TLDR:
- France VC deal value dropped sequentially from Q3 to Q4.
- Private equity fundraising saw mixed signals.
Article Summary:
France experienced marginally better Q4 macroeconomic data compared to Q3, with flat GDP growth and decreasing inflation. The consumer price index lowered to 4.1% in Q4. Unemployment in France stood at 7.3%, higher than the EU27 average of 6.0%. Despite this, the International Monetary Fund predicts a 1.0% growth for France in 2024.
The public equity markets in France saw the CAC 40 finish the year up 16.5%, with luxury group LVMH reaching a market cap of $500 billion in April 2023. However, the PE/VC IPO market remained muted, with only four public listings from VC-backed companies in 2023.
In terms of venture capital, France saw a slight increase in exit count in Q4, along with two new unicorns being established. However, VC fundraising dropped significantly in comparison to 2022. Private equity deal value fell by 19.9% YoY in 2023, with no mega deals being executed in Q4.
PE exit value plummeted in the second half of 2023, reaching a low not seen since Q2 2020. France also saw a lack of exits from PE-backed companies throughout the year. LPs and GPs turned to the secondaries market for liquidity, with Ardian raising over $20 billion for a new secondaries fund.
In an effort to boost financial services attractiveness in Paris, new legislation allows sponsors to invest in French companies with a market cap of up to €500 million, up from €150 million.
Overall, 2023 was characterized by challenging fundraising conditions and a lack of exits in both venture capital and private equity in France.
