Italy's startups to watch and a surge of M&A | July 2024
Top investors pick their Italian startups to watch, Italy gets new VC funds, and local M&A deals heat up
Ciao amici,
It’s been a quieter month on the events front after the early summer conference season, and the next time I’ll be heading for the cities — Milan, Bologna and Turin — will be in the second half of September for Italian Tech Week. Don’t forget to book your tickets.
For now, it seems like most of the country’s tech scene will be winding down in a few days for the August holidays. While the normal edition of the month end Il Digestivo will also be having an August hiatus, I’ll be bringing you a special Ferragosto edition of the newsletter on the 15th August with a juicy interview for you to dig your teeth into while sunbathing at the lido🏖️ .
That said, July has not been short of local news. This month, we’ve seen a wave of Italian deals rush through the finish line just in time for the summer break.
From eyewear titan Luxottica’s July spree, to Bending Spoon’s fourth acquisition of the year, Italy’s had its fair share of companies taking advantage of falling valuations to expand their offerings. At the same time, there’s been some more capital injections into Italy’s tech world — both on the investors and startup side.
Highlights from this month include:
Three top investors pick their 9 Italian startups to watch
Italy’s pension funds and insurers back a new VC fund (!)
July’s hottest M&A deals
Amy
Fresh funds
💸 Nextalia raises €150m for new venture fund. Milan-based private investment firm Nextalia raised a sizeable €150m this month for its new venture fund, Nextalia Ventures. It plans to back B2B startups at the Series A and B stage in Italy, the rest of Europe and the US, with a focus on the fintech, insurtech, edtech, agritech and healthtech sectors. But the thing that really caught my eye? In a turn up for the (Italian) books, Nextalia gained significant backing from institutional investors — known in Italy for their reluctance to back the VC asset class. Nextalia says it raised 40% of the new fund from pensions funds and institutional investors; 30% from Italian banking and insurance groups; and 30% from family offices and entrepreneurs. Are things slowly changing?
🤑 Rancilio Cube’s second €50m fund of funds. This month, Rancilio announced it’s allocated another €50m to a second fund of funds focused on investing in international VC firms. Rancilio’s first fund of funds was €50m — 65% of which was allocated for investing in international venture funds that recently included Seedcamp, Cherry Ventures and HV Capital in Europe, and Bessemer in the US, and 35% of which was for direct deals that included startups like Headspace, SumUp, N26 and SpaceX. Rancilio says it closed 2023 with more than €60m in assets, 40 direct startup investments and 75 international venture fund investments.
🪴 Primo Ventures raises €40m for new climate fund. Italian VC firm Primo Ventures — which counts Qomodo and Ecosmic among its portfolio — has raised €40m from Italy’s state-backed investor CDP Venture Capital in the first close of a new climate-focused fund, Primo Climate. The target size for the new fund is €60m, and the firm plans to back 10-13 Italian climate tech startups in sub-sectors ranging from renewable energy to circular economy and waste management with the fund.
Startup rounds
💰 Rome’s Exein raises €15m Series B. Founded in 2018 and HQ’d in Rome, Exein has developed cybersecurity software for the Internet of Things — i.e., it doesn’t just protect computers, but provides security for hardware like robotic machinery on production lines. The round was led by new investor 33N, a VC firm whose bread and butter is cybersecurity, and joined by new investor Partech (who recently opened an Italian office). Existing investors United Ventures, eCAPITAL and Future Industry Ventures also followed on.
☁️ Bologna’s Cubbit raises €11.6m. Cloud storage startup Cubbit has raised a €11.6m funding round, co-led by London-based VC firms Localglobe and ETF Partners — marking the first investment in Italy for both firms. It’s almost double the startup’s original €5.5m funding target. Cubbit says it’s the first European cloud storage provider that doesn’t have to build or maintain physical data centres. Instead, it’s built what it calls a ‘geo-distributed’ cloud storage system, whereby companies can split their data into encrypted ‘chunks’ that can be stored in multiple locations around the world. It says this makes it more secure, climate friendly, and cheaper than existing cloud storage providers. Cubbit made €811k in revenues in 2023. If you want to learn more about Cubbit, listen to Stefano Onofri’s recent interview on Made IT 👇🎧
🚕 Elsewhere, luxury car transfer startup Limolane raised €35m from Fabio Narlucci’s FNDX VC and multi family office Cherry Bay Capital.
M&A deals
🥄 Bending Spoons continues US charm offensive with acquisition of Issuu. The acquisition of the digital publishing platform marks its fourth acquisition of the year, and its third in the US (after events platform Meetup and Mosaic Group’s suite of mobile apps in January). When I spoke to CEO Luca Ferrari back in April, there were no signs the company would be slowing down its acquisition streak anytime soon. In fact, he said an IPO would be in the “not-too-distant future”, but the timing would be determined “more by the pipeline of acquisitions than by the market”.
🛍️ Luxottica buys lifestyle brand Supreme for $1.5bn, and acquires an 80% stake in German medtech Heidelberg Engineering. The Italian eyewear giant purchased Supreme for $600m less that its previous owner, VF Corporation, bought the streetwear brand for in 2020. Meanwhile, it says the Heidelberg move is part of its goal to improve patient care and ties in with its medtech strategy. The July shopping spree follows its acquisition of Japanese eyewear brand Washin in April, as it muscles in on the Japanese market.
