FILE PHOTO: French Junior Minister for Digital Affairs Cedric O, attends the GovTech Summit 2019 in Paris, France, November 14, 2019. REUTES/Gonzalo Fuentes
PARIS (Reuters) – France will roll out a 4 billion euro ($4.33 billion) liquidity support plan for start-ups in the wake of the coronavirus outbreak, junior minister Cédric O said on Wednesday.
Investments in early stage digital companies have boomed in France in recent years, helped by tax cuts and business-friendly measures put in place by President Emmanuel Macron, who has vowed to turn the country into a “start-up nation”.
“We’re announcing a specific plan to support the liquidity of start-ups,” O told French radio station Radio Classique. “In total it will be a plan for 4 billion (euros).”
The money injected by venture capital funds into French start-ups jumped 30% over the first three quarters of 2019 from a year earlier to 3.9 billion euros, according Dealroom, a data provider.
The French government’s liquidity plan for start-ups includes a short-term refinancing scheme (160 million euros), the early payment of some tax credits (1.5 billion), the accelerated payment of already-planned investments in the sector (150 million) and guarantees over cash flow costs (2 billion).
“Given the global economic situation, there’s a risk that some investors may become wary,” O said, adding that he would meet some venture capital funds this week in a bid to shore up their support for French startups.
Reporting by Mathieu Rosemain, Editing by Dominique Vidalon and Andrew Heavens