As Italy reinstates many COVID-19 restrictions, the country’s tech ecosystem is watching and waiting to see what the wider effects of the emergency will be. Italy’s ecosystem for tech venture capital and startups has been in development for years and has made decent strides in the last decade. Will the coronavirus stymie their efforts?
Put off by high taxes and paperwork in their home country, many Italian entrepreneurs moved to places like London in years past to startup. Indeed, the Italian Ministry of Economic Development and the Italian Trade & Investment Agency in London have even been known to fund Italian entrepreneurs abroad to help them gain more experience. There are an estimated 100,000 Italians already living in London, attracting the likes of Riccardo Zacconi, co-founder of King.com (maker of Candy Crush) and Simon Beckerman of social shopping app Depop.
Rome has more than 20 incubators/accelerators and many established VCs; because of its lower costs compared to other European cities, it’s become a major base for startups. However, while many startups exist in cities like Turin, Bologna, Naples and Rome, Milan is generally seen as a bigger ecosystem because of its mercantile culture and a significant share of VC funds.
The good news: VC funding in Italy has grown. In 2019, Italian startups attracted $850 million, compared to just €140 million in 2017, as the VC ecosystem became less insular and more international investors arrived. Milan tends to attract the lion’s share of VC funding — in 2019, startups located there received €311 million, according to NGP Capital. In 2019, about 300 deals were venture-backed.
Even so, Italy is still very much behind its European counterparts, which means founders tend to move their HQ to fundraise elsewhere, while keeping their comparatively cheaper workforce at home. Italy continues to have structural problems for startups: Credit is based on a company’s financial history, so loans are off-limits.
However, in June 2020, the Italian government sponsored a €1 billion investment program aimed at the native startup ecosystem, creating a new venture arm: CDP Venture Capital.
This has seven different funds under management, including a VC fund-of-funds, “Series A/B matching” funds and acceleration funds. It has also launched two different acceleration projects aimed at supporting SMEs and startups with mentoring, networking and support services.
Additionally, the Ministry of Economic Development launched an initiative called The Italian Startup Act that bundled previously passed legislation to incentivize the Italian ecosystem with tools like tax breaks on early-stage investments and R&D credits, plus a startup visa to attract talent.
Entrepreneurs still face plenty of red tape, however, which is tough enough for Italians, let alone outsiders who might consider relocating. And skeptical observers are concerned that some of the government-backed initiatives look like the government is trying to pick winners, which rarely ends well. Plus, there is controversy about how a €209 billion recovery fund from the European Union, earmarked for the country’s 11,000 startups, will be spent.
But the talent pool is increasing, with Italian universities attracting more overseas students with English-language-based courses and big corporates investing. Microsoft has announced a $1.5 billion investment plan, which includes its first cloud data center in the country. NTT data is investing in Calabria. Amazon has invested in new infrastructure. And Apple has sponsored a Naples-based developer academy.
With a population of 60 million (for comparison, U.K.: 66 million, Germany: 83 million, Spain: 46 million), Italy is not lacking in people, but GDP per capita is a low $34,000. It has an estimated 67 VC funds, with 18 of them started since 2015.
Notable startups from Italy include MoneyFarm (which has raised $127 million from United Ventures, Allianz), Prima.it (€100 million, Blackstone, Goldman Sachs), Soldo (€83 million, Accel, Battery Ventures), Casavo (€59 million, Greenoaks, Picus, Project A, 360 Capital), Musixmatch ($14M, P101) and Milkman (€32 million, p101, 360 Capital Partners).
Most recently, Satispay was backed by Square to the tune of £18m, while Spreaker was acquired by iHeartMedia.
Approximately half of seed to Series A funds have raised $100 million+ funds in the last year. However, seed rounds for startups remain low, even for Europe, ranging from anywhere from €300,000 to €1 million.
ScaleIT is a notable tech business event for the country (which clearly took over from the fabulous TechCrunch Italy events of a million years ago).
