French startups raised 2.67 billion euros in the first quarter of 2026, the best quarter since the peak of early 2022 and a 111% jump on a year earlier. The rebound confirms that capital is available again, but it also reveals a deep shift in the way it is allocated. Across 2025, French Tech raised a total of 7.4 billion euros, down 5% on 2024. Three sectors now capture most of the investment.
Artificial intelligence, the engine of venture capital
Generative AI is shifting the centre of gravity of innovation financing. Mistral AI’s 1.7 billion euro mega-round alone explains the resilience of the French market in 2025. The momentum picked up further in early 2026 with AMI Labs, founded by Yann LeCun, which raised 890 million euros in March, the largest seed round ever recorded in Europe, with a 3.5 billion dollar valuation. That single deal accounts for more than a third of the amounts raised over the quarter.
AI is now feeding the entire software sector, which ranks first with 3.3 billion euros raised in 2025, up 9%. Having an AI layer is no longer enough on its own; it has to translate into concrete business value. Dust, a French AI agent platform, is a clear example: in June 2026 it closed a 40 million dollar Series B, bringing the total raised to more than 60 million, and it now serves over 1,000 clients including Mirakl, Spendesk and Pennylane.
Pennylane itself, the French fintech turned unicorn, raised 175 million in early 2026, confirming the appetite of international funds for European software vendors that combine fast growth with broad enterprise adoption.
Life sciences, the strong comeback of a strategic sector
Life sciences are staging a clear comeback after several years of decline, with 975 million euros raised in 2025, up 20%. Biotechs specialised in oncology and targeted therapies are driving the growth, as illustrated by Adcytherix’s 105 million euro round. Medtech is also benefiting from this momentum: Sonomind, a young Paris-based company focused on the treatment of treatment-resistant depression, closed a 20 million euro Series A in May 2026.
Investors are looking for assets with strong technological intensity, high barriers to entry and tangible industrial applications. French life sciences, supported by a recognised research base and the France 2030 plan, tick those boxes.
Deeptech and energy, the new industrial priorities
Deeptech took the lead in amounts raised in the first quarter of 2025, with 375 million euros. This breakthrough reflects the priority placed on technological sovereignty, from quantum computing to semiconductors and robotics. The rounds closed by Alice & Bob (100 million), Wandercraft (66 million) and Quobly (115 million) in quantum computing illustrate this clearly.
Energy fits into the same trend. Aix-based startup Otrera attracted EDF in its 17 million euro round, betting on the fourth-generation nuclear reactor, and is preparing a new round in late 2026 to fund its TRL ramp-up. French-Italian startup Newcleo closed a 75 million round of its own, bringing the total raised since 2021 to more than 645 million. These deals reflect investors’ conviction in breakthrough technologies that address Europe’s decarbonisation and energy sovereignty challenges.
Greentech and consumer Fintech, sectors in retreat
Not every sector is benefiting from this momentum. Greentech, the long-time darling of the decade, dropped 46% in value in 2025, down to 1 billion euros raised. This pullback reflects investors’ caution towards business models with long paths to profitability in a context of regulatory uncertainty. Fintech is down 35% to 543 million euros, a sign that investors are favouring AI and Deeptech over purely digital business models.
A two-speed market that is reshaping the strategy of SMEs and mid-cap companies
The Q1 2026 rebound confirms a major reshaping. Capital is available, but it is allocated in a more concentrated and selective way. Mega-deals account for a growing share of the amounts, while the number of transactions fell to 136 in Q1 2026. The Île-de-France region captures 74% of investment by value.
For executives of SMEs and mid-cap companies, the message is clear. Capital will flow to projects that can demonstrate concrete business value from AI, a defensible technological breakthrough in Deeptech, or a differentiated therapeutic innovation in healthcare. Purely digital business models will have to prove their profitability before attracting funding. French venture capital is entering a decade of selectivity, in which the quality of the file and the depth of the technology will weigh more heavily than the size of the addressable market.
