The EU’s investment programme for research &innovation (InnovFin) and their role for long term investment in innovation

Bpifrance’s Experience31 MARCH – THE HAGUE – THE NETHERLANDS

EFSI

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Bpifrance in short

A strong partner of EU Innovation programsHorizon 2020 national contact point for SMEs & Risk financeEUROSTARS

6 activities• Guarantees • Loans • Innovation • Funds of funds• Small cap investment• Mid/large cap

investment

90%of decisions taken at regional level

4 values to Serve the Future: Simple, Accessible, Optimistic and Proactive

• A public-sector bank created in 2012

• A full-service bank supervised by the ECB

• Largest promotional bank in France• Significant know-how of the French

SME market• Strong experience in providing

financing to innovative SMEs

2,200 employees

42regional offices

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Bpifrance in 2014

12.5 Bn€of financing

5.9 Bn€ of short term loans3.8 Bn€ of classic loans & cofinancing1.7 Bn€ of development lending1.1 Bn€ of innovation financing

7.8 Bn€of guaranteed loans

1.4 Bn€of equity

127 M€ directly invested in venture capital

159 M€ directly invested in SMEs516 M€ directly invested in Midcaps and large companies641 M€ subscribed into partner funds

3.7 Bn€ risks taken*

*Partner Banks’ loans are partially guaranteed from 40% up to 70%, with the support of most French Regions

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• Bpifrance has undertaken substantial marketing efforts to promote the InnovFin facility in France.

• Very good track record in terms of utilization under the RSI/InnovFin facility.

•  • Thanks to InnovFin, Bpifrance can provide loans on better terms to innovative SMEs

& small Mid-caps.•  • Bpifrance takes into account InnovFin and its costs in its pricing calculation for each

loan. •  • Enhanced access to finance is thus provided to innovative companies in

France.

Bpifrance & InnovFin

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Innovation products before EU support

AR / PTZI

Growth Loan

GRANT

Risk level

Sales

Investments

Formulation

Feasibility

Development

Pre-launching

Launching &

growth time

5M€

3M€

500k€

Amount

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With EU support (RSI & InnovFin)

AR / PTZI

SeedLoan

Growth Loan

GRANT

Risk level

Sales

Investments

Formulation

Feasibility

Development

Pre-launching

Launching &

growth time

Innovation loan

5M€

3M€

500k€

Amount

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• 1st transaction approved by EIF under the Juncker plan in May 2015•  • Supported through the SME window of the Juncker Plan (frontloading

procedure) •  • A portfolio of EUR 420m of loans to innovative SMEs and Small Midcaps

guaranteed by EIF

• Guarantee covering two recent products: •- The EIF Innovation Loan (320M€ with a 50% guarantee from EIF)•- The EIF Seed Investment Loan (100M€ with a 40% guarantee)

Bpifrance’s InnovFin Agreement

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The EIF Innovation Loan (320M€)• Launch: February 2014 through the Risk Sharing Initiative (RSI)• Beneficiaries : SMEs and Small Midcaps (up to 500 employees)• Aim: to finance the industrial launch of innovation. • Amount : up to EUR 5m• Very attractive conditions : no collateral required, 2 years grace period

The EIF seed investment loan (100M€)• Launch: 2015• Beneficiaries : targets innovative start-ups of less than 5 years which access to new equity funds from

investors• Aim: to help innovative start-ups in the negotiation of their valorization with identified investors (Loan

concomitant to the fund raising)• Amount: up to EUR 500k€ (1€ of debt for 2€ in equity received)

Bpifrance’s InnovFin Agreement

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• Bpifrance has efficiently rolled out the InnovFin facility, leading to a smooth implementation and a very good utilization of the product.

• As at February 2016 (after only 8 months), Bpifrance had provided: • - EUR 200m (PI FEI product) = 62% of the portfolio• - EUR 50m (PAi Start-up product) = 50% of the portfolio

• Thanks to InnovFin, Bpifrance has already supported more than 700 innovative companies (Target = 1245 companies).

A very successful product

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• Strong pipeline of Bpifrance under the InnovFin facility

• Bpifrance is currently applying for an increase of its InnovFin portfolio to continue financing innovative SMEs & small Mid-caps at favorable conditions.

• An additional 1790 companies are expected to be included in the InnovFin portfolio following this increase.

Next steps - increase

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• Provepharm is a French pharmaceutical company dedicating in the development and valorization of Drug Products world wide

• Needed finance for : clinical studies required by the FDA to get a marketing authorization on the US market

• Localisation : Marseille • Turnover : ~5M€• Staff : 12

Recent EIF Innovation loans

Eligibility criteria:

R&I costs represent at least 10% of its total operating costs

Loan Amount:

EUR 2 000 000

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• DEVISUBOX has developed innovative wireless photo webcams specialized to construction site monitoring. Commercialization started in 2013.

• Needed finance for : starting to export – targeted markets : US, Germany, Emirates

• Localisation : Marseille• Turnover : ~2M€• Staff : 24

Recent EIF Innovation loans

Eligibility criteria:

Has been awarded grants, loans or guarantees from an European or national R&I support scheme

Loan Amount:

EUR 1 500 000

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• NETATMO is specialized in connected objects and intelligent systems (Home camera with face recognition, weather station for smartphone etc.)

• Needed finance for : developing new commercialization channels and

• investing in R&D in order to keep a competitive edge

• Localisation : Boulogne• Turnover : ~12M€• Staff : 46

Recent EIF Innovation loans

Eligibility criteria:

Has been awarded grants, loans or guarantees from an European or national R&I support scheme

Loan Amount:

EUR 2 000 000

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• 1/ Process innovation should be clearly acknowledged as a key dimension of innovation supported through InnovFin. Any loan financing an investment in process innovation should therefore be eligible to InnovFin SMEG.

• 2/ Reporting requirement and fee structure of InnovFin Midcap (MCG- EIB) should be better aligned to those of InnovFin SMEG.

• 3/ Bpifrance welcome the initiative to create a new uncapped Guarantee for Unsecured Loans to RDI-intensive SMEs and Small Mid-caps – this addresses a clear market gap.

• 4/ Bpifrance sees the Equity Investment Platform of the EFSI SME Window as an opportunity to promote multilateral cooperation between NPBs and VC cross-border investments.

Bpifrance’s proposals

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