And finally, WeWork is opening two more buildings in Milan, taking it to five locations in the city, by mid-2021. Milan-born Talent Garden, which has raised €56 million, is still bullish about co-working despite the pandemic. While this was announced before news of a vaccine emerged, it’s clear that major players are still betting on Italy’s emerging tech ecosystem.
These are the investors we interviewed:
- Giulia Giovannini, partner, United Ventures
- Anna Tampieri, partner, ENEA Tech
- Giuseppe Donvito, partner, P101 Ventures
- Massimiliano Magrini, partner, United Ventures
- Matteo Elli, partner, Pariter Partners
- Fabio Pirovano, partner, United Ventures
- Simone Riva, partner, H14
- Matteo Confalonieri, associate, Milano Investment Partners
- Gianluca Dettori, partner and founder, Primomiglio
- Alessandro Petrich, partner, LVenture Group
- Mario Scuderi, partner, CDP Venture Capital
Giulia Giovannini, partner, United Ventures
What trends are you most excited about investing in, generally?
We are sector-agnostic in our approach, and we invest both in B2B and B2C tech/digital companies from various industries. We mainly invest in SaaS companies with some proven traction in the market – but overall, we seek the best technology entrepreneurs that want to make an impact. Our focus is on entrepreneurial and technological initiatives aimed at digitalizing and increasing the productivity of traditionally undigitized sectors. Lately, we have been looking into insurtech and medtech.
What’s your latest, most exciting investment?
In October 2020, we led a $7M Series A round in Boom Image Studio, a Milan-based company on a mission to reshuffle the world of commercial photography by transforming the way digital photo content is generated. We believe that Boom will significantly accelerate the photography industry’s digital transformation, dramatically improving the photo production experience for customers and photographers.
Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
The strategy of venture capital is not to capitalize on the continuity of trends already existing on the market or to focus on the hype of the moment, but rather the exercise of imagining the demands of tomorrow, intercepting products and services capable of reinventing entire sectors with a view to a future industrial policy. Startups using tech to foster remote work, education, healthcare are undoubtedly in the spotlight at the moment: the key question is which technologies and platforms can meet current priorities and remain relevant in the post-pandemic future.
What are you looking for in your next investment, in general?
There is no such thing as a “typical United Ventures company,” but there is a paradigm that all our best investments have in common: ambitious founders with strong values and who know how to inspire their team, with an entrepreneurial project focused on a large growing market and the ability to scale internationally.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
I have seen too many startups in payment services. I think the wave has passed.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We are a European VC with a strong focus – approximately 50% – on the Italian ecosystem, where we are best placed to support teams in terms of value-add. We are committed to making the most of the Italian market’s peculiarities, connecting Italian entrepreneurs and talents to the global market. On a national level, we are active all around Italy, with startups headquartered in Milan, Rome, Bologna, Pisa.
Which industries in your city and region seem well-positioned to thrive, or not long-term? What are companies you are excited about (your portfolio or not), which founders?
Milan is well positioned on fintech matters, while Italy is home to many exciting initiatives very much oriented towards deep technologies thanks to research centers of excellence such as Milan and Turin Polytechnics and the IIT (Italian Institute of Technology). Concerning our portfolio, I am very excited by Credimi, a digital lending platform offering digital factoring solutions to enterprises experiencing significant growth rates, and I’m looking forward to working with Boom, our latest investment.
How should investors in other cities think about the overall investment climate and opportunities in your city?
