As Kauffman Foundation’s ‘America’s New Business Plan’ notes, capital remains among the most impactful ways to strengthen access to entrepreneurship. The non-partisan roadmap for US policymakers highlights that “when business owners do not have access to personal funds or quality capital, they are less able to take the risks necessary to grow their businesses, artificially stifling the marketplace”.
While there is much that policymakers can do to nurture private-sector funding for startups, governments worldwide are increasingly playing a direct role in tackling medium-term market gaps and systemic market failures that are limiting entrepreneurs’ access to capital.
Bpifrance is one leading example in Europe. The French public investment bank is now responsible for $22bn of direct funding, $7.6bn of guaranteed bank loans and $4.3bn of investment.
While Bpifrance (Banque Publique d’Investissement) launched in 2013 by the merger of various French sovereign funds, it has over a century of history as a result of various entities launching and merging over the years. It has country-wide presence, with 50 local branches across France.
Detailing its activities can be challenging given its broad scope and scale. It describes itself as “the one-stop shop for entrepreneurs”. At its heart is finance for micro, small and mid-cap businesses that traditionally struggle to get funded. On offer are guarantees and short-term loans, and longer-team investment loans. In 2018, it provided over 50,000 short-term loans and 6,000 investment loans.
In 2015 it moved into providing support to entrepreneurs by launching three accelerator programs for startups, mid-caps and large caps. By 2019, it was running 25 accelerator programs with the aim of supporting 4,000 businesses by 2021. It has also been gathering up to 45,000 entrepreneurs at it’s ‘BIG’ event each year.
It is recognized as the French innovation agency, delivering programs for innovative entrepreneurs that combine advice, training, international immersions, and finance. In 2017, It become the French export credit agency and now provides export credit insurance, exchange risk insurance, export bond and working capital insurance, investment insurance and more. It organizes 30 international learning expeditions per year to help entrepreneurs discover new markets and meet with potential buyers and investors.
In addition to directly funding businesses, Bpifrance is a fund of funds, working with 400 partnering funds. This includes investing in innovation funds, regional funds to stimulate local economies, small-cap funds, and international funds that work across Europe, Africa, Asia and North America.
Bpifrance shows the value and opportunity when multiple business finance institutions are brought together under one roof. It’s ability to blend training, finance, export support, and wider advice allows French entrepreneurs a true “one-stop shop”.
Bpifrance’s innovation activities are now being evaluated by France Strategie using the CASD secure data hub to collate and analyze wide-ranging data sources to assess the economic impact of the bank’s activities.