President Macron secures a €5bn investment to help the country’s start-ups survive the coronavirus pandemic and maintain cash levels in between their fundraising.
French insurers and asset managers have pledged €5bn in investment for home-grown tech firms. The undertaking is part of President Emmanuel Macron’s push to nurture France’s fledgling start-ups into a cohort of highly valued heavyweights.
The investors, mainly banks and insurers, include BNP Paribas’s insurance unit, Natixis, Axa, Aviva, and Allianz.
Under Mr. Macron’s three-year plan, French insurers and asset managers have agreed to invest more money directly into start-ups or to channel their investments through established venture-capital funds.
They can also plough money into a fund set up by France’s national investment bank Bpifrance, French officials said.
Other measures taken by the government include eased regulations and tax cuts. The long-term goal is the creation of a European version of the tech-heavy Nasdaq index, if possible based in Paris, the President’s office said.
“We need to create our champions,” Mr. Macron said, adding that his goal was to have at least 25 French tech unicorns by 2025, referring to companies with valuations exceeding €1 billion.
The long road ahead
There’s still a long way to go before Mr. Macron’s dream can become reality.
In the first half of this year, France’s four growth equity operations raised €580m, data compiled by EY show. That compares with five operations in Germany reaching €1.13bn in the same period, and seven operations in the U.K. that amounted to €2.39bn.
To see a Nasdaq-like index in Paris, experts say, Macron would have to create smoother exit options, a tech-friendly stock exchange, and harmonized Europe-wide regulations.
Macron lamented the French venture capitalists’ lower appetite for risk, compared to their British and American counterparts.
“When you talk to a U.S. or U.K. VC, they say, ‘How can we put in more money to move faster?’” says Mr. Gordon. “A French VC says, ‘How are you going to make money, and how soon?’”