The Italian ecosystem is still small compared to other European hubs, but it has been developing rapidly in recent years. Milan has earned a national hub’s status and reached that critical mass — of large companies, multinationals, universities with cosmopolitan vocation, new companies — capable of generating an ecosystem able to attract the best talents and connect them with other continental and global hubs.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I think startups will continue to gravitate around big cities’ hubs because they bring value in terms of network and contamination. However, the pandemic has allowed an acceleration in the adoption of remote work organization, enabling the search and recruitment of talents from abroad. Many of our portfolio companies opened up fully-remote roles.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
B2C startups are certainly favored due to the increased penetration of e-commerce. On the other side, the adoption of new B2B business models may be slowed down by the modus operandi of large companies that are not at their ease signing remote commercial agreements, causing delays.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Our role, as Venture Capital investors, is to support our portfolio companies at our best capacity. Getting fundraising done and signing customer deals has been challenging in these months, so our advice is, first of all, to control and manage the cash carefully. We highlighted the need to communicate effectively and realistically with their employees, clients, and stakeholders. Concerning our investment strategy, we refocused on the Italian market.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Tech startups are facing challenges and opportunities. Our portfolio is navigating the pandemic with determination and creativity. For example, Credimi has put in place several initiatives to aid Italian SMEs to face the COVID-19 emergency. More generally, B2C startups have seen significant growth in revenues, while B2B startups have, in some cases, seen a lengthening in the average time taken to underwrite commercial contracts.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Having managed to close the investment in BOOM working remotely with the startup from the first meetings to the closing, I had the confirmation that our job can be easily managed through remote work.
Any other thoughts you want to share with TechCrunch readers?
Technology is driving radical change across all aspects of our life, and the uncertain times we are going through has accelerated the digital transformation in multiple ways. Our job requires a long-term outlook: now more than ever, we are confident in technological innovation’s potential to lay the groundwork for a brighter future.
Anna Tampieri, partner, ENEA Tech
What trends are you most excited about investing in, generally?
Material science and biotech.
What’s your latest, most exciting investment?
Green Bone Ortho.
Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Startups dealing with new materials.
What are you looking for in your next investment, in general?
Innovative materials and solutions coming from recycling and the circular economy.
What are companies you are excited about (your portfolio or not), which founders?
Food and beverage, biotech, automation and tourism.
How should investors in other cities think about the overall investment climate and opportunities in your city?
Before the pandemic the business climate was positive, even if it was challenging.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
No, I don’t expect that: I think that the pandemic will create a move towards “localism.”
What are the opportunities startups may be able to tap into during these unprecedented times?
Mainly biotech and company involved in developing various anti-COVID solutions.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Startups dealing with new solutions for personal mobility.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Many.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
The moment that I contacted a newco developing an innovative cure for COVID-19 using monoclonal antibodies.
Any other thoughts you want to share with TechCrunch readers?
I would share an unpopular thought: To focus more on true innovations versus the short-term economic return.
Giuseppe Donvito, partner, P101 Ventures
What trends are you most excited about investing in, generally?
Software, big data, cybersecurity, fintech, consumer and digital.
What’s your latest, most exciting investment?
Are there startups that you wish you would see in the industry but don���t? What are some overlooked opportunities right now?
I would like to see more startups really disrupting traditional value chain and able to scale. There are overlooked opportunities coming from the COVID-19 crisis that probably will not perform at the same rate in the long term.
What are you looking for in your next investment, in general?
An outstanding management team, able to scale internationally and able to solve something big.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Too many opportunities chasing the same market and trying to sort out the same problem, especially in consumer markets.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More than 50% (approximately 65%).
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Industries well-positioned to thrive are digital in general, including consumer, enterprise software, fintech and overall manufacturing tech. I am excited about all our portfolio companies at P101 Ventures.
How should investors in other cities think about the overall investment climate and opportunities in your city?
The Italian ecosystem is thriving and growing at an incredible pace. Fair valuations and outstanding founders and management team make the VC environment great!
