France injects €13 billion into startups with Tibi model

The French government announced at VivaTech the third phase of the Tibi program, which will mobilize €13 billion (about $14 billion) from institutional investors — such as insurers and pension funds — into venture capital and growth equity funds that invest in tech startups. The announcement was made by the Ministry of Finance on Friday, June 13, 2025, according to The Next Web. This new phase brings the total commitment of the program to €28 billion since its launch in 2019, consolidating France as the most dynamic tech ecosystem in continental Europe.

The Tibi program represents an innovative approach to financing innovation without resorting to direct public spending. Unlike traditional subsidies or sovereign wealth funds, Tibi incentivizes institutional investors — such as insurers, pension funds, and mutuals — to divert a portion of their assets into venture capital and growth equity funds. In return, the government offers partial guarantees and a favorable regulatory framework, reducing perceived risk. This mechanism allows large-scale mobilization of private capital while minimizing the impact on the state budget. The first phase, launched in 2019, committed €5 billion; the second, in 2022, added €10 billion; and this third phase adds €13 billion, totaling €28 billion over six years.

The strategic goal of Tibi is to reduce France's dependence on foreign venture capital, especially from the US, which has historically dominated startup financing in Europe. In 2024, France surpassed the UK as the leading destination for tech investment in Europe, raising over €15 billion, according to Dealroom data. However, a significant portion of that capital came from US funds, creating vulnerabilities in terms of technological sovereignty. Tibi aims to create a stable, patient domestic capital flow, allowing French startups to grow without relying on investment decisions made across the Atlantic. The program also aligns with the 'France 2030' strategy, which allocates €54 billion to innovation in sectors such as artificial intelligence, digital health, clean energy, mobility, and defense.

The expected impact of this third phase is significant. The additional €13 billion could finance between 1,000 and 2,000 growth-stage startups, generating tens of thousands of skilled jobs. Sectors such as artificial intelligence, cybersecurity, biotechnology, and energy transition will be the main beneficiaries. Moreover, the program encourages the creation of 'scale-ups' — companies that have passed the initial phase and need capital to scale internationally — a segment where Europe has traditionally lagged behind the US and China. However, there are also risks. Excess available capital could inflate startup valuations, creating bubbles that, when burst, could destabilize the ecosystem. Additionally, being tied to institutional investors primarily based in Paris, there is a risk of geographic concentration, leaving ecosystems in cities like Lyon, Marseille, or Toulouse behind.

The historical context of Tibi is key to understanding its importance. The program was launched in 2019 by then-Economy Minister Bruno Le Maire as part of President Emmanuel Macron's vision to turn France into a 'startup nation.' At that time, the French ecosystem raised about €4 billion annually, far behind the UK. Tibi, along with other measures such as tax simplification for angel investors and the creation of the public fund Bpifrance, has helped quadruple startup investment in six years. In 2024, France recorded €15 billion in investment, surpassing the UK (€13 billion) and closing in on Germany (€10 billion). This growth has attracted the attention of other European countries, such as Spain, Italy, and the Netherlands, which are studying similar models to strengthen their own tech ecosystems.

Compared to other European initiatives, Tibi stands out for its approach to mobilizing private capital. The UK's 'Future Fund,' launched in 2020, injected £1.1 billion directly into startups through convertible loans, but it was a temporary pandemic response program. Germany's 'ERP,' managed by the public bank KfW, offers loans and guarantees but does not mobilize institutional investor capital on a large scale. In contrast, Tibi is a permanent program that creates a steady flow of private capital with minimal fiscal cost. According to the French Ministry of Finance, the guarantees granted would only be triggered in case of significant losses, making the expected cost to the state less than 1% of the total mobilized. This makes it an attractive model for countries with budget constraints.

For readers, it is important to understand that Tibi is neither a sovereign wealth fund nor a direct subsidy. It is a financial engineering mechanism that leverages the capital of large institutional investors, which in France manage over €2 trillion in assets. The third phase requires that the venture capital and growth equity funds they invest in have a focus on deep tech and strategic sectors for national sovereignty. Additionally, fund managers must commit to investing at least 80% of the capital in European companies, with a preference for French ones. This ensures that the money stays in the region, boosting the local ecosystem.

However, not everything is bright. Some critics point out that the program could exacerbate regional inequality, as most venture capital funds based in France are in Paris. There is also a risk that institutional investors, pressured by short-term profitability, may demand quick returns, potentially diverting investment toward less capital-intensive but more profitable sectors like software, at the expense of deep tech. Moreover, reliance on French institutional investors could make the ecosystem vulnerable to an economic downturn that reduces their risk appetite. Despite these risks, the overall balance is positive. The Tibi model has proven effective in mobilizing private capital at scale, and its third phase reinforces France's position as a European leader in tech innovation. As TheVortiq notes: 'France has shown that it is possible to mobilize private capital on a large scale to drive innovation without direct public spending. The Tibi model is an example for all of Europe.'