France is preparing to increase its 4 billion-euro ($4.3 billion) bailout package for tech startups by more than 50% to compensate for an investor retreat, people familiar with the matter said.
The government plans to enlarge a series of financial measures
Many venture capital firms are holding off on new investments in the country, focusing on their existing portfolio, the people said. The government expects U.S. investors to delay or cancel funding plans in France’s tech scene, the people said. The U.S. and Canada accounted for about 15% of French startup funding last year, according to a report from startup analytics firm Dealroom.
The state is anticipating demand for loans backed by the state to double from original estimates to 4 billion euros by year end, the people said. Tax breaks outlined in the initial package may also increase, they said.
A loan program for startups whose fundraising plans were put on hold by the pandemic lockdowns could be approximately doubled, the people said. The French Finance Ministry and state-backed lender
A spokesman for the Finance Ministry said they’re studying the next phase of the program and declined to comment further.
While France started easing lockdown measures on Monday, the outlook for business activity is still rocky. The economy is running 33% below normal levels, only a slight improvement from the 36% reported at the start of the lockdown, according to statistics agency Insee. The package for tech startups is part of a bigger 300 billion-euro package of
To contact the reporter on this story:
To contact the editors responsible for this story:
Amy Thomson, Jennifer Ryan
© 2020 Bloomberg L.P. All rights reserved. Used with permission.
To read more articles log in.
Learn more about a Bloomberg Law subscription.