France increases its Tibi tech-funding model by €13 billion.

      France has secured an additional €13 billion for its technology sector, with minimal cost to the state. This funding is provided through Tibi, a program designed to encourage French insurers and pension funds to support venture and growth funds rather than opting for safer, lower-yielding assets. The finance ministry unveiled this third phase during the VivaTech event on Friday, aiming to reach a total of €15 billion by 2030.

      How Tibi operates

      The smart aspect of Tibi is that it is not a state fund and does not create a new public money pool. Instead, Paris successfully persuades large institutional investors to invest their own capital, subsequently designating qualifying funds with a Tibi label. The Treasury decides which funds receive this endorsement.

      Thus far, it has been effective. The initial phase, running from 2020 to 2022, aimed for €6 billion and attracted €6.4 billion. A government audit revealed that the initiative nearly tripled annual investment in French tech at a minimal cost to the budget, aiding the growth of companies like Doctolib, Exotec, and BlaBlaCar.

      New funding sources and investors

      This phase expands the initiative's scope. In addition to private insurers like AXA and Groupama, the ministry has engaged state-associated entities such as rail operator SNCF, transport group RATP, satellite company Eutelsat, and defense firms Naval Group and MBDA. The involvement of these defense companies is significant, as institutional investors have typically shied away from defense technology. This indicates a notable shift, with half of the new funding allocated for deeptech.

      The pan-European approach

      The most significant change is in terms of geography. The first two phases primarily focused on France, while phase three is designed to support pan-European funds that can invest larger amounts across multiple countries.

      The rationale is well-known now: Europe excels at founding companies but often fails to retain them when they require substantial growth capital. Consequently, Paris aims for small and medium-sized enterprises to scale and go public while remaining in Europe, rather than being acquired or relocating overseas. TNW has explored the reasons why public funding continues to pursue this gap, along with the structural challenges involved.

      Tibi versus Brussels

      France is not acting alone in this endeavor. The EU has its own initiative called the European Tech Champions Initiative, managed by the European Investment Fund (EIF). The EIF has also established a €3.75 billion fund of funds to support scale-ups in Europe, along with a separate Scaleup Europe Fund that provides direct backing to companies.

      The key difference lies in governance. Tibi operates under the French Treasury and relies on domestic funds, allowing Paris to dictate the terms. In contrast, ETCI solicits commitments from various governments through an EU entity, which then selects the funds. France believes that a single government can respond more swiftly than a collective of 27. Conversely, Brussels contends that only a supranational scheme can achieve true pan-European integration.

      Why this is important

      Both initiatives are competing for the same target: growth-stage European companies that need over €50 million, a critical juncture at which US investors typically become involved. This overlap raises an unresolved issue for France, as some Tibi investors might also participate in the EU's initiative, potentially leading to competition for the same funds.

      Nevertheless, the central takeaway is significant. Over five years, France has demonstrated that institutional capital will invest domestically if the government establishes conducive conditions. Phase three will be a crucial test, revealing whether this funding will also extend beyond borders and whether Europe's ambition for technological independence represents a unified strategy or merely two parallel initiatives.