Innov Fin SMEG in Bpifrances offer The Financing

Innov. Fin SMEG in Bpifrance’s offer : “The Financing Continuum of Innovation” Sylvie Cogneau Bpifrance On-site mentoring mission / Access 4 SMEs in Bulgaria Sofia, October 16, 2018 1

Bpifrance : General information Established by the law of December 31, 2012, Bpifrance is equally held by the French state and Caisse des Dépôts Its activities are organized around three business lines : 50% 90, 6% Bpifrance Financement 9, 4% Bpifrance Investissement Bpifrance Assurance Export * Simplified chart Other (mainly private commercial banks) Bpifrance Assurance Export* : Credit Insurance, Foreign Investment Insurance, Market Survey Insurance, Exchange Risk Insurance, Bonds and working capital guarantee were integrated to Bpifrance on January 1 st, 2017 2

Bpifrance provides the tools and support necessary to companies’ internationalization A partnership throughout the whole lifecycle of our clients EXPORT Bpifrance guarantees banks to enhance financing of SMEs at their riskiest life stages Bpifrance backs innovative projects by financing R&D and industrial / commercial launch, or through equity investments GUARANTEE FINANCING INNOVATION PRIVATE EQUITY Bpifrance invests as a minority investor either directly in growing companies, or indirectly in private equity funds, themselves investing in SMEs Bpifrance provides a wide range of loans to support the development of companies of all sizes 3

An organization designed to bring us closer to the entrepreneurs 48 regional offices 90% In every region: ● A guarantee finance officer ● A dedicated Export Financing Expert ● One or more Business France officers ● An innovation officer ● An equity investment officer ● of decisions taken in the regional offices 1 contact for companies Bpifrance works in collaboration with regional authorities, to develop financial solutions adapted to territorial specificities 4

INNOVATION Bpifrance supports innovative projects, whether individual or collaborative, by financing R&D and the go-to-market plan, or even by acquiring a stake in capital: Support to innovation: grants, repayable advances, interest-free loans Innovation loans to launch innovative products and services on the market Seed-capital loans to prepare for fund -raising Equity investments, either directly or through our partner funds 5

French entrepreneurs require fertile ground a variety of tools to be able to grow 6

Connecting the ecosystems and catalysing public policy in favour of innovation 7

We support your innovation projects so that they are more likely to be successful We finance the completion of your project: For individual · Aid for innovation development For partnerships ACHIEVE YOUR STRATEGY · Aid for collaborative projects For international · Innovation development in international collaboration We support you so as to · Confirm the feasibility of your innovative project · Prepare the arrangement IMPLEMENT YOUR PROJECTS and partnership of your collaborative project BOLSTER YOUR EQUITY We help you start an innovative company: · Loans for innovation and help you obtain a bank loan · Guarantee for bank loans · Pre-creation support EXPLORE THE FEASIBILITY TRANSFORM YOUR IDEA We accelerate the industrial and commercial launch: We facilitate the Participation of capital investors: · Seed loans · Equity stakes via direct funds and partners · Qualification of “innovative company” for access to FCPI The financial support offered by our teams : Grants, repayable advances, zero-interest loans, reduced-rate loans, acquisition of an equity stake and guarantee for a bank loan, depending on your project’s risk and progress (distance to market). 8

Bpifrance guarantee Bpifrance shares the risk The financing of very small to medium-size companies presents a high risk when: ü the company is being created or transmitted, ü investments in risky phases such as international expansion or innovation : Bpifrance provides directly companies with grants and loans for innovation and is also able to guarantee 40 -70% of the risk taken by banks and investors 9

Innovation Financing products depending on the project’s progress Risk level Investments Growth Loan Innovation loan Reimbursable Advance Seed Investment Loan Sales Seed Loan Grant ion t a ul m r Fo y Fe a ilit b i s v De e lop nt me g a e-l r P un in ch g& n i ch owth n u gr La time 10

EIB Group offer : Division of roles EIF EIB SMEs–Mid caps Large entreprises ü Equity / Guarantees via financial intermediaries ü Direct loans Tickets 25 K – 7, 5 M – M€ JUNCKER PLAN Funds strategic investments At all stages of development • Reinforcing EIB group • 500 Billion € of investments in 2020 500 M € 11

1. Equity of EIB Group Transfer of technology funds and seed funds Business Angels EIF Venture capital funds Capital devlopment funds Debt funds & mezzanine EIB Portfolio EIB and EIF: +70 French funds from seed to growth 12

2. Main guarantees of EIB Group Enterprises Profile Modalities Gestionnaire COSME Loan Guarantee Facility Enterprises at the growth stage / competitivness • • Free guarantee Amount of the loan: max 150 K € per max 12 months EIF INNOVFIN Innovative SMEs (Criteria list) • • Guarantee subsidized fees Amount : from 25 K to 7, 5 m € per 1 to 10 years EIF Inno. Fin SME Guarantee INNOVFIN Innovative mid caps Inno. Fin Mid cap Guarantee CREATIVE EUROPE Creative Cultural Sector Guarantee Facility • • Creative industries enterprises and cultural enterprises • • • Guarantee fees under market conditions Amount : higher than 7, 5 m€ 50% max per guarantee loan EIB Free guarantee Loan amounts limited to 150 K € EIF per max 12 months Guarantee up to 70% 13

3. Direct loans of EIB Target Objective Modalities Enterprises operating in the EU which have : • • Solid Business model / Defined strategy Solid Capitalistic structure Financial needs linked to the growth of the business, Innovation and energetic efficiency, industrial projects, circular economy Amount – 7, 5 to 500 m € Duration – Generaly 5 to 7 years (Longer on a case-by-case basis) 14

