France is now among the top three destinations in Europe for fintech investors, new data shows, having narrowly overtaking Sweden for the first time.

French fintechs have raised a total of €1.9bn so far this year, behind only the UK and Germany. That’s more than double the amount France attracted in 2020, and means it now tentatively ranks ahead of Sweden — whose fintech sector has raised €1.7bn this year, according to Dealroom.

The investment milestone follows a concentrated effort by French politicians to make the country into a startup nation, with the local government dedicating $4bn to support young businesses, as well as issuing special tech visas.

Some of the biggest funding rounds this year were concentrated in the likes of Qonto and Lydia, which raised $131m from large foreign investors including Accel and Tencent.

France also minted its first fintech unicorn this year in Ledger.

Heavyweights like Sequoia have also invested in France for the first time this year, too.

• Check out the hottest French fintechs to watch, 2020

The Paris hotspot

France’s fintech story has been a slow bloomer.

But today, Paris is home to over 1.2k fintechs. And founders say raising money is getting easier, with Paris now a ‘go to’ destination for investors in financial services.

“Every big investor now stops in Paris”, the CEO of Lydia told Sifted earlier this year.

Societe Generale exec Claire Calemejane says the French government has been instrumental here, investing heavily in making Paris a disruptive financial hub with a friendly regulator.

“We have a very strong fintech sector. Fintech is actually the only sector that has a dedicated louvee, it’s represented by France Digital,” she told Sifted earlier this year, adding that a string of exits and second-generation founders have boosted its maturity.

“Every big investor now stops in Paris.”

France is also carving out its own niche within fintech, she says, with an emphasis on AI and crypto — including the NFT craze.

“The French ecosystem has come a long way, and even if a lot of fintechs are still early stage, they’re starting to be really solid. The next step is scaling,” says Global Founders Capital’s David Sainteff.

The fallout from Brexit has also strengthened France’s position. Last year, French minister Cedric O also told Sifted he expects Paris to overtake London as the European capital for fintech.

“The financial sector is one where we can take advantage of Brexit,” says O. “We see the pace of fintech growth in France accelerating. The French quality of life and the quality of Paris as a finance hub are factors.”

Isabel Woodford is Sifted’s fintech correspondent. She tweets from @i_woodford