• 2024 to outperform record lows of 2023 but IPO optimism muted
• Sodexo and Renault’s carve-outs could restore confidence
• Tech unicorns including Doctolib and Contentsquare still on the sidelines

After a sluggish 2023, French ECM dealmakers are cautiously optimistic that 2024 will pave the way for a solid return of IPOs in 2025, they said.

“2023 was somehow a blank year in France with no listing of more than EUR 20m registered. But the large carve-outs are already lined up for 2024 – Sodexo [EPA: SW]’s Pluxee and Renault [EPA:RNO]’s Ampere could help create more confidence among candidates and spur a return of large IPOs in 2H24 or 2025,” Société Générale’s co-head of ECM France and Benelux Pierre Troussel said.

This year won’t be a vintage one for France, but a likely surge in overall European listings – starting with Greece and Spain, alongside more stable market conditions, could embolden French IPO candidates from 2H24, added Jean-Baptiste Bureau, Head of ECM France and Southern Europe for HSBC.

Historically, a couple of EUR 300m plus listings was a good year for France. But 2024, which should outperform 2023, the worst in a decade, will still be marked by heightened caution among investors, he added.

In 2023, French IPOs’ deal volumes only stood at EUR 61m, down from EUR 485m in 2022; there was almost EUR 4bn of volume in 2021.

Another deal that IPO bankers are betting on for the first quarters of this year is Exosens, the French optical technologies which hopes to be listed with an enterprise value of up to EUR 1.1bn, as reported.

The company, which specialises in optical technologies for defence and industrial applications, could gain investor traction in the wake of other European defence industry. Cyprus-headquartered night vision and thermal imaging systems manufacturer Theon International and Triton-backed German defence contractor RENK are both scheduled to hit the markets soon.

A stable of French unicorns

If markets stabilise this year, French IPO hopefuls will likely restart the work of getting ready for a listing, and there are several tech unicorns that raised pre-IPO rounds in 2020-21, several ECM specialists agreed.

Early look meetings have resumed over the past few weeks, but investors are still very selective, an ECM banker noted.

Several French tech unicorns which have been sitting in the IPO pipeline for over two years, are not expected to press ahead this year, ECM bankers agreed.

Local unicorns include Doctolib, Ynsect, EcoVadis and Contentsquare, but 2025 is a more likely IPO year for all these deals, several French ECM specialists said.

A stock-market listing remains a great way for VCs, and other shareholders, to exit unicorns, and provide liquidity to their typically fragmented shareholding structure, HSBC’s Bureau said.

The performance of French tech firms that listed in 2021 – Believe [EPA:BLV], OVH Groupe [EPA:OVH] and Exclusive Networks [EPA:EXN] – has also not been stellar and prompted future candidates to wait, several bankers agreed.

The cancelled IPO of French software company Planisware last October has raised the level of caution among other issuers, bankers added.

France is home to 29 unicorns, meaning tech companies with a valuation above EUR 1bn, according to data published by the French Government last year and widely used by the local press.

The French government pledged in November 2022 that it aims for 10 French tech IPOs by 2025, including two with valuations of over EUR 5bn.

No unicorn has been listed since the IPOs of OVH and Exclusive Networks back in 2021.

The objective sounds ambitious, especially as the deadline nears, but it is still possible, according to an ECM banker working with unicorns.

Other mid-size IPOs in high-growth areas have struggled to find a path to public markets, even though they play at the intersection of technology and renewables – arguably the two categories largely sought out by investors.

Issuers like green hydrogen producer Lhyfe [EPA:LHYFE], hydrogen fuelling solutions manufacturer Atawey, biogas producer Evergaz and hydrogen-powered taxi company Hype, are all “in the fridge”, according to one adviser.

Since 2017, the country’s government has striven to create the best conditions to facilitate tech IPOs and start-up growth with increased foreign investment encouraged through tax cuts, supportive labour market and tax reforms and reduced administrative paperwork burden.

The government is also bracing for the ongoing discussions between the European Parliament, the European Commission and the EU council of member states to get an agreement on the Listing Act Package it has vigorously worked on with Euronext.

The legislative package, if approved, would ease administrative burdens on cross-border investors and harmonise investment and public markets rules across the bloc.

France’s IPO revolution, although simmering, is still a way away.