Can institutional partners play a role in helping deep tech startups achieving their scale-up transition? La French Tech’s national team, known as the French Tech Mission, sits administratively inside French government within the Ministry of Economics and is in charge of supporting startups in their acceleration. It also has a support activity at the private/local level in order to support French companies at the international level. In the last part of the article dedicated to how to scale a deep tech startup, Louis Fleuret, Adjoint Director to the Mission French Tech discusses the organization’s activities and how the French government integrates startups in their economic growth strategy.
-Fannie Delavelle: La French Tech is key tool from the government to reach the goals of the “France 2030” plan, can you share how deep tech startups allow us to reach the goals of “France 2030” and what initiatives “La French Tech” has launched in order to support deep tech startups?
-Louis Fleuret: what’s important when it comes to deep tech startups is to consider strategic stakes such as reaching goals of the “France 2030” plan. On an international scale, the deep tech sector puts all the continents at the same level. Deep tech has in a way reshuffled the international competition unlike the digital industry in which the US were ahead and Europe always trying to catch up. In deep tech, we can now imagine batteries being made in Europe and what’s interesting is that in this new order, we can build deep tech startups in France and in all Europe that can become leaders on a global scale, which was difficult to picture 10-20 years ago.
Build specific programs: French 2030, which is the big plan of investment of the French government has allocated substantial funds to emerging actors such as startups operated by bpifrance. Our role in helping these deep tech startups is to bring the state’s resources via programs similar to the “Next 120” initiative. One in ecological transition “Green 20”, one in agriculture “Agri 20” and an upcoming one on digital sovereignty and health. What we do is that with every company, we look at how the French state can help. We use different fast tracks such as customs, taxes that are fitting to the startup model. We activate our network to promote and showcase the deep tech startups in events such as Hello Tomorrow to show that La French Tech is also about deep tech startups and it’s important to boost their visibility.
Promote and Use Startups as part of the country’s diplomatic strategy: We also include them in diplomatic missions because it is important that startups can be included in France’s international relations. When a minister goes abroad for a diplomatic mission, it is important that he also brings corporate, ETI, SME but also startups to strengthen France’s international business partnerships.
Connect young and seasoned entrepreneurs/experts: we also facilitate the exchanges between successful deep tech startup and news ones so they can share their experience. For example, Insect can help startups in food and agritech. We also organize job meetings. Financing these startups is important but providing institutional and legal counsel is important too.
-F.D: What are the programs that you are setting up for facilitating the international expansion of these companies? and what are the best practices from other countries that you would like to see in France?
-L.F: Finding the startups that will help growing the French economy: we took four key tracks from the “France 2030” that are sectors or technologies that are essential for the French economy, which are ecological transition, agro-food, health and digital sovereignty (IA, cloud, quantum). Either we have already selected the companies and launched a dedicated program or we are selecting the companies. What is interesting is that at the international level, we are highly promoting these companies, which gives them a higher status. And the other half of the programs are directed towards everyone but most of the companies are not aware that these programs exist. For instance, if a deep tech startup wishes to go to Japan that a very high technological and industrial level, all you need to do is to contact La French Tech Tokyo and they will get in touch with you and give you valuable contacts. There is a large community of French-speaking entrepreneurs in Japan and it’s open to everyone.
The increase of external growth: I’m not an entrepreneur but what I have observed is that in the digital or deep tech companies, there is a dynamic of external growth to go abroad that is very big. We see French startups that buy foreign startups in Germany, the US, Israel, or Italy, which allow them to find team members, disruptive technologies and new business.
External growth is a trend that is used more and more by funds. Some VC funds even allocate funds for potential external growth opportunities. Starting from zero can be a challenge but buying out a company that has the same client target but with a different technology can tremendously accelerate a startup's revenue. It is the case for a lot of digital companies. For example, Insect has bought a Dutch startup. Innovafeed has bought an American startup. Nowadays French scale-ups buy out foreign companies. It was not the case 10 years ago, but during this period, we saw the internationalization of the VC funds.