Is Paris Overtaking London As Europe’s Top Tech Hub?

For years, London has reigned supreme as Europe’s leading tech hub. But now, it seems that Paris is coming for its crown.

New data by Dealroom reveals that tech businesses in the French Capital are growing faster than those in London. This marks a new era in the ongoing startup rivalry between the two cities.

So, what has changed, and what does this mean for the UK?

Paris Takes The Lead

According to Dealroom’s 2025 Global Tech Ecosystem Index, the combined enterprise value of Paris-based startups grew 5.3x between 2017 and 2024, compared to a 4.2x growth in London over the same period.

That means that the number startups in Paris is not just increasing, they’re actually growing at a faster rate than those in London.

When it comes to fundraising, in 2024, Paris startups raised $7.8 billion, with almost half of that going into artificial intelligence startups like Mistral AI, Poolside and Electra.

Whilst, London startups raised more in value ($11.3 billion), these companies saw less growth off the back of these raises, which could be a sign of the UK’s slower economic climate.

Why Is Paris Pulling Ahead?

There are a few reasons why Paris is pulling ahead, but a big part of it is AI.

According to the report, nearly 50% of all VC investment in Paris last year went to AI startups showing a huge commitment to the sector. In addition to this, Paris now ranks 5th globally as an AI hub, the only European city to make it into the global top five but closely followed by London, Stockholm, Munich and Amsterdam.

But why is Paris seeing such a boom? Well, apart from nurturing talent, France’s President Emmanuel Macron has created a business environment that helps make the country a “startup nation”.

His government has historically made France pro-innovation, with tax-incentives, funding support and hosting events like the Choose France summit which drew in billions of Euros of investment. (Sifted).

In addition to this, VivaTech, one of the world’s biggest tech conferences, will be held in Paris next month, attracting even more interest to the city.

But it’s definitely not solidified its lead let. According to data by Pitchbook, French startups raised just €1.4 billion in Q1 2025, a 36.4% decrease from the same period in 2024, marking the country’s worst quarter for venture capital in five years.

Other critics are saying that the new 2025 French budget is actually less business-friendly than it was before, with new tax incentives and spending cuts introduced, which could slow does growth even further.

What Could Be Slowing London Down?

So, London is slowing down. But why?

Well, as of April 5th, new government tax changes have come into effect, making it slightly more difficult for companies to scale. Whilst it’s not clear just how much of an impact these are having, they are certainly making life harder for founders.

Some new policies include:

• Raising national insurance contributions from 13.8% to 15% for employees. This makes hiring new staff more expensive for startups.
• Capital gains taxes have changed, affecting the level of relief entrepreneurs can claim, potentially lowering financial incentives for founders and investors.
• The government quietly shelved a £1.3 billion package designed to support the growth of AI companies (BBC).

Commenting on this, AI and Data Lawyer, Matthew Holman shared: “London remains one of the most attractive places to launch, build and grow a tech and AI business. It is a little bit unfair to suggest that Paris has taken London’s crown, especially because London raised more AI start up investment last year than Paris. London raised $3.5Bn compared to $2.4Bn raised in Paris.

“However, there are reasons to be concerned. Paris is growing very quickly and, on the continent, is miles ahead of its next-nearest competitors (Stockholm and Munich). The UK government must not be complacent with London’s tech appeal.

“A lot of the potential to grow and scale quickly in London is closely tied to the UK’s ability to attract and retain tech talent, and that in turn is connected to making sure the UK is a competitive place to invest. The UK government is planning to make laws more attractive for training generative AI on copyright materials, but these measures are not yet law and have met significant resistance from the creative sectors.

“In order to regain its crown, the UK needs to lead the way with investment, modern and effective legislation and highly responsive and engaged regulators who can make it easy for tech and AI start ups to know what they can do. If we can do this, the UK stands a good chance.”

Where Is London Leading?

But even against a more difficult tax environment, London is still definitely in the game.

In fact, London startups still raised more venture capital in 2024 than those in Paris ($11.3 billion vs $7.8 billion).

London is also home to more unicorns. According to Sifted, London is home to 38 unicorns, whereas Paris has 23.

What Next For London?

Whilst Paris overtaking London on growth is certainly a great accolade for the French capital, the race to the top certainly isn’t over.

What it does show, is that government policies do directly influence businesses and quickly, meaning it might be time for the UK to rethink how it might be able to spur on British startups.

And for the rest of Europe it just shows – the race is far from over and the crown is anyone’s to play for.