Whereas funding for Italian startups has been rising, the nation nonetheless ranks eighth in Europe by VC funding, in response to 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 consists of 4 corporations, with a fifth deal within the works. Two have been disclosed to this point: Earlier than customer research 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 associate Lorenzo Franzi (third from the suitable within the image above) informed TheTrendyType.
Some might disagree with the prognosis; VC corporations that function in Italy already embody CDP Venture Capital, Exor Ventures, LVenture Group, Milano Investment Partners, Pariter Partners, Primo Ventures, and United Ventures.
Franzi, nonetheless, thinks that this nonetheless leaves a spot for early stage capital. And both method, 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, even though the 2 international locations have the same inhabitants dimension.
IFF can 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 associate at Global Founders Capital till late 2022, he stated that the “unstructured” method inherent to angel investing can result in a number of points comparable to restricted evaluation, advanced cap tables, and undersized funding rounds. IFF can deliver the construction of a fund to its funding course of, but in addition be hands-on after it invests.
As an example, IFF was capable of assist portfolio corporations 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 principally each profitable Italian founder.”
That could be hyperbole; however in response to 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 very best spots in Europe to open an organization.
That’s an bold objective, particularly since among the ache factors are out of IFF’s remit: There’s not a lot a non-public VC agency can do to counterbalance high 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 agencies, IFF is totally privately funded.
In absence of public funding or institutional LPs, IFF is free to take a position wherever it sees match. It’ll use this geographical flexibility to additionally again Italian founders working overseas, in addition to overseas startups eager about coming into the Italian market.
International 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 widespread apps and providers like Evernote and Meetup, which is valued at $2.55 billion. And with serial Italian entrepreneurs returning home to discovered 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 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 yet another signal that the ecosystem is maturing. Relating to enterprise capital, numbers are bettering, however there’s nonetheless extra to do. “In Italy, difficult the established order on processes, pace, and an entrepreneur-focused mindset is crucial,” Franzi stated.
