Whereas funding for Italian startups is on the rise, the nation nonetheless ranks eighth in Europe for enterprise capital investments, in accordance with Dealroom.
The newly created Italian Founders Fund (IFF) hopes to assist catch up each quantitatively and qualitatively. With €50 million to put money into 25 corporations, it additionally positions itself as an agnostic, founder-friendly fund that understands the ache factors of entrepreneurs.
IFF’s portfolio already contains 4 corporations, with a fifth deal within the pipeline. Two have been disclosed up to now: Earlier than buyer analysis platform Glaut in April, IFF led HR expertise startup Jet HR’s 2023 funding spherical.
“IFF solves the problem for early-stage founders in Italy to discover a lead investor with excessive conviction within the pre- and seed phases,” IFF founding companion Lorenzo Franzi (third from proper within the picture above) informed TechCrunch.
Some might disagree with the prognosis; Enterprise capital corporations working in Italy already embrace CDP Enterprise Capital, Exor Ventures, LVenture Group, Milano Funding Companions, Pariter Companions, Primo Ventures and United Ventures.
Franzi, nonetheless, believes this nonetheless leaves a niche for early-stage capital. And in any case, the IFF is turning into a brand new supply of capital for a market whose startups collectively obtain far much less funding than, say, France, even supposing the 2 nations have comparable populations.
IFF can also be an addition to accelerators like H-FARM and a step up from the angel investments Franti and different entrepreneurs who’ve change into their backers have been making.
The previous CEO of startup Laundrapp, who has partnered with World Founders Capital till the top of 2022, stated the “unstructured” strategy inherent in angel investing can result in a number of issues, corresponding to restricted evaluation, sophisticated cap tables and inadequate funding rounds. IFF can carry the fund’s construction into its funding course of, but additionally be hands-on after it invests.
For instance, IFF has been in a position to help portfolio corporations with key recruitment, business growth and strategic partnerships, Franzi stated. Jet HR CEO Marco Ollenga agreed, noting that the IFF’s added worth is because of the truth that it’s “backed by nearly all profitable Italian founders.”
This can be hyperbole; however in accordance with Franti, about 100 of the IFF supporters are certainly Italian entrepreneurs. He added that they arrive from completely different generations and sectors, however with a standard aim: to place Italy on the map of the very best locations in Europe to open an organization.
It is an bold aim, particularly since some ache factors are exterior of IFF’s remit: there’s little a non-public enterprise agency can do to offset excessive taxes and paperwork. Public efforts have just lately been made to extend the attractiveness of the nation and its expertise sector; however not like CDP Capital, which is backed by authorities companies, IFF is totally funded by a non-public basis.
Within the absence of presidency funding or institutional long-term packages, IFF can make investments the place it sees match. It’s going to use this geographic flexibility to additionally assist Italian founders working overseas in addition to overseas startups inquisitive about coming into the Italian market.
Overseas ties go each methods: IFF seeks to draw overseas enterprise capital funds to co-invest in its portfolio, both initially or in subsequent rounds. It’s going to additionally assist that a few of his albums are CEOs of overseas foundations, and that he plans to assist Italian founders with international ambitions.
World Italian startups embrace Bending Spoons, proprietor of well-liked apps and companies like Evernote and Meetup, which is valued at $2.55 billion. And with serial Italian entrepreneurs returning dwelling to start out their subsequent ventures, it appears becoming that they now have a founder-led fund to again them.
IFF might be managed by KOINOS Capital, a non-public fairness fund that’s increasing into enterprise capital, whose CEO Marco Morghese pointed to examples of founder funds in different markets, corresponding to Founders Fund within the US or the latest Galion. exe in France.
Seeing IFF adopting this mannequin in Italy is one other signal that the ecosystem is ageing. With regards to enterprise capital, the numbers are enhancing, however there’s nonetheless work to be executed. “In Italy, it’s essential to problem the established order concerning processes, velocity and an entrepreneur-oriented mindset,” Franzi stated.