Landscape of CVC in France

France hosts some of Europe's most storied and successful corporations and many of them recognize the strategic value of investing in startups worldwide to innovate and maintain a competitive edge. This article provides an overview of the CVC landscape in France, showcasing success stories and examining the factors behind its growth and success.

France has the third highest concentration of CVCs in Europe

France ranks third in Europe, behind Germany and the UK, in terms of the number of Corporate Venture Capital units, and holds the seventh position globally. French CVC is bolstered by the presence of globally leading companies in sectors such as finance, aerospace, energy, and consumer goods, where giants like Airbus, Engie, and L’Oréal drive substantial innovation.

The country’s CVC landscape is further distinguished by strong governmental support for innovation fueling startup growth and technological advancement. Notable success stories such as Orange Digital Ventures, which has made significant strides in the tech and digital services sector, highlight France's ongoing influence and potential in shaping the future of corporate venture capital.

The evolution of CVC in France

The early stages of Corporate Venture Capital activities in France can be traced back to the late 1980s when Schlumberger, then a French company, established the first CVC unit. This marked the beginning of CVC activities in the country. The 1990s saw further developments, notably with France Telecom (now Orange) launching Innovacom in 1999, focusing on telecom and technology startups.

Regulatory reforms in the early 2000s provided the necessary environment for the growth of CVC activities. These reforms simplified investment structures, reduced tax burdens, and encouraged corporate engagement with startups. In 2005, EDF created Electranova Capital, focusing on clean technology and energy startups, further demonstrating the increasing corporate interest in innovation.

A significant surge in CVC activities occurred in the mid-2000s, driven by increased corporate interest in innovation, digital transformation, and the need for external sources of disruptive technologies. Corporations across various sectors, including technology, telecommunications, energy, and finance, established dedicated CVC units or partnered with existing venture capital funds. Notable examples include Société Générale's SGAM AI Tech in 2008, Engie New Ventures in 2012 and Airbus Ventures in 2013.

The 2020s have continued to build on this foundation, with major corporations like L'Oréal launching BOLD in 2020 and Danone establishing Danone Manifesto Ventures in 2021, targeting sustainability and health-focused startups. The CVC legal environment became more lenient with the introduction of growth focused laws. The PACTE law focused on financing growth, encouraging innovation and prioritizing strategic sectors. The TIBI Initiative encouraged investments in cutting edge French technology companies including early stage startups, ensuring that France remains at the forefront of corporate innovation.

French CVC Landscape in 2024

The slide below presents the landscape of French companies' CVC in 2024. Besides Financial Services, a sector with CVC presence in most countries, the significant presence of CVC in the Consumer and Mobility sectors set France apart.

Download this landscape in high resolution

with clickable logos (CVC websites) here as a PDF file

Figure 1: France Corporate Venture Capital Landscape in 2024

Sources: Geo VCG, company websites (2024)

In the consumer space, the luxury industry is dominated by French companies such as LVMH and L’Oréal. Beyond that, France has also produced industry leaders in food and beverage, with companies like Danone and Pernod Ricard, the latter having created one of the first CVCs in the Food and Beverage sector.

Another area where France stands out is mobility. Due to high barriers to entry, only Germany rivals France in this sector, making both countries leaders in mobility-focused CVCs. What makes France unique is its diversification across various mobility industries, including aviation with Airbus and Aéroport De Paris, the railway sector with SNCF, RATP, and Alstom, and automotive parts providers like Michelin. Some of these companies, such as SNCF, have strong ties to the public sector, reflecting the close relationship between French corporations and government support.

Some French companies that are global leaders in their sectors, such as LVMH, Airbus and Danone, have to keep innovation to maintain their leadership position. Traditionally they relied on research and development, but to offset R&D’s high cost, they increasingly rely on CVC to invest in promising startups developing the technologies sought by the company. This has been seen for instance in the pharmaceutical sector with Institut de Cancérologie de l’Ouest investing in cancer treatment startups, and is also very present in aeronautic, energy and defense.

Success Stories in French CVC

Below we highlight some examples of France's most successful CVCs, illustrating their strategic impact and contribution to innovation.

ALIAD by Air Liquide

Founded in 2013, ALIAD is the venture capital arm of Air Liquide, a global leader in gasses, technologies, and services for industries and health. ALIAD focuses on startups in energy transition, healthcare, and deep tech sectors like industrial IoT and advanced materials. A notable success story is its investment in Solidia Technologies, which develops sustainable cement and concrete solutions. Air Liquide’s collaboration has supported the startup’s expansion and provided resources to scale its low-carbon technologies, aligning with global sustainability goals

Orange Ventures 

Established in 2015, Orange Ventures is the venture capital unit of Orange, one of Europe's leading telecommunications companies. It focuses on startups in fintech, cybersecurity, cloud computing, and digital services. Orange Ventures has made a key investment in Monzo, a digital bank revolutionizing personal banking through its mobile-first approach. The partnership has accelerated Monzo’s growth, helping Orange leverage fintech innovation to enhance digital banking services, especially across Europe.