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I am not able to give an answer especially in the long term; too many variables.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Some industries like travel, tourism, retail were definitely the most impacted. Startups in fintech, online grocery, cybersecurity, big data and software will definitely have strong upside.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Given P101 has built a balanced and well-diversified portfolio, COVID is not having a significant negative impact on our startups. The investment strategy has not changed significantly and we don’t want to chase only opportunistic deals. Main worries in our startups are related to delay in revenues recognition and collection and sometimes lack of optimism among clients. Like in all the crisis situations, the main attention should be on containing costs and cash burn and building the next stage of growth with resilience and balance.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Specific subsectors like fintech, food delivery, online grocery and digitalization in general are enjoying this moment.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
As always, an opportunity comes out of a crisis.
Massimiliano Magrini, partner, United Ventures
What trends are you most excited about investing in, generally?
Deep tech.
What’s your latest, most exciting investment?
Exein.io.
What are you looking for in your next investment, in general?
Strong tech founders with game-changing ambitions.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Marketplaces.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
60%.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
IoT, cybersecurity and fintech.
How should investors in other cities think about the overall investment climate and opportunities in your city?
As an emerging tech hub.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes there will be a rise of many ecosystems once perceived as peripheral.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
More focus on game-changing big bets in technology transition in health and energy.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
No major impact so far, manage cash and focus on the long-term strategy.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
No.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
The reemergence of Europe as a cultural, political and economic area.
Any other thoughts you want to share with TechCrunch readers?
Open up your perspective on emerging ecosystems.
10 Zurich-area investors on Switzerland’s 2020 startup outlook
Matteo Elli, partner, Pariter Partners
What trends are you most excited about investing in, generally?
Deep tech: robotics, new materials, mechatronics, AI, new space, alternative protein, etc.
What’s your latest, most exciting investment?
What are you looking for in your next investment, in general?
Disrupting technologies in robotics and space industry.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
AI, big data, driverless cars.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
About 90% in Italy but we would like to expand our network to invest abroad.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Fashion, food, proptech, fintech.
How should investors in other cities think about the overall investment climate and opportunities in your city?
Few capital, not exciting deal flow. They have to look inside research centers.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
From our point of view COVID-19 doesn’t affect their business.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
More opportunities and timing to market is lower for such technologies.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
I’m a positive person so I didn’t feel any problem personally or on the portfolio.
Any other thoughts you want to share with TechCrunch readers?
I would like to give more info on the Italian ecosystem regarding technology and research centers. We have amazing people and technology but an important lack of capital.
Fabio Pirovano, partner, United Ventures
What trends are you most excited about investing in, generally?
Fintech, SaaS, AI and cloud-based tech.
What’s your latest, most exciting investment?
Fiscozen.
Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Would love to see more deals in SaaS.
What are you looking for in your next investment, in general?
Smart vision-driven founders with a disruptive and compelling business model and value proposition.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
E-commerce, ad tech. High competition, low barrier to entry, marketing spend is the only differentiator, low margins.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More than 50%.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Fintech in Milan is becoming a big thing! I am excited about the growth prospect of Moneyfarm and MainStreaming.
How should investors in other cities think about the overall investment climate and opportunities in your city?
Great opportunity to make not-so-expensive bets in a fast-growing market.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes. London may get seriously impacted by the ongoing pandemic (plus Brexit concerns) and lose its appeal as best EU startup and tech hub.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
I don’t foresee any particular tech sector suffering more than others. On the other hand, we have seen an incredible awareness and shift toward a more digitalized way to consume or buy products and services. Companies with high cash burn profiles that highly depend on fundraising activity may be struggling to secure additional financial resources and need to rethink their costs’ base.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Capital efficiency is the key and likely will be the key over the next 6-12 months. Our suggestion to all founders is to run a deep analysis of their growth drivers and costs’ base, focusing on cutting no core activities and functions whilst keep investing on key pillars of their equity story.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Founders reaction to this “new normal” has been fantastic and now more than ever it showed how good and lucky we were in investing on such great entrepreneurial talent.
Simone Riva, partner, H14
What trends are you most excited about investing in, generally?
I’m focused on growth stage investments in e-commerce, B2C and B2B marketplaces, enterprise software, fintech and Insurtech starting from Series B.
