Over the last few years, France has become Europe’s biggest startup hub outside the UK — and one of the people behind that momentum is economics professor Philippe Tibi.
Four years ago, he helped mastermind a plan to get big institutional private investors — mostly insurance companies, but also corporates and family offices — to become LPs and start investing in French technology.
The work began when Tibi, an academic at École Polytechnique, submitted a report to the French government, outlining ways to address a lack of available funding for tech companies. President Macron adopted many of its recommendations and launched what’s become known as the “Tibi Initiative”, which has yielded promising early results.
Some of the country’s largest insurers — including AXA, Crédit Agricole Assurances, Groupama and Maif — have joined the plan, and have so far pledged €13bn to back French startups and scaleups, of which €6.4bn has been deployed to date.
Now, Tibi would like to see other European countries replicating this success — in their own way.
“We are happy with what has happened in France and I thought it would be good to share experiences with other countries,” he told Sifted earlier this month during his visit to Poland, where he met with local insurers and startup ecosystem players. He also went to Frankfurt, and is in talks with stakeholders in the Netherlands and Greece.
“We don’t want to lecture anybody. We don’t want to come with a fully-baked cake. Every country has its own character, political motives. I don’t want to interfere with that,” Tibi told Sifted. “But once there is a doctrine that countries are interested in, I think it will be interesting to be around the table to discuss how we can pool or create a club for LPs and VCs that share the same objectives.”
Starting point
The Tibi initiative goes way back to 2019, when France was finding its feet as one of Europe’s leading startup hubs. Tibi presented the French government with a roadmap on financing “the fourth industrial revolution” and unlocking funding for tech companies.
His diagnosis was similar to ones given elsewhere in Europe — there’s not enough funding to support companies that want to commercialise their capital-intensive tech solutions and grow internationally. There are several public initiatives addressing this funding gap — like the European Investment Fund’s European Tech Champion Initiative that supports growth stage VCs — but, according to Tibi, public money is not enough.
“The problem is the size of financing requirements for public money are immense,” he says, stressing that public funds also have to invest in areas like defence, infrastructure, energy and education. “I don’t think there is a lot of room left for investing in companies or in venture capital.”
“We are in a world of constraint where a lot of the objectives of public policies should be financed by private money. The trick is to find the ways to get that done.”
Insurers on board
According to Tibi’s plan, private companies that have a lot of capital to invest — like insurance companies and pension funds that deploy big pools of their clients’ money, but also big corporates and family offices — should consider tech an asset class they should back.
The government created a structure to facilitate these investments, establishing state-monitored committees to examine applications from VCs who sought private funding, and labelling approved candidates as ‘Tibi funds’.
In the first phase of the scheme, running from 2020 to 2023, 21 companies pledged to invest €6bn in backing tech startups and scaleups; they then exceeded their commitment, deploying a total of €6.4bn. The second phase, which started in 2023, planned to secure an additional €10bn. To date, 14 more investors have joined the scheme and altogether, the 35 companies have pledged to invest another €7bn by 2026. 98 VC funds have so far been approved as ‘Tibi funds’.
“In the beginning, it was not obvious to get insurance companies on board. They had a lot of concerns,” Tibi says. “Now it will be different — it’s a permanent regime with the members of the club that are happy to see new investment opportunities.”
He says that the main argument he’s used to convince corporates comes back to the basics of finance diversification. “Technology is a very big asset class in the public markets, so to ignore that doesn’t make sense. And venture capital is now also an asset class. So the first argument is that you cannot ignore this asset class, even if only for diversification.”
“The second argument is: ‘OK guys, you did not invest in tech for the last 20 years. So you don’t own any Apple, Microsoft, Google. Their combined value is now $10tn. And you bought bonds instead?’,” he says.
While he understands that investing in tech is more volatile than bonds, he insists that tech investment is not that risky: “History tells you that it is a secular trend. It’s not a bubble.”
Next step: Europe
So now he uses the same arguments — plus the example of the French success story — when he goes around Europe visiting countries that want to implement similar schemes. Germany is already working on the so-called WIN initiative, which it hopes will unlock €12bn in investments from both public and private actors by 2030; Bavaria is also looking into replicating Tibi’s scheme at the regional level.
The UK’s Labour party, which formed a new government after winning a majority in this year’s election, has also pledged to try and emulate the successes of the Tibi initiative.
“Although we want Paris to be the hub of… new technology and financing, I also think that we need to cooperate with other countries, because we are not rivals. We are not rivals with Germans, or the Poles, or the Greeks or Dutch,” he says, stressing that he’s doing his roadshow as a private individual, for free.
“We need to find ways to tailor different audiences so that they find the conversation interesting, even if we have different groups. It is inevitable and welcomed that each country will have a scheme anyway, because that provides ownership.”
Later, he says, “it’d be nice to design something for Europe,” adding that a pan-continental scheme could have sector-specific or focus-specific committees, but that they must not grow beyond “human size”.
He’s aware that some public institutions are working on similar policies and schemes that are meant to mobilise private companies to invest in tech — one of them is the capital markets union, an EU project hoping to boost investments in innovative companies.
But he doesn’t think that these projects are mutually exclusive. “We must do both things: top down and bottom up,” he says “If we can find ways where European money can finance European projects, that’s fine”.
Read the orginal article: https://sifted.eu/articles/tibi-plan-europe/
