the transition to late-stage financing.

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“2024 marks a return to fundamentals: a more selective market, adjusted valuations, and a premium on technological excellence. The French ecosystem is suffering from a sharp decline in early-stage and growth funding outside of AI, which remains a safe haven in a challenging market. Meanwhile, Germany is capitalizing on a more diversified investment structure,” analyzes Julien-David Nitlech, Managing Partner at IRIS.

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Artificial Intelligence: From Funding Boom to Economic Integration Challenges

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Artificial intelligence saw a record year in terms of funding in 2024, attracting unprecedented amounts on both sides of the Rhine. In Germany, AI investments reached €1.87 billion (+21%) while in France €2.48 billion was raised (+35% vs. 2023) to fund the tech.

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As these figures highlight AI’s strategic importance, French and German approaches to integrating AI into the economy differ significantly. Unlike Germany, where AI is incorporated into various sectors and industries (security, healthcare), in France, AI remains predominantly the domain of pure players and SaaS companies.

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In France, AI captures a significant share of technology funding, with 8 of the 30 largest funding rounds (27%) directly related to AI. However:

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• Only 38% of these rounds involve companies whose core business is AI; the rest integrate AI as a technological component within an existing product.
• This trend has led to investment concentration on a few major players: Mistral AI (€468M) and Poolside AI (€454M), specializing in foundational AI models, as well as companies like Pigment (€131M), Alan (€173M), and Akur8 (€110M), which leverage AI to optimize their SaaS solutions.

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This strategy positions France strongly in advanced AI models and intelligent software solutions but remains limited in terms of direct impact on industry and the real economy.

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Germany, on the other hand, adopts a different approach, viewing AI as a tool to optimize existing industries:

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• 60% of AI-related funding rounds involve companies that use AI as an enabler rather than as their primary offering, accelerating innovation in strategic sectors such as cybersecurity, healthcare, and transportation.
• For example, Helsing (€450M) applies AI in defense for real-time analysis, while ITM Radiopharma (€188M) and Catalym (€136M) use AI in medical research. In the transportation sector, CargoBeamer (€140M) employs AI to enhance logistics efficiency.

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This approach reflects a broader integration strategy for AI within Germany’s major industries, enabling rapid and widespread adoption of the technology in established markets.

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“AI was a tremendous investment driver in France in 2024, but the challenge for 2025 will be proving its real economic value. AI is not an industry, it is a technology. As such, startups built on AI will need to demonstrate profitability, while the next wave of innovation will come from SaaS platforms making AI scalable. Thus, large French enterprises, still lagging in AI adoption outside a few generative AI use cases, will need to accelerate their transition. This shift could deeply restructure the job market and established business models. If conditions remain favorable, top-performing scale-ups will regain investor x, particularly in the Growth segment,” explains Julien-David Nitlech, Managing Partner at IRIS.

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Market Reshuffling: From Mega Rounds to Strategic Exits

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Industry trends in 2024 reveal a shift in how capital is deployed. In France, sectors like energy (-€700M) and transportation (-€500M) saw sharp drops in value, yet deal volumes remained relatively stable—pointing to the end of mega rounds like Verkor’s €850M in 2023, rather than a loss of investor interest. In Germany, security investment rose by €130M (+43%) despite deal count nearly halving, driven by Helsing’s €450M round. Enterprise software in France followed a similar logic: €600M raised across just 100 deals (vs. 133), with capital concentrating in fewer, high-value rounds. Across both markets, investors are moving away from volume, focusing instead on strategic, high-conviction bets.

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Meanwhile, Germany maintained its strong positioning in biotech and pharma, with major acquisitions like Novartis–MorphoSys (€2.7B) and Novo Nordisk–Cardior (€1.025B). This underscores the country’s ability to translate sustained investment in health into strategic exits—confirming a mature ecosystem where large-scale industrial deals remain a key outcome.

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Additionally, IPOs remained marginal in both France and Germany, confirming a continued preference for private acquisitions (M&A). 2024 largest French exits included Neoen (€5.5 billion, acquired by Brookfield) and Kyriba ($3 billion, acquired by Bridgepoint and General Atlantic), confirming private equity funds and major corporations’ crucial role in European exits.

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These trends highlight the increasing complexity of investment and exit mechanisms, where the lines between private equity, growth, and buyouts can look blurred. It is essential to differentiate between funding injected directly into companies to support growth and amounts paid to shareholders during acquisitions. Furthermore, the distinction between minority and majority investments significantly impacts companies' trajectories, as seen with HR Path, Pigment, and Akur8, where investor profiles influenced their development and strategic positioning.

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*Methodology – The study “Financing Tech in Germany and France” is based on an analysis of startup funding data in France and Germany in 2024, leveraging Dealroom databases and publicly announced funding rounds. It compares the number and volume of deals, sectoral distribution of investments, investor origins, and exit trends.