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 (250 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.
(This story corrects third sum to .. 250 mln euros ..not.. 150 mln euros in paragraph 5)
Reporting by Mathieu Rosemain, Editing by Dominique Vidalon and Andrew Heavens