What’s your latest, most exciting investment?
Virtuo, Ornikar.
What are you looking for in your next investment, in general?
Solid growth trajectory together with sustainable unit economics; a clear technology edge and positioning versus main competitors; a complementary management team.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Oversaturated verticals: food delivery, neobanks, B2C insurances, e-commerce platforms, classifieds.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Less than 25% due to the limited number of growth-stage opportunities.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
In the Milan region, Bending Spoons is clearly one of the most successful companies from our portfolio (they haven’t raised any VC money). Broadly speaking in the Italian ecosystem startups with a nice business and strong founder/CEO are: Everli (former Supermercato24), Casavo, Boom, Shopfully (DoveConviene), Brumbrum.
How should investors in other cities think about the overall investment climate and opportunities in your city?
The Italian ecosystem is still underdeveloped compared to other cities for many reasons. The most relevant one has been the lower adoption of digital services across the Italian population causing limited traction in all B2C startups (post-COVID the situation has radically changed). The medtech and biotech ecosystem is much more developed than the digital and tech one. To date limited presence of international VC in the local market, implying lower competition.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I expect the development of tier two markets like CEE countries.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Startups operating in the travel space will face a tough environment for at least another 12-18 months. Only those that are well-funded will survive and be able to exploit the opportunities coming from the default of traditional/brick-and-mortar players. Software companies with clients in travel, retail and fashion will also have issues in terms of retention and new bookings.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Investment strategy. First, make sure portfolio companies have enough cash to survive the crisis and are well-positioned to exploit potential future opportunities. Second, keep on investing with smaller tickets on companies that proved to have a good recovery post-lockdown.
The biggest founders concern is the huge uncertainty related to continuous changes in COVID-related regulations (mainly lockdowns and travel bans). We advised to strongly reassess/shrink the cost base to be more agile and in parallel allocate most of the resources on product development and/or business development activities to strengthen the relationship with clients/suppliers.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes, we have observed in multiple B2C companies an acceleration in revenue growth coupled with customer acquisition at zero/very low CAC. Also, we observed a strong reactivation of historical cohorts with increase in purchase frequency. The revenue growth seems to be here to stay and not just a one-off effect of the second quarter.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
The VC ecosystem appears to be solid and to have supported companies even in tough situations. People have started to travel and to eat outside, trying to live normally.
Matteo Confalonieri, associate, Milano Investment Partners
What trends are you most excited about investing in, generally?
E-commerce, pet food, eco-friendly packaging, elderly caregiving, seafood alternative proteins, fast, casual food retails.
What’s your latest, most exciting investment?
PokeHouse, a pokè chain in Milan.
What are you looking for in your next investment, in general?
Anti-cyclicality, strong repeat rate, EBITDA positive, revenues > €10 million, strong unit economics.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
50%.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Food and fashion are the industries well-positioned in Milan and Italy. We are excited about Miscusi and PokèHouse for food, Velasca and Manebì for fashion.
How should investors in other cities think about the overall investment climate and opportunities in your city?
Milan ecosystem is growing both in terms of startups and VCs.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
The travel industry is the most exposed. The big opportunity for startups is the acceleration of the digitalization process in most of the industries.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
We are now more focused on anti-cyclical verticals and companies yet profitable.
Gianluca Dettori, partner and founder, Primomiglio
What trends are you most excited about investing in, generally?
AI, software, blockchain.
What’s your latest, most exciting investment?
Keyless.io.
Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Post-COVID megatrends.
What are you looking for in your next investment, in general?
Solid metrics.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Travel.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
80% local.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Brandon, Cortilia, Milkman are solid local startups.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes we do, we’ve already seen many interesting startups coming from different cities. Remote work supports this tool
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Travel, events and experiences.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Focus on the cash runway, as a fund we have reallocated our reserves.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
So far the ability of the Italian government to manage the COVID crisis has been solid.
