Whereas funding for Italian startups has been rising, the nation nonetheless ranks eighth in Europe by VC funding, in accordance with Dealroom.
Newly created Italian Founders Fund (IFF) hopes to assist with the catching up, each in amount and in high quality. With €50 million to take a position into 25 corporations, it additionally positions itself as a sector agnostic, founder pleasant fund that understands the ache factors of entrepreneurs.
IFF’s portfolio already contains 4 corporations, with a fifth deal within the works. Two have been disclosed up to now: Earlier than buyer analysis platform Glaut in April, IFF led a 2023 spherical of funding into HR tech startup Jet HR.
“IFF is addressing the problem for early stage founders in Italy to discover a excessive conviction lead investor on the pre-seed and seed levels,” IFF founding accomplice Lorenzo Franzi (third from the appropriate within the image above) advised TechCrunch.
Some could disagree with the prognosis; VC corporations that function in Italy already embrace CDP Enterprise Capital, Exor Ventures, LVenture Group, Milano Funding Companions, Pariter Companions, Primo Ventures, and United Ventures.
Franzi, nonetheless, thinks that this nonetheless leaves a spot for early stage capital. And both manner, IFF comes up as a brand new supply of capital for a market whose startups collectively obtain far much less funding than France’s, as an example, although the 2 international locations have an identical inhabitants dimension.
IFF can also be a complement to accelerators comparable to H-FARM, and a step up from the angel investing that Franzi and different entrepreneurs turned backers had been partaking in.
A former CEO at laundry startup Laundrapp turned accomplice at International Founders Capital till late 2022, he mentioned that the “unstructured” method inherent to angel investing can result in a number of points comparable to restricted evaluation, complicated cap tables, and undersized funding rounds. IFF can convey the construction of a fund to its funding course of, but in addition be hands-on after it invests.
As an illustration, IFF was in a position to assist portfolio corporations with key hires, industrial enlargement, and strategic partnerships, Franzi mentioned. Jet HR CEO Marco Ogliengo concurred, noting that IFF’s value-add comes from the truth that it’s “backed by principally each profitable Italian founder.”
That could be hyperbole; however in accordance with Franzi, round 100 of IFF’s backers are certainly Italian entrepreneurs. He added that they arrive from a variety of generations and sectors, however with a shared objective: to place Italy on the map of the most effective spots in Europe to open an organization.
That’s an formidable objective, particularly since a few of the ache factors are out of IFF’s remit: There’s not a lot a personal VC agency can do to counterbalance excessive taxes and paperwork. There have been more moderen public efforts to spice up the nation’s attractiveness and its tech sector; however in contrast to CDP Capital, which is backed by state companies, IFF is completely privately funded.
In absence of public funding or institutional LPs, IFF is free to take a position wherever it sees match. It is going to use this geographical flexibility to additionally again Italian founders working overseas, in addition to international startups excited by getting into the Italian market.
International connections go each methods, with IFF aiming to get international VC funds to co-invest in its portfolio, both initially or in follow-on rounds. It is going to additionally assist that a few of its LPs are GPs of international funds, and that it plans to again Italian founders with world ambitions.
International Italian startups embrace Bending Spoons, the proprietor of fashionable apps and providers like Evernote and Meetup, which is valued at $2.55 billion. And with serial Italian entrepreneurs returning house to discovered their subsequent ventures, it appears becoming that they now have a founder-led fund to again them.
IFF will likely be managed by KOINOS Capital, a personal fairness fund that has been increasing into VC, and whose CEO, Marco Morgese, famous examples of founder-led funds in different markets, comparable to Founders Fund within the U.S. or extra just lately, Galion.exe in France.
Seeing IFF undertake this mannequin in Italy is another signal that the ecosystem is maturing. In the case of enterprise capital, numbers are bettering, however there’s nonetheless extra to do. “In Italy, difficult the established order on processes, velocity, and an entrepreneur-focused mindset is crucial,” Franzi mentioned.
