France refines its plan to support startups

A few days ago, the French government detailed different measures as part of its support plan for startups. France already announced a $4.3 billion (4 billion) plan back in March. The new announcements are more about refining and adding some additional measures.

The French government wanted to act quickly when it made its initial announcement in March. In addition to the widely-used short-time working scheme to avoid layoffs, here's what they announced in March:

• Startups that were in the process of raising a new funding round could raise a bridge round from public investment bank Bpifrance through the Programme d'Investissements d'Avenir. Bpifrance put $89.4 million (80 million) on the table, private investors announced that they'd co-invest as much as $89.4 million (80 million) as well.
• Startups can get a government-backed loan that are specifically tailored to the weird business model of startups: even if you don't generate revenue, you can get some liquidity support as long as you match the criteria. Startups can borrow as much as two years of payroll for employees based in France or 25% of annual revenue - whichever is higher. This represents $2.2 billion (2 billion).
• Startups can get tax returns more quickly, and VAT returns in particular. This is a liquidity injection of $1.6 billion (1.5 billion).

That was already on the table. And here's what's new:

• Bpifrance is launching a new investment fund for key technology companies. The idea here is to support French startups so that they don't get acquired by big foreign companies too quickly or they don't fall behind when it comes to international competition. Bpifrance will invest $167.6 million (150 million) as part of this fund. It could be extended in 2021 to reach $558.77 million (500 million)
• The bridge round program from the French public bank has been doubled with another $89.4 million (80 million).
• Startups that don't fit the bill and can't get a government-backed loan can now get a loan from Bpifrance directly. Bpifrance will lend $111.8 million (100 million).
• Capital-intensive tech startups working on tech breakthroughs will be able to raise money more easily from Bpifrance as the government has injected $173.2 million (155 million) in various vertical-specific funds (Programme de soutien a l'innovation majeure, i-Nov, AI challenge...).
• Deep tech startups and deep tech accelerators will receive as much as $223.5 million (200 million) through a technology transfer fund and a second French Tech Acceleration fund.

As you can see, the support plan involves a lot of complicated investment funds, mostly managed by Bpifrance. It's clear that the investment bank wants to help as many startups as possible, from deep tech to marketplaces facing some liquidity issues.

The new investment fund focused on helping startups that could get acquired by foreign companies is an interesting move. Some will criticize the initiative, saying startups need to stay hungry to stay ahead of international competition. Others will say that Chinese and American companies also sign lucrative contracts with their respective governments.