Funds of EIB Group in Bfpifrance’s offer (1/2) Innovation Financement Seed Investment Loan EIF Reinforcing the cash of the company during a fundraising EIF Innovation Loan Creative Industries Loan Financing the immaterial expenses of the industrial & commercial launch of an innovation Financing the immaterial expenses of companies in creative & cultural sectors • Supported by Innov. Fin guarantee programme / Horizon 2020 • Supported by the Creative Europe programme • PAI (Seed Investment Loan): 50% guaranteed by the EIF+ 30% Bpifrance • Guaranteed to 70% by EIF • PI (Innovation Loan) : Guaranteed to 50% by EIF + 30% Bpifrance 15

Funds of EIB Group in Bpifrance’s offer (2/2) Equity Industrial Projects Societies (IPS) Fund Support, alongside mainly industrial partners, the projects transition to their industrialization phase Bpifrance takes minority stakes alongside other investors such as the EIF in capital investment funds • Agreement of co-investment EIB / Bpifrance • +60 VC funds and development capital coinvested by Bpifrance and EIF • 100 m€ in delegated management to Bpifrance • Minority investments pari passu • Investments pari passu with IPS 16

Bpifrance’s Innov. Fin Agreements In 2013 a previous RSI Agreement ► 1 st Agreement signed with EIF under the Juncker plan in May 2015 • A portfolio of EUR 420 m of loans to innovative SMEs and Small Midcaps guaranteed by EIF Guarantee covering two recent products: • • The Innovation Loan (EUR 320 m) The Seed Investment Loan (EUR 100 m) ► 2 nd Agreement in October 2016 ► 3 rd Agreement in October 2017 to increase the lending capacity of the 1 st Innov. Fin contract • Covering the 2 same loan products to innovative entreprises : Ø The Innovation Loan : 1040 m€ guaranteed to 50 % by EIF for the launching of the innovation on the market. For enterprises + 3 years old and less 500 employees, loan of 5 m€ max. Ø The Seed Investment Loan : 400 m€ guaranteed to 40% and now 50% by EIF for the reinforcement of young enterprises while successful raising money, loan of 500 k€ and now 1 m max. 17

What are the advantages of using the Innov. Fin guarantee scheme? v. For the bank Ø It encourages the financing of innovation phases. The intermediary then finds himself well "placed" in the banking competition to enter those customers who create value for the future. Ø The risk is shared with the instrument. It’s lowering the risk exposure in the balance sheet of the FI. It’s improving the return on investment of the Equity ratio = with the same level of capital, banks can lend twice as much, because they make credit involving half of their own funds in case of disaster 18

What are the advantages of using the Innov. Fin guarantee scheme? v For the SME Ø The interest rate of the loan is reduced thanks to the financial benefit retroceded to the SME Ø Less collateral requirements (max 30% for the FI) Ø The scheme encourages the financing of risky steps in the development of innovation: it turns high risk into acceptable risk = the SME can get its financing. Ø At the macroeconomic level, a larger population of SMEs can benefit from the financing. 19

Implementation of Innov. Fin Examples of EIF Innovation Loans MUQUANS proposes a new generation of ultra-high performance measurement instruments based on a unique and patented technology, which relies on the utilization of laser cooling, trapping and manipulation of neutral atoms. Localisation : Talence (Aquitaine) Creation : 2011 by 3 Ph. Ds in quantum physics (a spin-off from Institut d’Optique de Paris) Staff : 15 First round with 3 VC in 2014 : EUR 1, 7 m raised Needed financing to accelerate commercialization, consolidate technology and boost export Eligibility criteria: Has been awarded grants, loans or guarantees from an European or national R&I support scheme Loan Amount: EUR 200 000 20

Implementation of Innov. Fin Examples of EIF Innovation Loans 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 : ~2 M€ Staff : 24 03/10/2020 Eligibility criteria: Has been awarded grants, loans or guarantees from an European or national R&I support scheme Loan Amount: EUR 1 500 000 21

Implementation of Innov. Fin Examples of EIF Innovation Loans 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 Eligibility criteria: Localisation : Marseille Turnover : ~5 M€ Staff : 12 Loan Amount: R&I costs represent at least 10% of its total operating costs EUR 2 000 22

Implementation of Innov. Fin Examples of EIF Innovation Loans NETATMO is specialized in connected objects and intelligent systems (Home camera with face recognition, weather station for smartphone etc. ) Eligibility criteria: Needed finance for : developing new commercialization channels and investing in R&D in order to keep a competitive edge Has been awarded grants, loans or guarantees from an European or national R&I support scheme Localisation : Boulogne Turnover : ~12 M€ Staff : 46 EUR 2 000 Loan Amount: 23

Implementation of Innov. Fin Examples of Seed Investment Loans VOGO develops and commercializes a very innovative video solution on mobile devices for sport event spectators (live access to different video cameras, slow motion, rewind etc. ) Partnership with Be. IN Sport Raised EUR 4 m in 2014 (from founders, VC, Languedoc Region) Needed financing to accelerate international expansion : office in Montreal in 2015, then Japan. Localisation : Montpellier (Languedoc) Loan Amount: EUR 400 000 Creation : 2013 Staff : 6 24

Implementation of Innov. Fin Examples of Seed Investment Loans XAMEN TECHNOLOGIES designs and develops and commercialize unmanned aircrafts (drones) for civil uses (security of industrial plants, aid after natural disaster, environment protection etc. ). Needed finance to: speed up commercialization Raised EUR 1, 3 m in 2015 Loan Amount: Localisation : Pau (Aquitaine) EUR 250 000 Creation : 2012 Staff : 10 25

Thank you for listening Contact: sylvie. cogneau@bpifrance. fr