Alessandro Petrich, partner, LVenture Group
What trends are you most excited about investing in, generally?
Digital platforms.
What’s your latest, most exciting investment?
Lybra Tech.
Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
I would like to see more proptech startups.
What are you looking for in your next investment, in general?
Startups active in the Industry 4.0 area.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Social networks, cryptocurrencies, travel platforms.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More than 90%.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Health tech, space tech.
How should investors in other cities think about the overall investment climate and opportunities in your city?
There is no great excitement. Italy has never been an attractive VC country, and now with the COVID crisis there is much more concern about the possibility of convincing investors.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Entrepreneurs have always done their business in the city they considered more strategic. So it is not a matter of COVID. Then, given that all top investors are located in great cities, we can state that the venture business will keep on developing the same way. Maybe Rome will gain some attractiveness from entrepreneurs going away from Milan.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Tourism of course. However, startups are naturally entities exposed to uncertainty. They are used to fighting to survive and are the best companies to rapidly find, test and deploy new business opportunities. Among those opportunities, for sure we can say remote work and accelerated digital adoption (finally).
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
The investment strategy kept on being the same. Of course with some attention to the most hit sectors. We are early-stage VC and highly risky investments are our game. The advice is not to give up … and explore new business models when their core business is affected by the crisis. The opportunities are all located in the extra mile, it is just a matter of doing it.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yep. Among our startups there are a few that have been highly affected by the pandemic, while others have finally found their momentum and started scaling.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
During the pandemic three of our startups closed their Series A investment and we realized a wonderful exit in the tourism sector. It means we are good in doing our job.
Any other thoughts you want to share with TechCrunch readers?
Come and invest in Italy — we have great startups that are ready to go global and fantastically skilled entrepreneurs.
Mario Scuderi, partner, CDP Venture Capital
What trends are you most excited about investing in, generally?
Great founders with global vision to address global challenges. Interested in ag/food tech, fintech, AI, deep tech, space economy.
What’s your latest, most exciting investment?
D-Orbit in the space economy and WeSchool in edtech.
Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
More deep tech, clean tech and climate change as well as food tech.
What are you looking for in your next investment, in general?
Disruptive innovation.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Fintech is a crowded space right now, AI is still often a buzz word rather than real innovation.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
90% local, 10% abroad with the aim to bring to our region part of the talent of international startups to cross-fertilize the ecosystem with different perspectives.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
E-commerce has finally reached interesting traction especially the ones on food e-commerce.
How should investors in other cities think about the overall investment climate and opportunities in your city?
Italy is creating momentum to find new investors and entrepreneurs are becoming more ambitious.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
[The idea of hubs] and [their] role in the ecosystem I think needs a deep review. Talent is well-spread all over the world … it is only a matter of access to resources and information and if all are online those can easily be found without necessarily being in the same physical place. I think the pandemic has created the conditions to make innovation resources more liquid than before.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Traditional segment, low digitalized I think will struggle a lot, retail for instance or tourism as well as mobility… all those sectors still were low digitalized and now they need to innovate and digitalize so probably in those spaces there will also be the most interesting opportunities to invest in medium terms. Telemedicine is going to be a must-have for instance, so far it has been a nice have!
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Cash is king during a crisis, so be focused on cash management and focus only on core activities that don’t necessarily burn cash. But in general no major changes in investment strategy.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Absolutely, yes. Some of our portfolio companies are overperforming.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
The results of some portfolio companies have been really positive. Personally i love working remotely. [It’s] more efficient [and] easy to manage work-life balance and also it gives the chance to not lose time in traveling and spend that time deeply analyzing new opportunities.
Any other thoughts you want to share with TechCrunch readers?
Innovation is the answer to crisis and crises arise when we are not producing enough innovation to address all new challenges … people need to be more confident with changes and think more liquid. Look at the past not to complain but to understand the mistakes.
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