According to exclusive information from the Pappers website for the daily newspaper Les Echos, in 2023 only 15% of innovative French companies – members of the French Tech 120 – had published their accounts. Here are some insights from the experts at AURIS Finance, a consultancy specialising in mergers and acquisitions.
While French start-ups are often in a hurry to announce how much money they have raised, they are much more discreet when it comes to publishing their financial statements. According to a survey by the Pappers website for the French daily Les Echos, only 17.5% of the companies in the French Tech 120 published their results in 2022. By 2023, this percentage had fallen to 15.8%.
A legal obligation
However, French start-ups are not exempt from legal obligations and are subject to the same rules as all French companies. They must file their annual statutory accounts within seven months of the end of the financial year. Companies that fail to meet these obligations are liable to a fine of €1,500, which can be doubled if the offence is repeated. This financial penalty is hardly a deterrent given the amounts raised. In the first half of 2024, French Tech start-ups raised €4.2 billion, a figure that has remained stable over the past year.
Discretion is key
The average investment is €10 million. Given the sums raised, paying the fine may prove to be a wise decision. Some fast-growing start-ups believe that publishing their statutory accounts would give too much information to their competitors. They therefore prefer to pay the fine. Publishing accounts can also be difficult when the expected results are not forthcoming. In such cases, managers prefer to pay the fine to avoid revealing critical elements such as their level of profitability or their financial difficulties.
FinTech and InsurTech
However, data from the Pappers website reveals some good performers among the members of the French Tech 120, starting with FinTech and InsurTech companies. These are two highly regulated sectors. For them, financial transparency is a prerequisite for obtaining and maintaining their authorisation from the ACPR (Autorité de Contrôle Prudentiel et de Résolution). In 2024, only 19 start-ups in France had demonstrated transparency. Among them are three unicorns of the financial sector: insurer Alan, fractional payments platform Alma, and consumer credit specialist Younited. All three are highly regulated businesses that cannot afford to ignore full transparency. In 2022, Younited raised €60 million from its financial partners. The innovative company, valued at €1.1 billion, is now present in five countries. In the same year, Younited reported a 54% increase in turnover to €190 million.
Leaders in transparency
While the financial sector is required to publish its accounts, other sectors are playing the transparency card willingly. Companies that have met the deadline include Exotec, Ekwateur, Gojob, HelloCSE and LeHibou, a platform that connects companies with freelance IT consultants.
Our experts at your service
The decision to be transparent is not always straightforward. However, being open and honest can help you attract the right financial partners. At AURIS Finance, our experts are sector-specific. In addition to assisting you in securing financing, we can also support you in enhancing your profile in the marketplace.
