The venture capital: an extra weapon for Italy

09 May 2017

Venture Capital is an incredible resource for a country’s economic development and, for this reason, we think it is of fundamental importance to Italy’s growth. Through venture capital investments – operations designed to create and develop startups – it is possible to create innovation and develop new entrepreneurial talents.

Let’s think about the United States, the country where venture capital has had a major impact on the development of innovative companies and job creation. We believe that Italy has the same capacity of the United States in terms of creating innovation, thanks to an entrepreneurial spirit rooted in our territory. What distinguishes us from the virtuous models of venture capital is not the talent, the creativity, or the desire to change the world. What differentiates us is the small number of venture capitalists investing in startups.

Venture capital in Italy

In Italy, the venture capital market, intended as a form of raising capital used by startups, is still far from the EU standards: our neighbors, such as Spain, have invested in venture capital about 4 times as much invested in our country in 2016. However, the venture capital market is growing.

2016 was significant for the growth of venture capital transactions. The number of transactions in seed and startups increased, reaching 128, as opposed to the 122 transactions of 2015, and registered an increase of 5%. Although the total number of operations suffered a slight decline, from 342 in 2015 to 322 in 2016, the total investment in Italian startups in the past year has exceeded €178 million, almost 80 million more than the previous year.

The need to increase investments remains strong, and that’s what we, like LVenture Group, are trying to do. Today we are one of the most active venture capital companies at European level, with 7 million euros invested directly in startups since the beginning of the activity, in addition to the almost 21 million euros invested by the partners of the group. Along with LUISS ENLABS, and LUISS University and its partners, we continuously work towards becoming a benchmark for startups at a European level.

A country under acceleration

The biennium 2015-2016 has recorded the largest number of closing investment rounds in the last 15 years in Italy and today venture capital operations are increasingly turning towards the most innovative and highest performing sectors of the market.

In fact, more than 70% of total funds in 2016 have been aimed at digital startups, particularly those active in the development of web and mobile applications.

The figures of the last two years are important not only for volume, but also for the quality of operations. Previously, investments of over $10 million did not exist in Italy, yet in 2015-2016, 10 investment rounds reached $10 million, having one case reach $30 million (AIFI data).

By looking at the results from the past few years, it becomes clear that venture capital is the strongest weapon Italy can utilize to create innovation and to develop new entrepreneurial talents. Facebook, the startup financed by venture capitalists that helped create an estimated 4 million jobs, should serve as a major example for our country. The skills that enabled Facebook’s success are evidently present in Italy, but capitals who strongly believe in the country’s talents are fundamental in causing them to blow up. We believe we can achieve this, do you?