After a complicated 2020 with a slowdown in activity due to the health crisis, the French software industry is clearly moving forward in 2021.
According to the 17th Truffle 100 ranking, the companies on the list will show a 10% growth in their activity in 2021.
“The year 2021 marks the sixteenth year of growth for the software publishing sector in France, which has a turnover of 22 billion euros. This growth is all the more significant as the industry has not slowed down in 2020 and the players economic, barely emerging from the health crisis, are now suffering major macroeconomic shocks: the war in Ukraine, inflation but also the rise in interest rates. which resist”, comments the venture capital firm.
Eroded profitability
However, some clouds obscure this picture. For two years, the sector has suffered an erosion of its profitability, which now stands at 9.1% of turnover, the lowest level since 2019. In question, massive investments by companies, especially in the cloud.
In addition, companies are suffering from an erosion of margins (which hinders self-financing), difficulties in accessing financial markets and the growing reluctance of the venture capital market (which hinders external financing).
As such, 20 companies in the Truffle 100 are publicly traded, the lowest level since 2004, and only 22 publishers have a venture capitalist (compared to 29 in 2020).
Finally, as in many sectors, French software companies have difficulties in recruiting staff.
Despite everything, “software publishers are mostly optimistic about 2022: two-thirds of them foresee a growth of more than +6% in their business, with the Cloud in particular being the main technological trend pulling the market this year” , highlights Truffle.
Source: BFM TV
