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Start-up finance supports innovation in France's food sector

Part of the fi-compass mandate involves identifying and sharing success stories from financial instruments that use the European Structural and Investment Funds (ESIF). Examples of effective results from such revolving funds include the seed finance provided to two firms in Languedoc-Roussillon, now part of France's Occitanie region, both of which were supported by CREALIA, an investment platform specialising in finance for innovative companies.

CREALIA is based in Montpellier and was created by region's business incubator network SYNERSUD in 2003. Its establishment was supported by the 6th EU Framework Programme for Research and Technological Development. CREALIA started its lending activity in 2005 to finance innovative projects in a start-up phase. In 2010, CREALIA was retained, as one of the three financial intermediaries selected, to implement financial instruments in the framework of the JEREMIE initiative in Languedoc-Roussillon. Thanks to the development of its activities, CREALIA quickly became a key player in the strategy of the region for the promotion of entrepreneurship and the support of innovative projects promoted by small and medium-sized enterprises (SMEs).

Since 2005, CREALIA provides seed loans ('prêts d’honneur') for up to EUR 100 000 as well as mentoring activities in close cooperation with SYNERSUD. CREALIA’s seed loans aim at improving the financial standing of start-ups and young enterprises with a business history of up to three years. In general, seed loans finance intangible assets such as patents, prototypes, etc.  Typically loans are granted directly to the entrepreneurs (as opposed to SMEs) who undertake to use the financing received for the ultimate benefit of a SME.

This investment support has proven particularly useful for firms like FERTINNOBAG, which was set-up by three agronomists who wanted to create innovative solutions for sustainable food systems.

Operating as a research and development (R&D) body, FERTINNOBAG promotes the use of organic materials that minimise chemical inputs in land use. The company has a laboratory in Nîmes, an experimental greenhouse and a mobile laboratory for field-based research. It has also created a European network of like-minded agronomists and associated experts.

CREALIA’s support for FERTINNOBAG involved an analysis of the company's funding application for start-up finance, including project eligibility, appropriateness of support, financial engineering and project maturity. Experts from the region's business incubator network, SYNERSUD, were also key partners in the assessment of FERTINNOBAG's investment proposals.

FERTINNOBAG’s start-up success has seen them develop their products to a commercial stage and start supplying environmentally-sensitive fertiliser products for vine and gardening sectors in France. They are also now expanding their horizons into other European markets and R&D for new products continues to remain a major part of the company's business strategy.

Food firm IL ETAIT UN FRUIT is another recipient of CREALIA's loan scheme which used the JEREMIE financial instrument's assistance to expand its market share of dried fruit sales in southern France. It joined forces with Leclerc, one of France's biggest retail companies, and the company's specialty products are now available in Toulouse, Aix-Marseille and soon in Paris. On 1st July 2016, the company moved to a larger space and started their staff working through a shift system in order to meet the needs of their retailers.

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