Yesterday, during the visit of Bruno Le Maire and Cédric O to the Earthcube start-up, the French government announced a support plan for French Tech technology companies. This five-part plan aims to mitigate the effects of the coronavirus crisis. It provides for short-term public support measures in the form of investments, loans and aid so that entrepreneurs and these companies can continue to start up, grow and innovate.

Technological companies have a growing economic weight, particularly in terms of jobs, and are an essential vector of France’s sovereignty. This is why they are at the heart of the economic policy conducted since 2017 with the ambition of making French Tech a leading innovation ecosystem at the global level.

While it was booming with the doubling of fundraising between 2017 and 2019, the ecosystem is strongly affected by the crisis. This is why the Government has decided to implement a short-term public support plan for technology companies, mainly financed by the Future Investment Programme (PIA).

This support plan comes in addition to the emergency measures announced in March, from which technology companies have fully benefited with €3bn in EMPs and €2.5bn in cash advances from the CIR.

The support plan has 5 components:

Support for companies developing sovereign technologies of the future: launch of a “French Tech Souveraineté” fund

French technology companies developing future technologies of a sovereign nature could, in the coming months, fall prey to major foreign players or be overtaken by competitors who are better able to finance themselves.

In response, the Government is launching an investment vehicle managed by Bpifrance with both offensive and defensive purposes, with an initial €150 million available as of now to support these companies, key players in our technological autonomy. Depending on needs, the size of this fund may be increased in 2021 to reach more than €500 million.

Support for the financing of technology companies to get through the crisis and continue to innovate, for around €500 million.

As a result of the crisis and the contraction of venture capital, many start-ups are finding it difficult to access finance despite their high potential. The Government has therefore decided to take the following measures:

• Cash flow support: €80m replenishment of the French Tech Bridge fund, with a total budget of €160m, which aims to finance bridges between two fund-raisings, and launch of a loan offer totalling €100m, distributed by Bpifrance to promising start-ups with the economic status of a company in difficulty and unable to access the State-guaranteed loan (PGE);
• Reload of the PSIM investment fund for €120 million to support new start-ups that won the Global Innovation Contest ;
• Reinforcement of innovation aid schemes: extension of the Innovation Contest (i-Nov) with an additional €20 million for a total budget of €80 million and the launch of a new wave of IA Challenges for €15 million.

Support for the emergence of a new pool of start-ups, particularly high-tech ones, for nearly €200 million.

While the 2008 crisis saw the emergence of today’s major technology companies such as Uber or Airbnb and almost one young researcher in two is considering creating a start-up, several measures to support the maturation and incubation of technology projects are being implemented in the continuity of the Deep Tech plan operated by Bpifrance, so as not to compromise the creation of new start-ups:

• Release of a third tranche of funding of €65 million for SATT, whose mission is to promote the results of academic research;
• Support: launch of a second wave of calls for projects with a €15 million budget for programmes specialising in deep tech entrepreneurship, and creation of the €100 million French Tech Acceleration No. 2 investment fund, which aims to support the development of start-up accelerators, with a focus on high-tech start-ups.

Demand support: inventory of locks to accelerate the digitisation of society and the economy

The health crisis has resulted in massive digital use by French companies and citizens, both in terms of teleworking, purchasing and communication with family and friends. Certain legislative and regulatory barriers have been lifted in the context of the state of health emergency to facilitate digital use, as in the case of telemedicine.

In order to identify the measures to be maintained and the new measures to be taken to accelerate the development of digital uses, the Secretary of State for Digital Affairs is launching a broad call for contributions from the general public and businesses. All the proposals will be analysed in order to feed into a draft law to be presented to Parliament by the end of the year as part of the relaunch. The consultation will be launched in the coming days and will last until 31 July.

Support for recruitment through information measures

As in 2008, start-ups can quickly provide opportunities for young graduates affected by a sluggish job market. However, the professions linked to new technologies are evolving very rapidly and remain little known. In order to improve the orientation of potential candidates and the knowledge of careers in start-ups, an online content platform presenting tech professions and a communication campaign on job opportunities in French Tech will be launched during the summer.

In addition, half of the French Tech Community Fund 2020 (€1 million) will finance local initiatives on the theme of careers and opportunities in French Tech. The call for projects will be launched in July. Particular attention will be paid to projects aimed at audiences that are not well represented in the ecosystem.

Bruno Le Maire, Minister of the Economy and Finance, said :

“Technology companies are at the heart of the economic reconstruction of our country. Supporting them is an imperative because they are essential to innovation and our technological sovereignty. The Covid-19 crisis has shown the growing importance of the digital economy in our societies. We must protect our start-ups and help them to develop in the face of American and Chinese competition. This is our ambition with this support plan”.

Cédric O, Secretary of State in charge of digital technologies said :

“Thanks to the men and women of French Tech, France now has one of the most dynamic innovation ecosystems in the world. However, start-ups are also strongly affected by the crisis while the development of technologies, particularly sovereign technologies, may take many years. With this in mind, the Government has mobilized exceptional business support measures since March, and in particular an emergency plan specifically designed for start-ups. It is now imperative to strengthen and broaden this cyclical support”.

Translated from FRENCH TECH : le gouvernement français dévoile un plan de soutien en 5 volets pour soutenir l’innovation