Macron vows to boost French startups to avert funding slowdown
Bloomberg
French President Emmanuel Macron has vowed to boost investment in the nation’s startups in an effort to counter some of the slowdown in venture funding affecting other tech hubs.
Green and industrial tech companies are a key focus for France and will benefit from additional public funds, Macron said Monday evening at an event gathering CEOs and VCs at the Elysee Palace.
Macron touted the use of public funds aimed at financing innovative fields like AI or quantum technologies. Some “11 billion euros have been pledged already, factories have been launched, but it is necessary to accelerate, it’s a race,” he said, noting that an additional 5 billion euros, or $5.3 billion, was planned for the second phase of his “France 2030” program.
The French president said early stage financing should also be reinforced by getting the French public to invest in innovative startups. The government has been exploring creating a French version of the UK’s Seed Enterprise Investment Scheme, which offers tax breaks to startup investors.
Macron called on French tech CEOs to put aside worries about job cuts at larger companies or difficulties in raising capital.
“There is a real adjustment, and the context is harder,” Macron said. “But it brings opportunities, as always.”
French startups added 15% more jobs last year, according to data from industry association Numeum, with much of the growth coming from green and industrial tech companies.
“We doubled our staff last year to 350,” said Clement Ray, chief executive officer at Innovafeed, a startup producing insect-based protein used for animal feed that just joined the “Next 40,” France’s list of its most promising startups.
Funding for French startups rose 17% to 13.5 billion euros last year while falling in the UK and Germany, an EY barometer shows. However, the surge was partially fueled by a series of big funding rounds nearing 500 million euros in the first half of 2022 and France remains far from closing the gap with London, which still attracts double the investment.
Last week, France, Germany and Spain each pledged 1 billion euros for the European Union’s “Tech Champions Initiative,” a fund of funds that will back Europe’s venture capital firms to create regional scale-ups.
France is building on ten years of policies aimed at cutting red tape to attract foreign investors and founders in the country, as well as measures to boost investments in local startups. Some of this work is paying off and making Paris an international hub, observers say. Roxanne Varza, the director of Station F, an incubator hosting 1000 startups, has seen a growing trend in U.S. tech employees wanting to relocate to Paris.
“I am contacted by former employees from the likes of Uber, Airbnb or Spotify, who are looking for a better living environment, and see a Parisian ecosystem that is more and more dynamic,” she said. The fact that these product managers and business developers are non-French speakers is new, and a sign that French startups are now global, Varza added.