How Hugging Face got French tech talking

Good morning there,

While Mistral continues to grab most of the limelight in France's lively AI sector after launching last year, techies in the country are starting to turn their attention towards an AI startup that’s been a feather in the nation’s cap for a while: eight-year-old Hugging Face.

Today, French tech reporter Daphné Leprince-Ringuet traces its origins from a university rock band to an open-source AI platform that’s the talk of the town in Paris. Scroll on for that.

Elsewhere, we look at the AI healthtech startups VCs have their eyes on, break down March’s early-stage funding data and go inside the climate tech unicorn factory behind Northvolt and H2 Green Steel. 

– Ali Humayun, junior editor

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How Hugging Face got French tech talking

There’s an eight-year-old AI company that’s increasingly on everyone’s lips in France. 

Founded officially in 2016 in New York by a trio of French founders, Hugging Face isn’t a new story. In fact, the company, which has built an open-source platform for developers and engineers that hosts AI models and tools, has already raised nearly $400m to date from a host of high-profile US VCs like Sequoia Capital and Coatue. 

Tech big hitters like Google, Amazon, Nvidia and Intel also joined its $235m Series C closed last year, at a reported $4.5bn valuation.

But until now, the company’s gone under the radar in its home country. “They are one of these companies that are better-known in the US than in France, even though the three founders are French and they have their offices in central Paris,” one open-source startup founder tells me.

This is changing as French tech takes a heightened interest in all things AI — driven largely by the blockbuster fundraising rounds completed by Paris-based Mistral, which in less than a year after launching has raised nearly €500m. AI startups are popping up at unprecedented speed in France — and Hugging Face is increasingly being seen as an early example of success in the sector for everyone else to look up to.

So what is its secret recipe? Though the founders consider the company to be Franco-American, and its biggest team is based in Paris, the answer lies in the US — as it often does for startups over here.

From day one, Hugging Face has raised money with US investors, it’s signed partnerships with big US companies and now sees the majority of its revenue originating from the other side of the Atlantic.

And although things are moving fast in French tech, it’s a playbook that cofounder Julien Chaumond still recommends — especially when it comes to raising funds. 

“French and European VCs are still one step behind in terms of the risks they are taking,” he tells Sifted.

“There is more money in Europe, but I’ve been completely blown away when talking with some of our investors in the US. It’s another level of game, and that’s still the case.”

I sat down with Chaumond to discuss Hugging Face’s success in the US, how the company is already emerging as a founders factory — and how it all started with Alanis Morissette covers…

— Daphné Leprince-Ringuet, French tech reporter

🇫🇷 French SaaS company Pigment, which provides enterprise customers with a platform that lets them visualise critical business data in real-time, ranging from profit and revenue to burn rate and headcount, has raised $145m in Series D funding to support its growth in North America.

• The equity round was led by US VC Iconiq Growth, with participation from US-based Sandberg Bernthal Venture Partners and returning investors IVP, Meritech, Greenoaks — also from the US — as well as UK VC Felix Capital.
• The company remained coy on its latest valuation, but cofounder Eléonore Crespo says it “has significantly increased since last year”.

Our Sifted 100 highlights

Discover the pulse of tech innovation in the UK and Ireland with our latest report. We explore where the action is happening, what sectors are most represented and what’s next for the top 100 fast-growing companies featured in our ranking. 

🌟 “If Vargas is behind something it cannot fail”: Inside the climate tech unicorn factory behind Northvolt and H2 Green Steel.

👀 19 AI healthtech startups to watch according to VCs.

❤️‍🩹 How it feels when your startup fails.

So far this year, early-stage dealmaking is steady-as-she-goes: VCs invested €1.2bn across 336 pre-seed, seed and Series A rounds last month — roughly flat from the previous month, according to a new Sifted analysis of Dealroom data. 

• That March figure is still down about 14% from the same time last year.
• But perhaps surprisingly, the embattled fintech sector earned the top spot as the most well-funded area in March, with €208m raised; enterprise software startups came in second with €164m in funding.
• For more data, and the 12 rounds in March to have on your radar, read the full report here. 

Geneva, Switzerland-based Neurosterix, a drug discovery startup developing allosteric modulator therapeutics for underserved neurological disorders, raised $63m in Series A funding. Perceptive Xontogeny Venture Fund led the round and was joined by investors including Perceptive Life Sciences Fund and Acorn Bioventures.

Glasgow, Scotland-based EnteroBiotix, a biotech developing microbiome therapeutics, raised £27m in funding, which consists of £15.7m of new equity and the conversion of £11.6m of loan notes into equity. Thairm Bio, Kineticos Life Sciences and The Scottish National Investment Bank co-led the round and were joined by Scottish Enterprise.

Cambridge, UK-based Biofidelity, which is a biotech startup working on precise treatments for cancer patients, raised $24m in funding from investors including Agilent Technologies, Octopus Ventures, BlueYard Capital, and Longwall Ventures.

Ankara-based ikas, which is an e-commerce platform that enables SMEs and entrepreneurs to open online sites without requiring technical expertise, raised $20m in Series A funding. International Finance Corporation and Re-Pie Asset Management co-led the round.

Copenhagen-based REDUCED, which uses fermentation technology to create food products made from organic surplus produce, raised €6m in funding from investors including Novo Holdings, Einar Willumsen, the Export and Investment Fund of Denmark and Rockstart Agrifood.

Stockholm-based Telness Tech, which automates user interface designs for telecommunications companies, raised €5m in funding from Industrifonden and Viltor.

Lund, Sweden-based Ironic Biotech, which is developing a portfolio of plant-derived proteins that contain iron to help individuals with iron deficiency problems, raised €1m in pre-seed funding. Nordic Foodtech VC led the round.

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