With French Tech Finance Partners, the government wants to coordinate investments in startups
At the beginning of the year, the government wanted to bring technology investors together under the French Tech Finance Partners (FTFP). The new body, introduced by Jean-Noël Barrot, Minister for Digital Transition, was created to enable them. “structured dialogue” among themselves and with the government. The aim is to identify barriers to business financing in France and the means to overcome them.
The French Technical Finance Partners unites sixteen members in equal numbers, participating in all stages of financing and in all industries. Among them are Orange Ventures, Euronext, Partech or even EQT Ventures, banks, but also associations and organizations such as France Invest and France Digitale.
Investors also focused on Paris and not enough on deep technology
The first meeting took place on January 3. This allowed us to identify sites to work on. The first is to try to solve the problem of a very (too) concentrated funding fabric in the capital. “There are cities like Bordeaux, Marseille, Lille or even Lyon that have succeeded in creating an ecosystem of active investors, but still lag behind in maturity compared to Paris. We need to get them off the ring road of all the big cities.”Maya Noël, general manager of France Digitale, an association of startups and investors that is part of the FTFP, explains.
“This is a long-standing observation that led us to create France Digitale Tour six years ago: we travel with investors to different regions of France”.he adds.
The second issue FTFP will work on: deep tech, a sector with fewer funders because it requires a lot of start-up capital, especially the long R&D times for funding.
Also on the agenda are ideas on how France can make itself more attractive to foreign investors. “The government’s Mission French Tech initiative made it possible to work on the image of the French Tech brand and contributed to giving French startups more visibility and legitimacy at the international level. From a regulatory or legislative perspective, the question becomes: how do we control foreign investment without slowing it down?.
The Next40 criteria also focused on fundraising
The last project that will be one of the main works of France Digitale: the revision of the Next40 and French Tech 120 criteria. In this regard, the association has very specific proposals. During the “unicorn craze,” he decried in a forum that the criteria focused too much on funds raised and not enough on turnover and jobs created.
FTFP members have until this week to decide which topics they want to contribute to. Their work and first proposals are due back to the government in the spring.
How could the government take concrete action? Maya Noel reflects on the 2019 government (or even presidential) initiative. Emmanuel Macron went directly to negotiations with institutional investment funds, and thereby received 6 billion euros in venture capital. “It was very positive but very focused on growth as we realized that investments in this segment are less. This created a small evacuation effect in the early stage part. We would like to start such a new initiative, but this time the money should be well distributed. The arrow in Deeptech may also be interesting”he continues.
Too much initiative?
Some members, speaking on condition of anonymity, condemned it Gallery “a futile venture that risks weakening the intermediate organs”. A criticism that Maya Noel, general manager of France Digitale, understands. “This body formalizes the work we have been doing for years. There are about a dozen funds around the table, we work with about a hundred investors. When this initiative was announced to me, I thought, are we going to have to do it? Do it twice. I am not afraid of the weakening of the intermediate bodies, but they are with this body in parallel, they should continue to be recognized for their raw materials and all their work.”.
According to him, the main issue is to ensure that budget pockets allocated for business financing are implemented wisely so as not to break the financial chain. There should be business angels, seed stage institutional funds, then Series A, B, C investors, growth, potential exits and IPOs that accompany entrepreneurs in their creation…”For this reason, it is interested in bringing together financial partners. French Technical Finance Partners will allow us to work collectively and intelligently in this financing chain.”
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