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 speculate into 25 firms, it additionally positions itself as a sector agnostic, founder pleasant fund that understands the ache factors of entrepreneurs.
IFF’s portfolio already contains 4 firms, with a fifth deal within the works. Two have been disclosed to date: 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 companion Lorenzo Franzi (third from the fitting within the image above) instructed TechCrunch.
Some could disagree with the analysis; VC companies that function in Italy already embody 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, for example, even if the 2 international locations have an identical inhabitants measurement.
IFF can be a complement to accelerators equivalent to H-FARM, and a step up from the angel investing that Franzi and different entrepreneurs turned backers had been participating in.
A former CEO at laundry startup Laundrapp turned companion at World Founders Capital till late 2022, he stated that the “unstructured” method inherent to angel investing can result in a number of points equivalent to restricted evaluation, complicated cap tables, and undersized funding rounds. IFF can convey the construction of a fund to its funding course of, but additionally be hands-on after it invests.
For example, IFF was capable of assist portfolio firms with key hires, business enlargement, and strategic partnerships, Franzi stated. Jet HR CEO Marco Ogliengo concurred, noting that IFF’s value-add comes from the truth that it’s “backed by mainly 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 purpose: to place Italy on the map of the very best spots in Europe to open an organization.
That’s an formidable purpose, particularly since a number of the ache factors are out of IFF’s remit: There’s not a lot a non-public VC agency can do to counterbalance excessive taxes and paperwork. There have been newer public efforts to spice up the nation’s attractiveness and its tech sector; however in contrast to CDP Capital, which is backed by state businesses, IFF is completely privately funded.
In absence of public funding or institutional LPs, IFF is free to speculate wherever it sees match. It’ll use this geographical flexibility to additionally again Italian founders working overseas, in addition to overseas startups thinking about getting into the Italian market.
Overseas connections go each methods, with IFF aiming to get overseas VC funds to co-invest in its portfolio, both initially or in follow-on rounds. It’ll additionally assist that a few of its LPs are GPs of overseas funds, and that it plans to again Italian founders with international ambitions.
World Italian startups embody Bending Spoons, the proprietor of standard apps and companies like Evernote and Meetup, which is valued at $2.55 billion. And with serial Italian entrepreneurs returning residence 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 non-public fairness fund that has been increasing into VC, and whose CEO, Marco Morgese, famous examples of founder-led funds in different markets, equivalent to Founders Fund within the U.S. or extra lately, Galion.exe in France.
Seeing IFF undertake this mannequin in Italy is yet one more signal that the ecosystem is maturing. In terms of enterprise capital, numbers are enhancing, however there’s nonetheless extra to do. “In Italy, difficult the established order on processes, velocity, and an entrepreneur-focused mindset is important,” Franzi stated.
