The Big Whale: A few weeks ago, you published a progress report on the financing of French start-ups. What are your findings?

Paul Midy: Overall, it is very good. Over the last ten years, we have had a rather exceptional trajectory.

In 2012-2013, there was almost no ecosystem, and today we have nearly 30 unicorns (companies valued over $1 billion) in fields as diverse as e-commerce, data and cryptos.

This dynamic can be summed up in one figure: in 2017, French startups raised €2 billion, while in 2022, they raised over €13 billion! 🤑

Today, France is first on the European continent ahead of Germany, even if the United Kingdom is still far ahead with twice as much (26 billion euros).

With inflation and fear of investors, the amounts raised will fall sharply and some companies will experience difficulties...

For several months now, fundraising has been in sharp decline, but this is not just a French issue, it affects everyone.

The reasons for the drop are fairly obvious: with inflation and rising rates, money is more expensive, so investors are in a fog, waiting to see how things will develop.

In your progress report, you make several proposals for better financing of companies, with an emphasis on innovation. What are they?

For decades, France has been the world champion in public financing. Between Bpifrance, France 2030 and the French Tech mission, we have a unique system that has enabled us to support companies like Qonto, Ledger and Spendesk.

But we are lagging far behind in private funding, which can penalize us, especially in the case of disruptive technologies where there is a need for an alliance between the public and private sectors.

It is for this reason that the President of the Republic had announced during the 2022 campaign (in an interview with The Big Whale, ed.) his desire to set up a system comparable to SEIS-EIS in the United Kingdom, which allows mobilizing the savings of individuals via tax reductions of 30% to 50% depending on investments in start-ups 💡

What do you propose?

As requested by the President, France must have a similar system. I am working on an overhaul of the "young companies" tool to make it a real device that finances companies, with an emphasis on innovative sectors, with buffers and two new categories: Young Companies for Innovation and Growth (JEIC) and Young Companies for Innovation and Rupture (JEIR).

The investments in a JEIR will benefit from a tax reduction of 50% and those in the JEIC of 30%.

When will this device be available?

This project must pass in the budget bill because there are tax issues. I hope it can go into effect on January 1, 2024 🗓️.

What is your view on Web3?

France has the capacity to be a leader in Web3, at least at the European level. What we lack most is funding.

We have the talent and the entrepreneurial spirit, we need more funding so that there are not just a few companies, but dozens of leaders in the sector.

The crypto ecosystem is still volatile. Isn't it problematic to push people to invest in it?

Here we are not talking about markets, but about the companies in the ecosystem. Ledger and Sorare have shown their resilience. We must continue to be leaders in this area, just as we must continue to make progress on regulation.

Some people are worried about too much regulation. Do you understand them?

It's understandable, but we can see that regulation has become a key issue, and if you can take the lead as Europe has done with MiCA, you become attractive.

How do you measure it?

Look at where Binance, Circle, Crypto.com, and the other giants are setting up shop today. They are coming to Europe and especially to Paris. The other interesting point is that even if volumes have dropped, Europe is attracting more and more web3 investors, who are reassured by the regulatory framework.

How do you explain that France is so well positioned on tech topics?

We are a country of scientists and engineers. We have very strong skills that we must capitalize on because these are also issues of sovereignty.