France's Macron bets on private-sector funding to fuel startup push

PARIS: France aims to raise $5.53 billion in funds from private-sector investors to give French startup companies a leg up and help the most promising ones grow further, President Emmanuel Macron said on Tuesday.

Macron, who came to power in mid-2017 on a business-friendly platform, has sought to foster investment in France’s tech scene, including through high-profile conferences gathering foreign venture capitalists and French startups.

“The capital battle is essential. If we want to win this battle, we have to succeed at raising more capital, faster and stronger,” he told an event at the Elysee presidential palace on Tuesday.

France is jostling with other European countries to lure investors and budding tech companies and chip away at London’s lead as a startup hub, as Britain edges closer to leaving the European Union on October 31, potentially without a deal.



Investments in French startups have boomed in recent years on the back of lower taxes on capital income and high expectations for a more business-friendly administration under Macron, a former investment banker.

Financing in the sector leaped 41% to 3.6 billion euros in 2018 from a year earlier, according to consultancy Ernst and Young, putting France in third place in Europe after Britain and Germany.

But despite a growing number of digital companies, France has yet to produce any significant tech companies able to rival those from Silicon Valley.

The government now wants to boost larger startups with a chance of making their mark internationally, by trying to develop more so-called unicorns or firms valued at over $1 billion.

“We have to help foster tech giants so they can compete on the same level as Uber or Airbnb,” France’s minister for digital affairs, Cedric O, told Reuters in an interview before the event at the Elysee.

US-based ride-sharing service Uber listed on the New York Stock Exchange earlier this year, and home rental site Airbnb is expected to go public next year.

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France wants to lure unicorns from elsewhere in Europe, including Italy and the Netherlands, and encourage them to list their shares in Paris, O said.

The 5 billion-euro funding effort will be made over the next three years, Macron said.

The financing will be collected from leading French institutional investors. Some 2 billion euros will be earmarked for late-stage startups, with the rest to be spent on those that are already listed.

A French official said French insurers AXA SA  and CNP Assurances SA  as well as asset managers Amundi SA and Natixis Investment Managers were among the institutional investors that pledged to contribute.

Macron is juggling a complex balancing act as a champion of tech startups, as France has also been a big advocate of imposing an EU-wide digital tax on tech companies. It has brought in a levy domestically, for now, causing friction with US President Donald Trump. ($1 = 0.9038 euros)