Purchase of stakes from start-ups
  • 2020-07-30
  • Entrepreneurship Research Center on G20 Economies
  • Edit
  • The French government plans to set up a 500 million euro ($566 million) fund to protects its start-ups from potential foreign takeovers. The public investment bank Bpifrance will manage a fund that will be launched with a capital of 150 million euros, which could be increased to 500 million euros from 2021. Its mission will be to protect national sovereignty by taking minority stakes in strategic companies.

    Private equity and venture capital firms are eyeing the potential slice of Rs 50,000-crore fund of funds for equity investments into micro, small and medium enterprises (MSMEs) with "growth potential" announced by India finance minister Nirmala Sitharaman on Wednesday. While the government is expected to contribute Rs 10,000 crore in the fund, another Rs40,000 crore is expected to be raised from external parties. The government has announced a change in the definition of MSMEs, which include companies that have a turnover of up to Rs 100 crore and capital investment of up to Rs 20 crore.

    The German government is preparing to buy stakes in startups to mitigate the impact of the outbreak. The move was strongly supported by Olaf Schulz, the finance minister. The German government has pledged to lend up to 550 billion euros ($594 billion) to troubled companies through KfW, but it is prepared to take further steps. Mr. Schulz said the government would buy stakes through the Financial Market Stability Fund, which was set up a decade ago to deal with the financial crisis.





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