Good morning there,

President Macron's snap election isn't the only excitement in France this week. Sifted has learnt that Paris-HQed AI startup Mistral — arguably Europe's hottest startup — has closed a new funding round of €600m at a €5.8bn valuation. 

We have more on what change in the French government could mean for La French Tech — and which investors led the Mistral deal — in this newsletter.

Elsewhere today:

• ‘Tech is not a priority for the far-right’: Why Macron’s snap election is worrying the startup nation

• Italy’s new €50m VC fund with 100 founder backers

• Poland's CampusAI raises $10m pre-seed to create metaverse to learn AI skills

— Daphné Leprince-Ringuet, French tech reporter

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France's uncertain tech agenda

Hundreds of millions of European citizens voted last week in Europe’s parliamentary elections — but it was in France that it caused the most chaos.

French far-right party Rassemblement National (RN) took more than 31% of the vote, far outperforming Macron’s Renaissance group, which scored 15%. The president immediately called for a snap election — which could see the French parliament switch to a far-right majority, and the appointment of a prime minister from the RN’s ranks. Macron himself will remain in power until 2027— but could find it increasingly tricky to get things done with a hostile bedfellow.

After seven years that have seen Macron give lots of attention to the ‘startup nation’ — a term he coined when he was first elected in 2017 — some see this potential cohabitation as a worrying prospect.

“I don’t think that tech is a priority topic for the far-right,” says Hugo Weber, vice president of corporate affairs and impact at French unicorn Mirakl.

That’s a change of tone from previous government policy, which under Macron has given the digital sector a big leg up — from pushing tax reforms, encouraging private investments and challenging French tech to produce 100 unicorns by 2030. In his tenure, funding for French startups has increased significantly, quadrupling between 2017-2022 to more than $15bn — and making French tech the envy of many other governments in Europe.

Like many others, the RN’s position on tech has a strong focus on digital sovereignty, calling for the protection of European data, the emergence of local players and better application of European and French laws on Big Tech companies. 

The party is keen to show that it has understood the importance of the sector. “[RN leader Jordan Bardella] has absolutely assimilated these issues,” says RN parliamentarian Aurélien Lopez-Liguori, who specialises in digital affairs.

But creating European champions still requires accessing global talent, global clients and global money —  and some say that this is at odds with the RN’s more protectionist policies. For example, immigration is a centrepiece of the party’s proposed reforms. It aims to focus on limiting immigration by giving priority to French citizens when it comes to accessing jobs or implementing stricter conditions to obtain residence permits. 

“[Tech companies] hire people from the US, but also and mostly from Tunisia, Morocco, Lebanon, Vietnam or Brazil,” says Marianne Tordeux-Bitker, director of public affairs at European startup and VC lobby France Digitale.

“There’s a lack of a global vision. Sovereignty must include a global dimension.”

And at a time when Europe is trying hard to catch up with big players like the US and China, Tordeux-Bitker also worries that the RN’s euro-scepticism could endanger the bloc’s ability to compete. 

“We are at a time where we must have the highest level of ambition in Europe, because we are fighting against players… that we shouldn’t necessarily delegate our future to,” she says.

“What I’m worried about is that there will be a downgrading in the level of ambition.”

Lopez-Liguori refutes that this will be the case. “We’ve understood that there is a scaling effect that requires collaborating with the 27 countries,” he says. “We are for European collaboration when it comes to strategic topics.”

— Daphné Leprince-Ringuet, French tech reporter

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🔥 French AI startup Mistral has raised €600m in new funding at a €5.8bn valuation. The round was co-led by new investor DST Global and existing backer General Catalyst. 

🇪🇺 The EU elections have not brought a tremendous U-turn in European politics — a big sigh of relief to most startups. 

• The centre-right, pro-business European People’s Party is the clear winner in the elections so far, according to the latest results, and is likely to continue to rule in a moderate coalition. That should mean stability for startups — and the continuation of tech policies started under the previous mandate. “It is reassuring to see that the current governing coalition of the EU has emerged with a potentially stable majority despite the gains for many far-right parties across Europe,” says Clark Parsons, the CEO of the European Startups Network, a lobby group. 
• Startups remain worried about the growing popularity of far-right groups across Europe, however, especially in countries like Germany, France and Austria. Far-right politicians tend to opt for greater nationalisation and solutions which favour nation-states over the whole European bloc — unlike most startups in the region, which would like to see a more open and united continent. “The high percentage of votes for populist parties is absolutely shocking and shows the destructive forces at work in our democracies. There are no seemingly easy solutions in our world,” says Verena Pausder, CEO of the German Startup Association. “A fragmented continent would sink into insignificance – therefore, it is clear to me. We need not less, but more Europe.”

🇮🇹 Italian Founders Fund, a new pre-seed and seed stage VC based in Milan, has closed €50m for its first fund. 

• It will write initial cheques of €500k-€1.5m into “entrepreneurs with Italian roots and global ambitions”. 

🏫 Warsaw-based Campus AI has raised a $10m pre-seed round from angel investor Maciej Zientara, to build a virtual campus for AI training. The platform’s users can access a virtual world where their avatars can take classes, attend meetings and build communities. The courses are adjusted to their levels and needs. It plans to expand to 10 new markets this year. 

🤔 How many new VC funds does Europe need?

💡 Sifted Scout: 20 energy storage startups to watch. (Sifted Pro subscribers)

💪 Index Ventures’ Danny Rimer: ‘The talent is what’s going to drive the difference’. (Financial Times)

😬 The UK is at risk of losing Europe’s tech crown. (Financial Times)

Paris-based Zeliq, a sales engagement platform, raised $10m in seed funding. Exor Ventures led the round and was joined by Resonance.

Munich, Germany-based ARX Robotics, which makes non-offensive autonomous robotic vehicles for both defence and commercial clients, raised €9m in seed funding. NATO Innovation Fund led the round and was joined by Discovery Ventures and Project A Ventures.

London-based Visibly, an employee training platform for the infrastructure industry, raised €7m in funding. Creandum led the round and was joined by investors including Seedcamp, Brighteye Ventures and Triple Point.

Paris-based kelvin, which builds software to assess home energy renovation projects, raised €5m in funding. Racine led the round and was joined by investors including Seedcamp, Raise Capital, Kima Ventures and Motier Ventures.

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