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French political and economic uncertainties have led to a marked slowdown in the financing and development of startups, with a decline in venture capital and public initiatives such as “France 2030”. In response, entrepreneurs are adopting more cautious growth plans and scaling back their hiring ambitions. However, startups that are already profitable or operating in strategic sectors continue to raise funds. As in previous crises, companies capable of creating value and generating strong revenues will ultimately come out ahead.
Formulating a development path translated into a budget and projected financial statements is already an art form for any startup or SME. At the scale of a country like France, it now seems almost heroic, given how wide the divergences have become among the nation’s representatives.
If a board of directors behaved in such a way, shareholders would promptly replace it to break the deadlock. But running a country is far more complex than managing a company, and building a broad social, political, and economic consensus requires even more tact than dealing with dissenting board members.
Recent political events and the resulting economic climate have led to a slowdown and heightened uncertainty for the 16,200 French startups listed in the latest France Digitale / EY barometer. This sluggishness is evident, despite the continued priority given to entrepreneurship and innovation by successive governments through a range of Bpifrance programs and tax incentives.
Venture Capital and Innovation Funding in Decline
Venture capital investment in French startups fell by 47% in the first half of 2025 compared to the previous year, reflecting investors’ wait-and-see attitude amid political and economic uncertainty (source: Sifted).
Other funding sources have also been hit by budget cuts: the budget of the France 2030 national innovation program has been reduced by €2 billion, a 29% decrease from the previous year. Several key tax incentives for tech startups have also been trimmed, including hiring subsidies for young researchers.
Caution and More Conservative Growth Plans
Beyond the decline in direct financing, the resulting paralysis and uncertainty are now seen by many entrepreneurs as a major risk, leading them to scale down their growth plans.
The proportion of founders planning to recruit in 2025 has dropped from 85% to 70%, while the share of those expecting to reduce their workforce has nearly tripled, from 5% to 14% compared with the same period in 2024 (source: Sifted).
For organizations built around the logic of hypergrowth, these figures are concerning and reflect a wait-and-see attitude toward deploying innovative offerings.
The number of new startups has itself dropped sharply, almost divided by three, from 3,500 in 2023 to 1,200 in 2024 (France Digitale / EY), with 2025 forecasts looking no brighter.
Not Everyone Is Affected Equally
These numbers stand in stark contrast to the more euphoric periods for startups. Yet we should avoid succumbing to the current sense of doom. Not all companies are equally affected.
Startups in strategic sectors, for instance, continue to attract investment, particularly those developing AI- and quantum-based cybersecurity tools and services.
More broadly, profitable startups or those showing strong revenue growth and clear paths to profitability still manage to raise funds to finance their expansion.
Let’s not forget that 60% of startups achieving a positive exit do so through pure self-financing. They may take longer to be acquired than their venture-backed counterparts (a median of 15 years compared to 9 years, according to Avolta), but by nature they are less exposed to financial cycles.
Back to Fundamentals
Governments come and go; entrepreneurs remain, because their time horizons are not the same. Political turbulence merely pushes startups and their backers to shift from a “growth-at-all-costs” mindset to one focused on resilience and faster profitability.
Beyond sector dynamics, some startups seem immune to crises, as Alain Bashung sang back in 1994, “Ma petite entreprise ne connaît pas la crise.”
Economic and financial crises are inevitable, sometimes even triggered or amplified by political instability. Yet exceptional teams developing clear, scalable offerings manage to overcome even the harshest conditions.
No Comparison to the Dot-Com Bubble… For Now
For those who lived through the dot-com crash between March 2000 and October 2002, today’s tremors pale in comparison to the collapse that then hit global markets, especially tech-heavy indices. But there’s nothing to say such a scenario couldn’t happen again, in France or elsewhere.
After the dot-com bubble burst, the purge was severe. Yet companies with relevant offerings and the ability to generate rapid revenues and mid-term profits survived the storm.
Pierre Kosciusko-Morizet, cofounder and CEO of PriceMinister, noted at the time that his company’s growth had become more moderate but also that competition had thinned considerably, as most rivals had vanished.
Beyond the revolving door of governments and speculative bubbles, entrepreneurs must adapt — and when capital becomes scarce, return to the fundamentals of value creation.
