France's Strategic Support for the Deeptech Sector

1.   Introduction

1.1.  Overview of the Deeptech Sector in France

The term "deeptech" refers to startups that are rooted in scientific research and advanced technological innovation. Unlike typical tech startups that may focus on software development or consumer apps, deeptech startups work on breakthrough innovations across fields such as biotechnology, quantum computing, advanced materials, artificial intelligence, and more. These startups require a longer time horizon for research and development (R&D) and often face higher risks and capital needs due to the complexity and novelty of their work.

In France, deeptech startups are seen as critical drivers of innovation, with the potential to solve global challenges, contribute to national competitiveness, and create high-quality jobs. France has a strong tradition in scientific research, supported by world-class universities, research institutions, and laboratories such as CNRS (National Center for Scientific Research) and CEA (French Alternative Energies and Atomic Energy Commission). Leveraging this scientific excellence, the country has made deeptech a cornerstone of its innovation policy.

1.2.  Launch of the Deeptech Plan

In response to the growing importance of deeptech, the French government, in collaboration with Bpifrance, launched the Deeptech Plan in 2019. This strategic initiative is designed to position France as a global leader in deeptech innovation by providing targeted support to deeptech startups. The plan sets ambitious targets: by 2030, France aims to create 500 new deeptech startups per year, nurture 10 unicorns (startups valued at over $1 billion), and establish 100 industrial sites annually that will house these startups as they scale.

The Deeptech Plan is part of a broader strategy to ensure that France remains competitive in the global technology landscape. It builds on previous initiatives such as the "La French Tech" movement, which has successfully promoted France as a hub for digital innovation. With the Deeptech Plan, France is now focusing on the next frontier of innovation—cutting-edge technologies that have the potential to transform industries and societies.

2.   Financial Support and Incentives

2.1.  Initial Funding and Budget

The Deeptech Plan was launched with an initial budget of €2.5 billion, signaling the government's strong commitment to supporting this high-potential sector. This budget is allocated across various financial instruments designed to meet the specific needs of deeptech startups at different stages of their development. The funding is primarily managed by Bpifrance, the French public investment bank, which plays a central role in providing financial and advisory support to startups.

To ensure that deeptech startups have access to the necessary capital, the government has supplemented the initial budget with additional funding as needed. For example, in 2021, an additional €1 billion was allocated to the Deeptech Plan as part of the French government's broader economic recovery package, "France Relance," aimed at boosting innovation and industrial resilience in the wake of the COVID-19 pandemic.

2.2.   Key Financial Products

Several financial products and programs have been introduced under the Deeptech Plan to address the specific challenges faced by deeptech startups:

BFT Lab (Bpifrance French Tech Lab) is designed to support the earliest stages of deeptech startups, focusing on projects with strong entrepreneurial potential that are backed by university innovation hubs (Pôles Universitaires d'Innovation). It offers grants ranging from €30,000 to €120,000, specifically targeting pre-creation expenses such as consulting, research, intellectual property management, and legal expertise. This initiative helps bridge the gap between academic research and commercial startup creation, ensuring that promising technologies can be developed and prepared for market entry within 18 to 24 months. 

BFTE (French Tech Emergence Grant) is aimed at validating the feasibility of deeptech projects, offering grants of up to €90,000. This funding covers a wide range of expenses, including technical, legal, economic, and strategic studies, as well as personnel costs and overheads. The BFTE grant is specifically targeted at startups less than a year old, helping them to validate their business model and technological viability before moving on to more advanced stages of development. To be eligible, startups must demonstrate potential for growth and receive validation from regional and expertise management teams.

ADD (Deeptech Development Aid) is tailored for startups that have already validated their technology and are preparing for industrialization and commercial launch. ADD provides up to €2 million in mixed funding, combining subsidies (up to 25%) and recoverable advances. This funding supports research and development activities, including costs related to personnel, intellectual property, and external studies. ADD is particularly focused on deeptech startups that are looking to raise additional funds and need financial support to accelerate their development and scale their operations.

 Innovation Competitions: The Deeptech Plan includes several high-profile innovation competitions designed to identify and support the most promising deeptech projects. The i-PhD competition targets PhD students and recent graduates with innovative research projects that have commercial potential. The i-Lab competition is open to early-stage startups and offers substantial financial prizes, along with mentoring and support. The i-Nov competition focuses on more mature projects, providing funding for R&D activities that have the potential to lead to significant technological breakthroughs.

