Where is Italy at for startups and investment?

In partnership with Italian Tech Week taking place this week in Turin (with Elon Musk headlining), we took a look at where Italy is at in terms of startups and venture capital, and why startups matter for economies.

Report - Startups and investment: where is Italy at?

Italy underindexing in tech

The Italian economy is the 4th biggest is Europe, but Italy ranks at only number 12 for VC investment in Europe, with €3.6B raised in the last five years. The combined enterprise value of Italian startups is €21B, ranking 14th in Europe behind Ireland, Poland, Finland, Belgium and others.

This data suggests there is work to do to capitalize on the crucial innovation, R&D, value and job creation potential of startups in Italy. So far Italy has created just two unicorn companies valued at over $1B – Yoox and MutuiOnline – and is home to 12 future unicorns valued between $250M and $1B, just 6% of the UK’s total.

Progress and potential

But Italy has not been so short on innovation. A number of unicorn companies were initially born in Italy before relocating in order to scale overseas, like London’s Depop which was acquired by Etsy in June for $1.6B.

And some important recent steps have been taken to support the Italian tech ecosystem, including the CDP Venture Capital and the National Innovation Fund, Enea Tech for tech transfer (despite the ups and downs), and the Recovery fund, available to Italian tech companies.

Venture capital investment, though starting from a relatively low base, is also growing fast, up 2.6x year on year in H1 2021 to an all time high.

Rapid transformation

History has shown us that in tech, things can change fast. UIPath transformed international perceptions of tech in Eastern Europe almost single handedly. Miami has become one of the world’s most talked about tech hubs inside 18 months. And Italian tech is just 5-10 years earlier on the same growth path as Europe’s biggest tech nations.

Concerted and aligned efforts toward building a collaborative, bottom-up tech ecosystem, where ease of business is as frictionless as possible, where employees are incentivised to participate in Italian tech and where investors have the means to back the brightest companies, can contribute to rapid development of the Italian startup ecosystem.

Report - Startups and investment: where is Italy at?