The European software ecosystem is stabilizing in 2024-2025, transitioning into a more selective and
capital-efficient phase
Fundraising is projected to reach €11.9bn in 2025E, slightly above 2024 levels – despite a continued decline in deal volume to c.1,900 rounds, the lowest in six years. This confirms a market environment where capital is flowing to fewer, more resilient players.
In parallel, exit activity is accelerating, with a record 1,050 software M&A transactions projected in 2025.
However, total disclosed deal value is expected to reach €7.8bn, well below the highs of 2021, pointing to a market increasingly driven by smaller transactions. This reflects a wave of bolt-on and build-up acquisitions, particularly by private equity-backed platforms, rather than large flagship exits. North American acquirers remain dominant, accounting for the vast majority – a continuation of their longstanding interest in scalable European B2B SaaS.
From a sector perspective, FinTech retains the lead, but Security is rapidly gaining ground, driven by
heightened investor focus on defensible, regulation-related verticals. The AI-native wave continues to
redefine priorities, pushing median round sizes higher across Series B and C, and reinforcing the valuation premium for vertical SaaS platforms.
On the valuation front, VC entry multiples rebounded to 6.5x revenue, while exit multiples remain more
conservative at 1.8x, reflecting a market still dominated by sub-€50m transactions. Notably, bootstrapped companies still represent the majority of exits, often showing strong profitability but trading at lower multiples due to size and structure.
Overall, 2025 marks a turning point for European software: a market emerging
Arthur Porré, Managing Partner, October 2025
2024 marks a turning point for the French Tech ecosystem after the 2021-2022 euphoria and the 2023 reality check. With €7.3bn raised across 668 deals, French startups faced a 17% YoY decline in fundraising value and a 36% drop in volume, suggesting higher average deal values.
The fundraising market shows signs of maturity with larger but more selective deals. While early-stage rounds remain dynamic, growth rounds have become more concentrated, reflecting investors’ focus on proven business models and path to profitability.
Enterprise Software, including AI companies, leads fundraising with €2.2bn secured, while Industrial Tech follows with €1.5bn. The sector’s dynamism is evidenced by the emergence of new French unicorns like Poolside, Pigment, and NewCleo.
US investors maintain their leadership in foreign VC investments, even as foreign funds’ activity in France declines. Bpifrance continues to lead the market with 146 deals in 2024, followed by Kima Ventures (82) and UI Investissement (34).
Exit activity remains stable in value at €12bn despite a 15% decrease in volume to 353 deals. Strategic M&A continues to dominate the exit landscape, with North American acquirers, despite representing a small number of deals, accounting for over 50% of exit value.
This landscape suggests a maturing ecosystem prioritizing quality over quantity, with a clear shift towards sustainable growth and profitability.
Arthur Porré, Managing Partner, 9th of January 2025
The European DeepTech ecosystem has shown remarkable resilience and evolution through 2024, maintaining robust investment levels despite global market uncertainties. With projected investments of €9 billion across 454 deals in 2024, the sector demonstrates sustained investor confidence following the post-COVID surge.
Artificial Intelligence has emerged as the standout segment in 2024, experiencing dramatic growth in investments compared to 2023. This surge reflects the broader global AI revolution and Europe’s growing prominence in this field. Meanwhile, Energy & ClimateTech continues to attract substantial funding, underlining Europe’s commitment to sustainable innovation.
The ecosystem remains predominantly early-stage, with pre-seed and seed rounds constituting most deals. This suggests a healthy pipeline of innovation but also highlights the need to support companies through later growth stages. France and the United Kingdom continue to lead the European DeepTech landscape, though the ecosystem is increasingly distributed across the continent.
Public entities are playing a crucial role in nurturing the ecosystem, emerging as the most active investors. This public-private partnership approach appears to be a distinctive feature of Europe’s DeepTech development, potentially offering a sustainable model for supporting deep technologies from laboratory to market.
On the exit front, while activities have been somewhat constrained, with an expected €1.7 billion in total exit value for 2024, the market shows signs of maturity. Notable transactions, particularly in Space Tech and Energy & ClimateTech, demonstrate growing interest from both European and international acquirers.
Arthur Porré, Managing Partner Avolta, November 19th, 2024.