 These financial products are designed to be flexible and responsive to the needs of deeptech startups, ensuring that they can access the funding they need at every stage of their development.

3.   Support Services and Platforms

3.1.  Lesdeeptech.fr Platform

To complement the financial support provided under the Deeptech Plan, the French government and Bpifrance have developed the lesdeeptech.fr platform. This onlin platform serves as a central hub for deeptech startups, providing a wealth of resources, information, and support services tailored to the unique challenges of deeptech entrepreneurship.

The lesdeeptech.fr platform is designed to be a one-stop shop for deeptech entrepreneurs, offering tools and services that cover every aspect of startup development, from ideation to commercialization. Key features of the platform include:

 TANGO: Advisory Boards are essential for deeptech startups, providing strategic guidance and helping entrepreneurs navigate complex technological and market challenges. The TANGO service on lesdeeptech.fr assists startups in setting up these boards, connecting them with experienced industry professionals and researchers who can offer valuable insights and mentorship.

 TANDEM: Building a strong management team is crucial for the success of any startup, and deeptech startups are no exception. TANDEM helps deeptech entrepreneurs find and recruit complementary team members who bring the necessary skills and expertise to drive the startup's growth. This service is particularly valuable for founders with a strong technical background who may need support in areas such as business development, marketing, or operations.

MERCATO: One of the challenges deeptech startups face is accessing specialized expertise, particularly in areas like manufacturing, regulatory compliance, and intellectual property. MERCATO addresses this need by facilitating skills transfer from employees of major corporations to deeptech startups. Through this program, startups can tap into the experience and knowledge of seasoned professionals who can help them overcome technical and operational challenges.

3.2.  Specialized Support Programs

Beyond the services offered on lesdeeptech.fr, the Deeptech Plan includes a range of specialized support programs designed to address the unique needs of deeptech startups. These programs provide tailored assistance in areas such as talent acquisition, strategic planning, and industry networking. For example:

Bpifrance Deeptech Acceleration Program: This program offers a structured pathway for deeptech startups to scale their operations. It includes workshops, mentoring, and access to a network of industry experts and investors. The program is designed to help startups transition from the R&D phase to commercialization, ensuring that they have the resources and support needed to bring their innovations to market.

 French Tech 120 and Next40: These two initiatives are part of the broader French Tech strategy to support high-growth startups. Deeptech startups that are selected for these programs benefit from enhanced visibility, access to government resources, and tailored support to help them scale globally. The French Tech 120 program targets high-potential startups across all sectors, while the Next40 focuses on the top 40 most promising startups with the potential to become global leaders.

4.   Ecosystem Development and Networking

4.1.  Support for Local Ecosystems

The success of deeptech startups is closely linked to the strength of the local ecosystems in which they operate. Recognizing this, the Deeptech Plan places a strong emphasis on supporting regional deeptech ecosystems across France. These ecosystems bring together startups, research institutions, universities, investors, an industry partners, creating a collaborative environment that fosters innovation and accelerates the development of new technologies.

The lesdeeptech.fr platform features Local Pages that provide information on the activities, resources, and support available in different regions of France. These pages highlight local success stories, showcase regional events, and provide contact information for local innovation stakeholders. This regional focus ensures that deeptech startups across France have access to the support they need, regardless of their location.

For example, the region of Auvergne-Rhône-Alpes is home to a vibrant deeptech ecosystem, with a strong concentration of research institutions and industrial partners in sectors such as energy, healthcare, and advanced materials. Through regional events and tailored support programs, the Deeptech Plan helps to strengthen these local ecosystems, fostering collaboration and driving the growth of deeptech startups.

4.2.  The Deeptech Community

A key objective of the Deeptech Plan is to build a strong and interconnected deeptech community in France. This community, which now includes over 600 members, provides a collaborative environment where deeptech entrepreneurs can share knowledge, exchange ideas, and build partnerships. The community includes a diverse range of stakeholders, including startups, researchers, investors, industry partners, and government agencies.

The Deeptech Community plays a crucial role in fostering innovation and ensuring that deeptech startups have access to the resources and networks they need to succeed. Regular events, such as the annual Deeptech Tour, bring together members of the community to discuss trends, share best practices, and explore opportunities for collaboration. These events also provide a platform for startups to showcase their innovations and connect with potential partners and investors.