Schneider Electric Ventures 

Launched in 2018, Schneider Electric Ventures is the venture capital arm of Schneider Electric, a global leader in energy management and automation. The CVC focuses on startups in the fields of energy efficiency, sustainable energy, and industrial automation. A standout investment is in Sense, a company specializing in home energy monitoring solutions. Schneider Electric’s strategic support has accelerated Sense’s ability to bring energy-saving technologies to market, aligning with Schneider’s vision of promoting smarter, more sustainable energy use in homes and businesses.

Characteristics of CVC in France

In a survey conducted by the Boston Consulting Group among approximately 30 French Corporate Venture Capitals, several reasons emerged for their investments in startups. The top three reasons were commercial synergies (67%), return on investment (54%), and maintaining innovation (50%), whether through experimentation or forward-looking monitoring. These priorities far exceeded other motivations. Following the first three reasons, strategic acquisitions (29%), operational improvement (35%), and, perhaps more surprisingly, disrupting the corporate culture within the group (17%) were also noted. Other criteria appeared to have minimal influence on the decision to invest in a startup.

When examining how French CVCs invest, there is a preference for early-stage investments. Specifically, they show a strong interest in Series A startups (43%) and those still in the seed stage (30%). Series A is favored because startups at this stage have typically demonstrated viable products, allowing CVCs to easily assess whether the proposed innovation aligns with their strategic interests. An analyst in a French CVC stated that they would only invest if the startup was linked with one of the company’s core activities. Fortunately for founders, this is not always the case as bigger French CVC often have a wider investment thesis.

France CVC trends and outlook

Back to a normal deal flow

In recent years, the French CVC landscape experienced significant growth, with the number of deals peaking at 724 in 2021 and 826 in 2022. This surge was followed by a return to more typical levels in 2023, with 624 deals—numbers comparable to 2018, 2019, and 2020, which averaged around 600 deals annually. These transactions were driven by approximately 70 active CVC funds, with an impressive average of around 9 deals per CVC per year, highlighting the dynamism of France's CVC ecosystem.

Figure 2: Number of deals made by CVC and other corporate investors in France

While overall venture capital funding saw a sharp decline following the boom years, particularly after 2022, CVC deals have experienced only a slight decrease in comparison. This resilience underscores the strategic nature of corporate investments, as many corporations continue to prioritize innovation and long-term partnerships with startups, even during times of market volatility. Now that the number of deals has stabilized, we can turn our attention to the trends that are likely to shape the coming years.

Sustainability and deep tech sectors 

One significant trend is the increasing integration of sustainability considerations within CVC strategies, particularly in sectors like mobility and energy. With new regulations emphasizing carbon reduction and renewable energy adoption, French CVC units are expected to intensify investments in startups offering innovative solutions in electric vehicles, smart grids, and sustainable energy technologies. This focus not only aligns with global sustainability goals but also positions corporations at the forefront of the green transition.

Moreover, the expansion of deep tech investments remains a key trend, driven by advancements in AI, blockchain, and biotechnology. French CVC units are increasingly targeting startups that leverage these technologies across various sectors, including healthcare, finance, and agriculture. This strategic focus not only enhances corporate competitiveness but also positions France as a hub for cutting-edge innovation on the global stage.

Public institutions support: Bpifrance

Collaboration between CVC firms and public institutions plays a pivotal role in fostering innovation. Initiatives such as the Mission French Tech and programs like Next40/120 will continue to facilitate partnerships that provide regulatory support, funding opportunities, and access to research and development resources. Mission French Tech is the administration in charge of developing the French startup ecosystem by offering access to various services, networks of professionals and institutions. Next40/120 is a program aiming at transforming France 120 most promising startups into global industry leaders by offering mentoring and access to Mission French Tech’s services. 

France's national investment bank, Bpifrance, has been instrumental in fostering innovation and supporting startups through co-investments, grants, and loans. Bpifrance manages €44 billion and invests over €3 billion annually in venture and growth funding. With Emmanuel Macron's France 2030 initiative, an additional €34 billion in funding will be allocated to invest in innovative and strategic technologies. In the CVC space, Bpifrance partners with corporate investors to help them access cutting-edge startups, share risk, and leverage its extensive network. By facilitating these collaborations, Bpifrance serves as a bridge between the private and public sectors, accelerating the growth of promising startups and strengthening France's overall innovation ecosystem.

French CVC global reach 

Another trend for French CVC is the strategic investment in startups from other countries and regions, particularly in prominent innovation hubs in the USA and Asia. This approach allows French corporations to access cutting-edge technologies and business models emerging in startups from regions renowned for their innovation prowess. Some French CVC units have already established a presence in the USA as shown in our CVC landscape above, tapping into the vibrant startup ecosystems of Silicon Valley and other major cities. By investing in startups in the world's top ecosystems, French corporations can acquire the best-in-class innovations that align with their strategic goals and power their global competitiveness.

Geo Venture Capital Group offers a unique solution with its Corporate Venturing service, enabling companies in France and other countries to find, invest in, and leverage strategically the best and most relevant startups in key innovation hubs, without the high costs and complexities associated with establishing and maintaining multiple CVC units abroad. Companies benefit immediately from Geo VCG’s deep corporate venturing experience and the team's network in the top global startup ecosystems, ensuring they can efficiently identify and invest in high-potential startups that meet their innovation needs. Through Geo VCG's proven approach, companies gain immediate access to premium deal flow and local market insights that would typically require years to develop in-house—accelerating their innovation journey while maximizing return on investment.