Emmanuel Macron, president of France, has announced that institutional investors are ready to loan $5.5 billion to assist tech startups over the next three years, the Financial Times reported Tuesday (Sept. 17).
International investors are also being tapped with the goal of nudging new tech firms in France to grow from startup to “multibillion-euro companies.”
Macron said in a speech ahead of France Digitale Day planned Wednesday (Sept. 18), that $2.2 billion will be earmarked for late-stage investments.
“Our desire is to make France the leading ecosystem in Europe,” said Cédric O, France’s minister for the digital economy, in an interview with FT. “We want to create many more unicorns [start-ups with a value of more than $1 billion] in the next few years. Today there are seven and we are targeting 25 unicorns by 2025 and companies that are worth €5 billion [$5.5 billion], €10 billion [$11 billion], €15 billion [$16.6 billion].”
Over the course of the last few years, France’s public investment bank Bpifrance was instrumental in contributing funds. The private sector is now being tapped to encourage French venture capitalists to participate in late-stage funds.
“The French government seems to have understood that you can’t just fund start-ups,” Walid Khiara, a managing director at Rothschild & Co. in Palo Alto, told FT. “Capital is needed across every part of the spectrum, and this latest push should help ensure the next stage of growth for successful start-ups, and secondly provide more opportunities to give investors an exit.”
A proposed “digital tax” in France was instituted in July despite U.S. investigations seeking to determine if the measure unfairly targets American firms. Tech firms would have to pay a 3 percent tax on sales — not profits — in France. The tax would be applied retroactively from the start of the year. France claims the tax’s aim is to make sure firms are paying their fair share in nations where they lack a big physical presence.