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To Keep Start-Ups at Home, France Invests in Them
The New York Times | April 13, 2012 | 03:25 AM EDT

The French government likes social media — so much so that the country’s sovereign wealth fund has invested 10 million euros in an online network.

Viadeo, a company based in Paris that bills itself as the world’s second-largest social network for professionals, after LinkedIn, said Thursday that it had secured 24 million euros ($31.6 million) in new financing in what analysts described as the biggest investment ever in a European social network.

One of the new investors is a fund set up by the government of President Nicolas Sarkozy two years ago to buy strategic stakes in French companies, supporting their development — and, in some cases, to try to keep them out of foreign hands.

Governments across Europe are growing more active in their efforts to nurture technology start-ups, seeing them as one of the best hopes for producing economic growth. But usually these steps take the form of tax breaks or other financial incentives; it is unusual for public funds to take direct ownership stakes.

Except in France, that is. The government wealth fund, the Fonds Stratégique d’Investissement, has made 2.5 billion euros worth of investments in French technology groups, in giant companies like Groupe Bull but also in Internet firms like Dailymotion, a video-sharing service, and Skyrock, a blogging platform.

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