VC Investments for French Internet Startups Spikes

Venture capital companies injected FF831 million ($121 million) into French
Internet startups in 1999, 11 times more than they invested in 1998,
according to a report by Chausson
, France’s top fundraiser for Net startups.

Overall VC investment into French new-technology startups — including the
Internet, telecommunications, computer equipment, software and biotech
sectors, among others — increased 236 percent to FF2.27 billion in 1999, up
from 1998’s level of FF675 million, according to the report. Some 281
new-technology companies received VC, up 153 percent from 1998. The average
amount per company rose 31 percent to FF8 million, up from FF6.1 million.

In the second half of the year, for the first time in France,
Internet-sector startups garnered more VC than those in the software sector,
the report said. The Net sector took in FF626 million (U.S.$91 million), 2.9
times more than in the first half and 8.9 times more than for all of 1998.
It now accounts for 45 percent — 31 percent for Internet
services-and-content companies and 14 percent for e-commerce businesses —
of all VC investment into new-technology startups. The software sector was
the second half’s biggest loser: its share fell to 22 percent from 38
percent in the first half.

“There’s a lot more venture capital available in France these days, compared
to just a few years ago, and most of it is going to Internet companies,”
Pascal Mercier, a spokesman for Chausson Finance, told

Sixty Internet companies received VC in the second half, up from 32 in the
first half, according to the report.

“I would say that, including mobile-Internet projects and Telecom startups,
close to 100 percent of the capital we raise these days is Internet-related,
mostly for B-to-B companies,” Mercier said.

Overall, the top ten VC companies accounted for 68 percent off all
investments in new-technology, the report said. The top five, in terms of
the amount invested, were: 3i
with FF170 million (U.S. $24.6 million); Apax Partners with FF136 million
(U.S. $19.7 million; Innovacom with
FF121 million (U.S. $17.5 million); Galiléo with FF94 million
(U.S. $13.6 million); and Sofinova
with FF82 million (U.S. $11.9 million).

Innovacom (24), Spef (21) and CDC Innovation

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