France announced on Tuesday (8 February) that it has raised more than €3.5 billion to invest in the tech ecosystem, amongst plans to rely on European start-ups to regain the continent’s digital sovereignty.
The second day of the conference on digital sovereignty in Europe, organised in Paris by France in its capacity as rotating president of the Council of the EU in the first half of 2022, was dedicated to the “Scale Up Europe” initiative.
Launched in March 2021 by the Secretary of State for Digital Affairs, Cedric O, and the European Commissioner for Innovation, Mariya Gabriel, the collective brings together nearly 300 advanced start-ups and scale-ups, investors and experts whose objective is to reflect on ways to develop the technological champions of tomorrow.
Last June, the collective submitted a report to Emmanuel Macron which included a series of 21 recommendations. The President of the Republic agreed on the objective of achieving “10 companies worth €100 billion by 2030”.
It is on the back of this work and in the light of strategies already deployed at national level that France – within the framework of the Council presidency – has announced several initiatives to make the ecosystem of European tech start-ups a lever for regaining Europe’s digital sovereignty, boosted by very good results in recent months.
“In 2021, Europe has created more unicorns than China”, said Cédric O, counting 321 European unicorns – start-ups valued at more than €1 billion – and 26 decacorns – start-ups valued at more than €10 billion – in Europe by the end of 2021.
“In the race with the US and China, the right level is the European level,” he added.
“Europe should not be afraid of its power. We are the world’s largest market,” said Economy Minister Bruno Le Maire, alongside his German counterpart Christian Lindner.
A new “fund of funds”
At the conference, Le Maire unveiled the launch of a new “fund of funds”. Managed by the European Investment Fund (EIF), a subsidiary of the European Investment Bank (EIB), it will be designed to top up existing venture capital funds and improve their financing capacity.
The aim is to create 10 to 20 European funds with at least €1 billion each – the continent currently has only two.
“There is no shortage of financial resources, but the financial resources that are properly European are rather directed towards the early stages of development of start-ups,” Philippe Huberdeau, secretary-general of Scale Up Europe, explained to EURACTIV.
It is precisely these last phases, the “late stage”, that should now be the focus of attention, he said, as they require the easy mobilisation of large amounts of money, which American funds, for example, can afford.
The Minister for the Economy indicated that an initial envelope of €3.5 billion will be injected into this new fund. Broken down, €2 billion will be put on the table by Berlin and Paris – half of which as part of the massive ‘France 2030’ investment plan on the French side, Cédric O’s office told EURACTIV – €500 million by the EIB and €500 million by the French Public Investment Bank (BPI).
The aim is to quickly reach €10 billion with the participation of other European countries in the coming weeks, the minister said.
Following the example of the “Tibi initiative” in France, the idea behind these public investments is to create a leverage effect, aimed at private players so that they, in turn, can contribute to the selected funds.
This second day of the conference was also devoted to attracting talent, as the very strong growth of European start-ups gives rise to an increasing need to recruit, especially within the pertinent skillsets.
“This is the price of success. When the ecosystem reaches a certain level of maturity, you have to find all these people with the necessary skills,” Huberdeau said, noting that “very good talents are mobile” and that “you have to offer them the best ecosystem”.
In order to attract talent, and get them to stay, in January 2017 France launched the “French Tech Visa”, a simplified procedure for non-European investors, founders and employees of startups who want to settle in France. The scheme is not isolated in Europe.
A “European one-stop shop” is to be set up by the end of the year to give visibility to all similar schemes at EU level for talent wishing to move to the continent and to strengthen cooperation between States on this subject.
16 Member States will take part in this platform, said Pascal Cagni, president of Business France, the French agency in charge of international business development.
Finally, the European Innovation Council (EIC) will focus on deep tech through a new work programme.
Inaugurated in March 2021, the EIC focuses on research into emerging technologies and has a pilot accelerator project and a dedicated investment fund. For the period 2021-2017, its budget is €10 billion, which can be injected in the form of grants or equity investments of up to €15 million.
The EIC will also pilot the “Scale Up 100” programme, which will bring together the 100 most promising deep-tech scale-ups by offering them guidance and support for their development – similar to what France is doing within its Next40/120 label.
[Edited by Luca Bertuzzi and Nathalie Weatherald]