🏦 Unicredit acquires a neobank and the banking software it’s built on for €370m. The Italian banking giant has acquired Belgian digital bank Aion, together with the Polish cloud banking software startup Vodeno. It’s a bold move that reminds us just how fast a well-capitalised bank can fast-track its digital transformation, when fintech assets (that took years to build) are running cheap. Unicredit CEO Andrea Orcel said the bank would use the fintech assets as a “sandbox to develop, test and innovate for the benefit of our broader group”, and speed up its entry to client segments and markets across Europe.
Midway into 2024, Italian startups have raised a total $613m, according to Dealroom data.
This means Italian startups are on track to raise similar amounts to 2023, when funding totalled $1.2bn. It’s not an uptick as we come out of the funding slump, but charting a startup ecosystem’s growth isn’t all about funding data. What investors repeatedly tell me is they need to see better deal flow coming out of Italy.
To find out who’s worth having on your radar, I spoke to some in-the-know VCs for their pick of the nine most promising Italian startups that don’t feature in their own portfolios.
Andrea Gennarini, cofounder and managing partner, 2100 Ventures
Arke
Founded: 2024
HQ: Milan
Sector: B2B software
Michela Andreolli and Matteo Luigi Ferravante cofounded Arke, a customisable enterprise resource planning (ERP) software system specifically designed for Europe’s vast market of manufacturing SMEs. CEO Andreolli spent some time as an entrepreneur in residence with Vento, and in a recent video posted by the venture builder, said that Arke is targeting €200k ARR by Q4 2024.
“Arke’s set itself the challenge to digitise the long tail of small businesses, which is massive — no one’s really cracked it in Europe,” says Gennarini.
“I loved that this idea is coming from an Italian-based startup. Michela’s enthusiasm for building Arke is contagious."
Stema
Founded: 2022
HQ: Italy
Sector: HR tech
Stema is a recruitment software startup specifically focused on engineers. The startup says it uses AI to engage in personal conversations with candidates, guiding them to their next job.
“Within the first 9 months, fully bootstrapped, Stema managed to gather more than 10% of the national engineering workforce on its platform,” says Gennarini. “It already counts some large corporates — like Accenture, Generali, and A2A — among its clients.”
Cofounder Vito Lomele is a serial entrepreneur — he’s the founder of tax management platform Fiscozen and previously founded HR tech Jobrapido.
Sizable Energy
Founded: 2022
HQ: Italy
Sector: Renewable energy
Sizable Energy is a renewable energy startup that’s developed an offshore pumped-hydro storage system.
“By combining the established technology of pumped hydro with the vast scalability of offshore deployment, Sizable is able to tackle two of the biggest challenges in energy storage: scalability and economic viability,” says Gennarini.
The company says it’s already tested its technology through experiments in wave basins and proof of concept demonstrations at sea.
Gennarini says he’s particularly impressed by cofounder and CEO Manuele Aufiero’s deep technical background.
Alessandra Mazzilli, investor at Earlybird Venture Capital
Autone
Founded: 2021
HQ: London/Milan
Sector: SaaS
Autone has built an inventory optimisation and demand forecasting platform for apparel, accessories and furniture brands. Founded in 2021, it raised a €4.2m seed round Speedinvest, Seedcamp, and Y Combinator in October 2023. Cofounder and CEO Adil Bouhdadi is based in Milan, and had more than a decade’s experience in luxury fashion before joining Y Combinator’s S22 cohort.
“Autone’s product solves one of the largest problems in retail commerce, which is caused by poorly managed inventory and inability to predict demand: what will sell, where and how much,” says Mazzilli.
“The team blends a unique background mix of data science and fashion and have delivered very strong topline growth right from the start.”
Microsignals
Founded: 2024
Sector: Travel tech
There’s not much publicly available information about Microsignals yet, but it aims to establish itself as the premier flight-focused online travel company.
Mazzilli says the startup has created an algorithm that exploits the price elasticity of Meta Search platforms, while optimising for ancillary revenue streams.
“Founded by three cofounders with extensive experience in the travel sector, they first collaborated at a top European online travel agency, where they worked together for over eight years before starting MicroSignals.”
LinkedIn reveals that one of the cofounders is Guk Kim, who was previously chief operating officer at lastminute.com.
Simone Riva, senior principal at Partech
Insilico Trials
Founded: 2016
HQ: Trieste
Sector: Life sciences
Founded in 2016, Insilico Trials says it uses computer modelling, simulation and artificial intelligence to design and test drugs and medical devices. The aim is to reduce the time, cost, and risk associated with traditional physical trials.
The startup says it’s working with a network of 70+ universities and research centers worldwide and is currently part of 5 EU-funded healthcare projects: SimCardioTest, Brainteaser, In Silico World, Disc4All and TranSys.
“There is a big regulatory push both in EU and in the US into this direction and the company has the potential to develop a global scale,” says Riva.
Spiagge
Founded: 2020
HQ: Rimini
Sector: SaaS
It really couldn’t get more Italian than this. Spiagge is a startup that’s designed enterprise resource planning software for private beaches (i.e., lidos) to manage their supplies, and an online booking platform for beachgoers to book and pay for umbrellas and beach services.
“Spiagge has demonstrated it can grow profitably to a good scale with limited capital,” says Riva. “It will be interesting to see how their business fares beyond the Italian market.”
Aptus.ai
Founded: 2018
HQ: Pisa
Sector: Regtech
Aptus.ai aims to make compliance with financial regulations easier for companies with its software, which uses AI to create machine readable versions of legal documents, track regulatory trends, and is updated in real-time on regulatory changes.
In November 2023, it raised a €3m pre-Series A funding round led by Italian VC P101, and joined by CDP’s Fin+Tech accelerator and some business angels.
That’s it from Il Digestivo this month, we hope you’ve enjoyed our third edition.
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