4.3.  The Deeptech Observatory

To track the growth and impact of the deeptech sector, the Deeptech Plan has established the Deeptech Observatory. This online tool provides valuable data and insights on the evolution of deeptech startups in France, including trends in regional and sectoral development. The Observatory tracks key metrics such as the number of deeptech startups created, the amount of funding raised, and the number of jobs created.

The data collected by the Deeptech Observatory helps policymakers, investors, and entrepreneurs understand the dynamics of the deeptech ecosystem and make informed decisions. For example, the Observatory's reports have highlighted the rapid growth of the deeptech sector in France, with the number of deeptech startups increasing by over 30% between 2019 and 2023. The Observatory also provide insights into emerging trends, such as the growing importance of artificial intelligence and quantum technologies within the deeptech ecosystem.

5.   Success Stories and Impact

5.1.  Emerging Unicorns

The Deeptech Plan has already started to yield impressive results, with several deeptech startups emerging as leaders in their respective fields. These startups have not only achieved significant technological breakthroughs but have also attracted substantial investment and scaled rapidly, becoming key players in the global market.

One notable success story is Alan, a healthtech startup that uses AI and data analytics to provide personalized health insurance solutions. Founded in 2016, Alan has grown rapidly and was valued at over $1.4 billion by 2021, making it one of France's most successful deeptech unicorns. The company's success is a testament to the potential of deeptech innovation to disrupt traditional industries and create new market opportunities.

Another example is Pasqal, a quantum computing startup that has developed one of the world's most advanced quantum processors based on neutral atoms. Pasqal has raised significant funding from both public and private sources and is collaborating with leading research institutions and corporations to develop commercial applications of quantum computing. The company's progress underscores France's leadership in the emerging field of quantum technologies.

5.2.  Economic and Societal Contributions

Deeptech startups are not only driving technological innovation but also making significant contributions to the French economy and society. These startups are creating high-quality jobs, attracting international investment, and helping to address some of the world's most pressing challenges.

 For instance, deeptech startups in the field of renewable energy are developing new technologies to reduce carbon emissions and improve energy efficiency. Companies like McPhy Energy are leading the way in hydrogen production and storage, providing solutions that are critical to the transition to a low-carbon economy. McPhy Energy's work has attracted substantial investment and partnerships with major energy companies, highlighting the strategic importance of deeptech in achieving France's climate goals.

 In the healthcare sector, deeptech startups are making significant advances in areas such as genomics, medical imaging, and drug discovery. DNA Script, for example, has developed a groundbreaking enzymatic DNA synthesis technology that is transforming the field of synthetic biology. This innovation has wide-ranging applications, from personalized medicine to industrial biotechnology, and has positioned DNA Script as a global leader in its field.

These examples illustrate the profound impact that deeptech startups are having on the French economy and society. By tackling some of the most complex and pressing challenges of our time, these startups are not only creating economic value but also contributing to the well-being and prosperity of society as a whole.

6.   Conclusion

The Future of France’s Deeptech Sector

As France continues to invest in the deeptech sector, the country is poised to maintain its leadership in global innovation. The Deeptech Plan, with its comprehensive support mechanisms, has laid a strong foundation for the continued growth and success of deeptech startups. Looking ahead, several factors will be critical to the future success of France's deeptech sector:

Continued Investment:  Ongoing financial support from the government and private sector will be essential to sustaining the growth of deeptech startups. This includes not only direct funding but also investment in infrastructure, such as research facilities and industrial sites, that can support the development and scaling of deeptech innovations.

Talent Development: Building a robust talent pipeline is crucial to the success of the deeptech sector. This includes fostering collaboration between universities, research institutions, and industry to ensure that deeptech startups have access to the skilled workforce they need. Initiatives such as the Deeptech PhD program, which supports the training of young researchers in deeptech fields, will play a key role in this effort.

Global Collaboration: As deeptech innovations often have global applications, fostering international collaboration will be important for the growth of France's deeptech sector. This includes building partnerships with research institutions, corporations, and investors from around the world, as well as participating in global initiatives and consortia focused on deeptech innovation.

With ongoing government support, a vibrant ecosystem, and a growing community of innovators, France's deeptech sector is well-positioned to achieve its ambitious goals and make a lasting impact on the global stage. The success of the Deeptech Plan will not only benefit France but also contribute to solving global challenges and advancing technology for the betterment of society.