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.
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“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?’”