Whereas funding for brand new startups in Italy has been rising, the nation nonetheless ranks eighth in Europe for enterprise capital, in accordance with Dealroom.
The newly shaped Italian Founders Fund (IFF) hopes to assist catch up by way of amount and high quality. The fund will make investments €50 million in 25 corporations and positions itself as an industry-agnostic, founder-friendly 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 revealed up to now: IFF led a 2023 funding spherical for HR tech startup Jet HR, forward of the April launch of buyer analysis platform Glaut.
“IFF is fixing the problem that early-stage founders in Italy face, which is discovering a high-conviction lead investor on the pre-seed and seed phases,” IFF founding associate Lorenzo Franzi (third from proper within the picture above) instructed TechCrunch.
Some might disagree with this analysis; enterprise capital companies working in Italy embrace CDP Enterprise Capital, Exor Ventures, LVenture Group, Milano Funding Companions, Pariter Companions, Primo Ventures and United Ventures.
Nonetheless, Franzi believes this nonetheless leaves a niche for early-stage capital. Both approach, the IFF might be a brand new supply of funding for a market the place new startups general obtain far much less funding than France, regardless of the 2 nations having related inhabitants sizes.
IFF additionally enhances accelerators like H-FARM and is a step up from the angel investing Franzi and different entrepreneur-turned-backers have been doing.
The previous CEO of laundry startup Laundrapp, who solely grew to become a associate at World Founders Capital in late 2022, stated the inherently “unstructured” strategy to angel investing can result in issues resembling restricted evaluation, advanced possession buildings and financing Spherical dimension is simply too small. IFFs can convey the construction of the fund into their funding course of or they will really function it after the funding is made.
For instance, Franzi stated IFF is ready to assist portfolio corporations with key recruitment, enterprise growth and strategic partnerships. Jet HR CEO Marco Ogliengo agrees, noting that IFF’s added worth comes from the truth that it has “mainly the backing of each profitable Italian founder.”
This can be a little bit of an exaggeration. However in accordance with Franzi, about 100 of IFF’s supporters are certainly Italian entrepreneurs. He added that they arrive from totally different generations and industries however share a standard objective: to make Italy one of the best place in Europe to open an organization.
That is an bold objective, particularly since some ache factors are past the IFF’s remit: There’s nothing non-public enterprise capital companies can do to steadiness excessive taxes and paperwork. Just lately, there have been elevated public efforts to extend the attractiveness of the nation and its tech sector. However not like CDP Capital, which is backed by state businesses, IFF is fully privately funded.
Within the absence of public funds or institutional restricted companions, IFF is free to speculate the place it sees match. It should use this geographical flexibility to assist Italian founders working overseas in addition to international startups concerned with getting into the Italian market.
Hyperlinks with international nations go each methods, and IFF goals to have international enterprise capital funds co-invest in its portfolio in preliminary or subsequent rounds. It should additionally assist as a result of a few of its restricted companions are common companions in international funds, and it plans to again Italian founders with world ambitions.
World Italian startups embrace Bending Spoons, proprietor of in style functions and companies resembling Evernote and Meetup, valued at $2.55 billion. As a succession of Italian entrepreneurs return house to launch their subsequent enterprise, it appears becoming that they now have a founder-led fund to assist them.
IFF might be managed by KOINOS Capital, a personal fairness fund that has been increasing into enterprise capital, and its CEO Marco Morgese talked about examples of founder-led funds in different markets, resembling Founders Fund within the US or extra lately Galion .
IFF’s adoption of this mannequin in Italy is one other signal of a maturing ecosystem. On the enterprise capital aspect, the numbers are enhancing, however there may be nonetheless extra work to be carried out. “In Italy, it’s essential to problem the established order of course of, pace and entrepreneur-centric mentality,” Franzi stated.
