Julia Andre of Index Centures sees a depth of engineering talent in France
Index Ventures
It’s been a good week for France’s innovation economy. Or to be more precise, it’s been a very good week indeed for Paris-based AI scaleup Mistral, a company that has rapidly established itself as one of the poster children for the French tech sector. On Tuesday, Mistral announced the completion of a €1.3 billion Series C round. Led by semiconductor company ASML, ringing up a valuation of €11 billion.
Arguably, the deal provides a timely reminder of the strength of France’s technology ecosystem, particularly around AI. Mistral has a wide-ranging AI offer, and its work on large language models means it is competing in a market traditionally dominated by lavishly funded U.S. companies such as OpenAI and Anthropic. And as Julia Andre, a Principal at early Mistral investor Index Ventures notes, the company’s rate of development has been unusually rapid.
“Really, the pace at which they’ve evolved in the past two years has been incredible. Very few companies can reach that speed in terms of assembling a team, building a product that is world-class class and establishing credibility in a space where competition is insane,” she says.
There is a bigger picture here. According to market intelligence provider Dealroom, French technology companies raised $3.2 billion in VC finance in the first half of 2025, putting the ecosystem third in the European rankings behind Germany and the U.K., which secured $4.4 billion and $8 billion, respectively.
As Andre sees it, at least some of the elements that have contributed to the success to date of Mistral suggest that France is well-positioned to exploit the benefits of cutting-edge technologies, such as generative AI.
Domestic Talent
As she points out, Mistral has built its products by drawing on domestic talent. “It has a founding team of French engineers who have incredible capabilities. That has enabled them to draw in more French and European talent to work with them.”
Importantly, much of the talent is being nurtured by the French education system. “The footprint of French talent is disproportionate to the size of the country,” Andre adds. “The education system is very strong in engineering and math.”
Paul-Adrien Hyppolite agrees. He is co-founder and CEO of Spiko, a fintech company that offers small businesses (mainly) a means to take advantage of central bank interest rates (rather than the lower rates offered by commercial banks) without losing liquidity. As he sees it, attracting talent is not a problem.
“You have excellent engineering schools in France, and that definitely helps in the training of software engineers. So hiring your first software engineers is easy,” he says.
Hyppolite is equally bullish on finance. “ Funding has always been easy,” he asserts. “You have French VC funds, and you have all the global VC firms. Quite a few French people are in the VC firms and that probably helps.”
One particularly important player in the funding market is BPI France. Established as a public investment bank in 2012, it styles itself as a one-stop shop for entrepreneurs, providing a mix of loans and investment.
Nicholas Fayon is CEO of Jump, a company that provides services aimed at France’s growing army of freelance workers. Freelancers who sign up to its platform can take advantage of employee-style benefits such as sick pay, holidays, and the management of tax payments. Fayon says BPI is a key player in the domestic ecosystem.
“We have a public bank. This is a big edge. For every one euro, BPI will complement the money you raise through non-dilutive money. You need to pay it back, but the interest rates are favourable.”
There is more government assistance through an initiative known as “aide à la création ou à la reprise d’entreprise” (ARCE), which supports entrepreneurs through the benefits system. Essentially, this means prospective founders can – as Fayon puts it – maintain their lifestyles while working to get their businesses off the ground.
“You can set up a company with the same people who are in the same situation,” says Fayon. “That is how we started, we are all unemployed.”
There is additional state support through the funding of incubators, and as Fayon notes, a government ministry has been established to promote entrepreneurship.
Challenges Ahead
Is everything in the garden rosy? Well, there is still much that can be done. As is the case elsewhere in Europe, France has struggled to maintain the levels of investment seen in the recent past. Dealroom figures indicate that the $3.2 billion of VC finance raised in the first six months of this year was down sharply from more than $4 billion a year earlier.
However, Hyppolite says the legal and regulatory structures of the European Union are the real problem. He cites his own sector as an example. “The single market is almost a misnomer. We are in the business of issuing financial instruments. Securities management is not at all harmonized at EU level. So the way you issue a financial instrument in France is different from the way you do it in Luxembourg or Ireland,” he says.
This, he argues, can create a bias towards the home market or at least a dilemma. For instance, Spiko has identified small businesses as customers. Looking forward, it could address similar customers in other jurisdictions, which would mean addressing new regulatory hurdles. Or it could widen its customer base in France to cover anyone who would benefit from higher rates of interest.
Andre sees similar challenges. “The EU has 27 legal systems, with differences on corporate rules, rules around talent movement, and rules on the treatment of stock options,” she says.
To address this, there is a ground up movement. Under the banner of EU Inc, founders and investors are campaigning to create a real single market for technology startups.
But France is benefitting from a cultural change. “When I graduated, not a lot of people would go into startups,” says Andre. “Now there is such a big proportion going into tech. People understand they can build a career and they will be compensated for it.