Like 2024, this new year is not starting off under the best auspices for the French startup ecosystem. It must indeed face numerous challenges in an economic context that remains uncertain.
Budget uncertainty
Because last year was marked by a major crisis in the financing sector, making access to funds all the more complex for young startups. And this is a trend that has been increasing since 2023: venture capital funds need liquidity when they have never had so many assets under managementafter an extremely successful period marked by much lower rates.
Added to this is budgetary instability, with the motion of censure in December having canceled the 2025 finance law. The new government must still clarify its position on several support measures for startupsin particular questions around the innovation tax credit (CII) and the Young Innovative Company (JEI) status, two solutions popular with the ecosystem. This uncertainty logically complicates business budget planning.
Fortunately, they can count on the support of Clara Chappaz. The former director of the French Tech Mission, appointed Secretary of State for AI and Digital Technology by Michel Barnier, was kept in the government by François Bayrou. His appointment as Minister for Digital is seen as a positive sign by French Tech.
New regulatory constraints
Startups must also prepare for the arrival of new European legislation, which will impose additional constraints on their activity. Starting with the AI Act, legislation aimed at regulating the deployment and use of artificial intelligence (AI). Although its entry into full application will not take place before 2026, several measures will be put in place this year.
From February, for example, bans on certain AI systems will begin to apply. This will concern practices prohibited by legislation, such as biometric identification systems or those which exploit social scoring. Likewise, general-use models must be brought into compliance with the text from August 1.
The Data Act will come into force in September. Aimed at modernizing and harmonizing data governance across the European Union (EU), this regulation will have significant implications for providers of connected devices, among others.
Finally, the Corporate Sustainability Reporting Directive (CSRD) will introduce new requirements for startups. Indeed, it significantly expands sustainability reporting requirements, with the aim of improving the transparency, comparability and accountability of their sustainability practices. Only companies with more than 250 employees, with a turnover exceeding 50 million euros in turnover or with 20 million euros in total assets, are affected.
- In 2025, French Tech will have to face several challenges such as budgetary instability, with the new government still having to clarify its position on support measures for startups.
- Several European regulations will introduce new rules to be respected for young companies.
- At the same time, the financing sector is in dire straits, complicating access to new funds for startups.
