KfW and Bpifrance support German-French Cooperation and will strengthen the venture capital market
News from 2017-07-18 / Group
France and Germany have renewed their commitment to the implementation of a Franco-German project to remedy the risk capital market failure for investments above EUR 10 million: in this way, Bpifrance and KfW will sign in 2017 an agreement for co-investments in French-German venture capital funds on both sides of the Rhine, with the objective of a first project financed no later than mid-2018. Such an initiative, which would mobilize up to EUR 1 billion of public and private investment, will enable the best national venture capital players to become pan-European, benefiting the growing startups of all sectors: digital but also Biotechnologies, environmental technologies etc.
This initiative will have a major impact on both growth companies and the venture capital ecosystem as it will:
- Invest bigger tickets to meet the needs of scale up of fast growing start-ups
- Maintain in Europe the mature start-ups currently targeted by American or Chinese players
- Link them with cross-border partners in complementary markets / sectors / technologies and likely to generate new growth opportunities at the regional level
With regard to the French and German investment ecosystem:
- Develop operational synergies and the pooling of expertise between the Bpifrance and KfW partner funds
- Promote the emergence of new funds with recognized pan-European sectoral expertise
- Strengthen European venture capital managers (French and German) capacity to raise funds from international LPs (in particular the US)
Nicolas Dufourcq, CEO of Bpifrance, says: “We welcome this joint initiative with KfW; It’s the first example of a major innovation-capital program between two large European countries. Once launched, we will propose to the European Investment Fund and our European partners active in venture capital to join it.
Dr Günther Bräunig, Member of the Executive Board of KfW, states: "The initiative of Chancellor Merkel and President Macron is vital for further strengthening Franco-German cooperation. KfW and CDC Group (Caisse des Dépots, Bpifrance) as main national promotional banks and Institutions will support this initiative with joint investments and knowledge exchange to further broaden the economic cooperation within the European Union."