France invests in start-ups !

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You are an entrepreneur and want to grow your business in France? Take a look at the different financing tools available here in France to help you in this adventure!

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Panorama

Over the past few years, France has turned into a truly innovative country. Its stellar position in international rankings leaves no room for doubt:

  • 12th country in the 2020 Global innovation index (16th in 2019)[1]
  • 2nd European[2] country in terms of patents issued and 4th at the global scale, with 6,2% of the patents requested to the European patent office
  • 2nd European country in venture capital funds raised.[3]

Since 2013, French Tech – the French start-up ecosystem – keeps proving its success and performance: funds raised by French start-ups have quadrupled in 5 years, thus enabling France to now boast 16 unicorns (June 2021)

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TOOLS

Whether you are a start-upper, an entrepreneur, or curious about the French Tech ecosystem, please know that the French Government is a strong supporter of innovative and disruptive initiatives in France! Discover below a non exhaustive list of the main programs that can help you finance your project:

Tax devices accessible to start-ups

What is it? A 30% tax credit on R&D expenses (transitioning to a 5% credit for sums above 100 million euros).

For which companies? Firms of all types engaged in R&D expenses within the European economic territory, including  R&D-related salary, material purchase or the costs of studies..

In a nutshell: In 2019, the French government  spent over 6,5 billion euros  on this tax incentive.

For more information, click on: Service Public – Research Tax Credit

What is it? A 20% tax credit on the firm’s expenses up to 80;000 euros.

For which companies? Small and Medium-sized Enterprises (SMEs) which engage in specific R&D expenses such as the conception of prototypes or pilot projects for new products.

In a nutshell: In 2019, the French government spent more than 200 million euros on this tax incentive.

For more information, click on: Service Public – Innovation Tax Credit

What is it? A status which enables a firm to be eligible for exemption from tax and social contribution, including on the salaries of its R&D workforce and of the engineers involved in innovative projects.

For which companies? SMEs under 8 years old with fewer than 250 employees and whose R&D expenses represent at least 15% of their deductible expenses.

In a nutshell: in 2019, France spent over 220 million euros on this tax incentive.

For more information, click on: Service Public – Young Innovative or University Business (JEI – GAME)

Financial support for young innovative enterprises

What is it? A subsidy that can cover up to 70% of eligible expenses, up to a limit of 30,000 euros.

For which companies? Young enterprises or individual entrepreneurs having a business creation project in any type of innovative field.

In a nutshell: Since 2014, more than 3600 start-ups have benefited from this tax incentive.

For more information, click on: Bourse French Tech | Bpifrance servir l’avenir

What is it? Subsidy ranging from 50 000 euros to 3 million euros (up to a limit of 65% of the eligible expenses).

For whom? Enterprises with individual or collaborative innovation projects including industrial research and/or experimental development.

For more information, click on: Aides concours – Bpifrance servir l’avenir

What is it? Loan ranging from 50 000 euros to 300 000 euros in order to strengthen the liquidity of a firm and to help prepare a fundraising.

For whom? Innovative SMEs under 5 years old in seed stage and that have already benefited from a public subsidy for innovation.

For more information, click on: Prêt d’amorçage – Bpifrance servir l’avenir

What is it? Loan up to 500 000 euros to help a firm strengthen its liquidity and to back its growth through extra financing

For whom? SMEs under 8 years old that have already successfully raised a minimum  of 200 000 euros in seed stage in the last 3 months. The investor pool should professional qualified investors (venture capital group, equity fund…).

For more information, click on: Prêt d’amorçage investissement – Bpifrance servir l’avenir

What is it? Loan up to 5 000 000 euros that can fund the industrial and commercial launch of an innovation in France or abroad.

For whom? SMEs over 3 years old that can demonstrate their innovative capabilities.

For more information, click on: Prêt innovation – Bpifrance servir l’avenir

Innovation aids targeting deeptech startups

What is it? This support can be a first step to help a company in conquering new markets, increasing its competitive advantages and preparing for the future. It includes a grant up to 90 000 euros that can cover up to 70% of eligible expenses.

For whom? Young enterprises with projects that are disruptive and have a strong technological content.

For more information, click on: Bourse French Tech Emergence | Bpifrance servir l’avenir

What is it? A fund of 400 million euros dedicated to co-investing and encouraging business angels to invest in deeptech start-ups.

For whom? Deeptech start-ups under 3 years old having already convinced a private investor and been identified by qualified prescribers.

For more information, click on: La French Tech Seed – Obligations Convertibles | Bpifrance servir l’avenir

What is it? Support capped at 2 million euros that is a combination of a grant and a repayable advance. It can cover up to 45% of the eligible expenditure for R&D projects aiming at developing a breakthrough innovation with a strong technological content.

For whom? Companies with less than 2 000 employees, registered in France and conducting deeptech technology innovation projects.

For more information, click on: https://www.bpifrance.fr/Toutes-nos-solutions/Aides-concours-et-labels/Aides-a-l-innovation-projets-individuels/Aide-au-developpement-deeptech

Innovation « concours »

What is it? Competition offering a maximum grant of 600 000 euros to selected innovative technology start-up projects. Candidates must already have a proof of concept (POC).

For whom? Any individual who has created his or her business for less than two years, or who has the project to create a technology intensive company on the French soil.

In a nutshell: 73 projects rewarded in 2020, for a total budget of 20 million euros.

For more information, click on  https://www.bpifrance.fr/A-la-une/Appels-a-projets-concours/Concours-d-innovation-i-Lab-22543

What is it? A highly selective competition dedicated to research, development and innovation projects carried out by start-ups and SMEs with total costs ranging from 600 000 to 5 million euros over a period of 12 to 36 months. The project must cover one of the 8 themes eligible for the competition, and may be financed up to 45% with a mix of grants and repayable advances.

For whom? SMEs and start-ups engaged in innovative projects that have the potential to become leading companies in their field.

In a figure: 135 projects were rewarded in 2020 for a total of 76 million euros.

For more information, click on: https://www.bpifrance.fr/A-la-une/Appels-a-projets-concours/Appel-a-projets-Concours-d-innovation-i-Nov-38041

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A FEW KPIs

The good results of the French tech companies are the outcome of a significant investment from the French Governement in innovation, in the start-up ecosystem and in research.

Between 2008 and 2018, domestic spending on research and development increased by 1.6% per year, a faster pace than French GDP, to reach 51.8 billion euros in 2018[1]. This financial investment and the quality of French R&D infrastructures have also made it possible to develop a numerous and competent researcher pool: France counts 295 000 researchers, an equivalent of 9.6 researchers for 1000 active workers (against 7.7 at the European level), of which 28% are women.

With the 2021-2030 Research Programming Act, France has committed to maintaining research and innovation in its priorities by planning to dedicate 3% of its national budget to it, with an additional 25 billion euro over the next ten years.

With Programme Investissement d’Avenir 4 (2021-2025), France also plans to invest 20 billion euros in higher education, research, innovation and innovative companies.

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