France refines its plan to support startups – TechCrunch


A few days ago, the French government detailed various measures as part of its plan to support startups. France had already announced a $4.3 billion (4 billion euro) plan in March. The new announcements focus more on refining and adding additional measures.

The French government wanted to act quickly when it made its initial announcement in March. In addition to the short-term work program widely used to avoid layoffs, they announced in March:

  • Startups being lifted from new funding cycle could help lift bridge of public investment bank Bpifrance Future Investment Program. Bpifrance put $89.4 million (80 million euros) on the table, private investors announced that they would co-invest as much as $89.4 million (80 million euros) as well.
  • Startups can get a government-backed loan that are specifically tailored to the strange business model of startups: even if you don’t generate revenue, you can get some liquidity support as long as you meet the criteria. Startups can borrow up to two years of payroll for employees based in France, or 25% of annual turnover, depending on the highest amount. This represents $2.2 billion (2 billion euros).
  • Startups can get tax returns faster, and VAT returns in particular. This is an injection of cash from $1.6 billion (1.5 billion euros).

It was already on the table. And here’s what’s new:

  • Bpifrance launches a new investment fund for major technology companies. The idea here is to support French startups so that they are not acquired by large foreign companies too quickly or that they do not fall behind in terms of international competition. Bpifrance will invest $167.6 million (150 million euros) under this fund. It could be extended in 2021 to reach $558.77 million (500 million euros)
  • The French public bank’s bridge round programme has been doubled with another $89.4 million (80 million euros).
  • Startups that do not match the bill and cannot obtain a government-backed loan can now obtain a loan from Bpifrance directly. Bpifrance will lend $111.8 million (100 million euros).
  • Capital-intensive technology startups working on technological breakthroughs will be able to raise funds from Bpifrance more easily as the government $173.2 million (155 million euros) in various vertically specific funds (Major Innovation Support Program, i-Nov, AI challenge…).
  • Deep technology startups and deep technology accelerators will receive as much as $223.5 million (200 million euros) through a technology transfer fund and a second French Tech Acceleration fund.

As you can see, the support plan involves a lot of complicated investment funds, mainly managed by Bpifrance. It is clear that investment banking wants to help as many startups as possible, from deep technology to markets facing certain liquidity problems.

The new investment fund focused on helping startups that could be acquired by foreign companies is an interesting initiative. Some will criticize the initiative, saying that startups must remain hungry to stay ahead of international competition. Others will say that Chinese and American companies also sign lucrative contracts with their respective governments.


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