Page 3 - G20 Newsletter_Vol17

Governments buy stakes from start-ups Encourage R&D and innovation in start-ups

The French government plans to set up a 500 million euro ($566 The £750 million of targeted support for the most R&D
million) fund to protects its start-ups from potential foreign intensive small and medium-sized firms provided by the UK
takeovers. The public investment bank Bpifrance will manage government will be available through Innovate UK’s grants and
a fund that will be launched with a capital of 150 million euros, loan scheme. Innovate UK, the national innovation agency, will
which could be increased to 500 million euros from 2021. accelerate up to £200 million of grant and loan payments for
Its mission will be to protect national sovereignty by taking its 2,500 existing Innovate UK customers on an opt-in basis.
minority stakes in strategic companies. An extra £550 million will also be available to increase the
support for the existing customers, and support of £175,000
Private equity and venture capital firms are eyeing the potential
will be offered to around 1,200 firms not currently in receipt of
slice of Rs 50,000-crore fund of funds for equity investments
Innovate UK funding. The first payments will be made by mid-
into micro, small and medium enterprises (MSMEs) with
May.
“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 Rs
40,000 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 start-
ups 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.

Support start-ups to scaleups

On April 8th, the EU Commission is launching ESCALAR, a new
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investment approach, developed together with the European
Investment Fund (EIF), that will support venture capital and
growth financing for promising companies, enabling them to
scale up in Europe and help reinforce Europe’s economic and
technological sovereignty. It will provide up to €300 million
aiming to increase the investment capacity of venture capital
and private equity funds, triggering investments of up to
€1.2 billion, or four times the original investment, to support
promising companies.

With the launch of ESCALAR, the Commission is delivering
on one of the actions announced in the new SME strategy
to improve access to finance for SMEs. This initiative is
particularly relevant in the difficult economic situation which