Sequoia invests in Italy, and VCs share their 2025 predictions | November 2024

Volta appears from nowhere with a star-studded pre-seed round, Bending Spoons makes its sixth acquisition of the year, and top local investors share their hot takes for 2025

Ciao amici, 

November means two things in European tech land: Helsinki’s annual Slush conference, and Atomico’s state of European tech report.

I’ll be delving into the latter today, because it reveals some home truths about the state of Italian tech. By the time this lands in your inboxes, we’ll almost be in December (!) So I’ve also been chatting to some top local investors to get their crystal ball predictions for 2025 in Italian tech. Scroll down for their hot takes.

Plus, this month’s not been short of news within the ecosystem. I zoom in on …

• Another acquisition in the bag for Bending Spoons

• Fresh investor incentives for Italy

• Italy’s biggest-ever pre-seed round

Amy

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🛍️ Bending Spoons makes sixth acquisition of 2024. Italian unicorn Bending Spoons this week acquired cloud video streaming platform Brightcove for $233m. The transaction is expected to close in the first half of 2025. Commenting on the news, Bending Spoons CEO Luca Ferrari said: “When Bending Spoons acquires a business, we do so with the intention of owning and operating it indefinitely.”

When I spoke to 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”.

It’s the Milan-HQ'd startup's sixth acquisition of 2024, and comes three months after its acquisition of Dutch file-sharing company WeTransfer. Following this acquisition, Bending Spoons confirmed it plans to lay off 75% of WeTransfer’s 350-odd workforce. At the time WeTransfer was acquired, its CEO Alexandar Vassilev said in a blog post that the company has stayed "healthy and profitable," after pulling out of an IPO two years prior. Brightcove, on the other hand, has seen its market cap plummet since listing on the Nasdaq in 2012 — so it wouldn’t be surprising to see layoffs on the horizon after this acquisition. Other Bending Spoons acquisitions this year include:

• US-based digital publishing platform Issuu in July

• US-based events platform Meetup in January

• US-based Mosaic Group’s suite of mobile apps in January

• The remains of one-time UK tech darling Hopin in April

Bending Spoons abandoned talks to acquire US video streaming giant Vimeo earlier this year.

💸 Italy ups its investor incentives for high-growth companies. The UK government’s SEIS and EIS schemes have been widely praised across Europe for their successful incentivisation of tech investments through the provision of tax breaks. Now, Italy is taking a leaf out of the UK’s book and upping the benefits for private investment in local startups. Last week, the Italian parliament approved an increase from 50% to 65% in tax deductions on private investments in startups that are within three years of incorporation. And if the startups fail, this deduction remains valid.

What’s more, Italian startups can now retain their startup status within the government registry for up to 9 years — welcome news for R&D intensive companies that take a while to build, for example in biotech and deeptech. Lastly, the government also approved a new law that requires Italian pension funds to allocate a certain percentage of their assets to venture capital firms (which can be based anywhere but that must invest this money in Italy), to retain their current capital gains exemption. This is welcome news for Italian startups, too. So far, CDP’s local investment mandate has seen pan-European VCs like Partech, Earlybird, and Eurazeo open offices in Italy — and this new law may see more follow suit.

Time will tell whether these incentives lead to more investment in venture capital. Meanwhile, investors tell me over and over that the real problem is not access to capital, but a lack of good quality dealflow in Italy.

🤑 Volta raises €6m in Italy’s biggest-ever pre-seed round

Volta, a software-as-a-service startup focused on B2B sales, has raised €6m from a star-studded list of international investors, most of whom are investing in Italy for the first time. Volta’s pre-seed was led by Emblem, a new VC fund HQ’d in France. Emblem was joined by Founders Future, Sequoia, Robin Capital, a16z through its scout programme, Exor, B Heroes, Ithaca investments, and several more international angels and investors.

So what are they backing? Volta’s software aims to make the clunky tasks that make up the B2B ordering process — like order automation, sales boosting and cost optimisation — digital, and therefore more efficient for businesses (brands, wholesalers, and distributors) that sell to other businesses. Volta’s €6m round just beats Jet HR’s June 2023 €4.7m pre-seed round to the title of Italy’s largest-ever pre-seed round.

“The scale of investment into Europe’s tech ecosystem has grown consistently over the past decade, but once we normalise for GDP to adjust for the relative size of each country, it highlights which governments are putting tech high on the agenda.” — Atomico, State of European Tech 2024

• According to Atomico’s data, which tracks capital invested as a share of each European country’s GDP (%) over the last decade, Estonia comes out on top in the world for investment in tech relative to GDP. Its VC funding accounts for 1.17% of GDP over the past decade. But there are quite a few large European countries missing from the top 30 regions in the world when ranked by relative scale of investment into tech. These include Spain and Italy, which are ranked 34th and 60th, respectively, behind a number of developing countries — including Kenya and Uruguay. In Italy’s case, it may be too simplistic to blame its ranking on the government and funding alone. Several founders and investors I’ve spoken to in the last month say that while some bureaucracy and policies could definitely be made friendlier for startups, that avoids the real elephant in the room: Italy has been lacking the quality ideas for investors to back over the last ten years.

• However, if we look at more recent data, it’s encouraging to see that Italy is beginning to catch up with Europe’s more longstanding tech hubs. Atomico’s compilation of compound annual growth rate (CAGR) data from the last decade shows that Italy has attracted a much larger share of funding in Europe in the last few years. In fact, Italy has seen an average growth rate of 23% in investment year-on-year over the last decade —  ten percentage points above the European average of 13%. Italy’s positive trajectory has been boosted by the arrival of its first unicorns and large growth rounds, including Scalapay, Satispay and Bending Spoons’ megarounds of more than $300m over the last couple of years. Plus, the size of Italy’s early stage startup funding rounds are catching up with European peers — as Volta and Jet HR’s pre-seed rounds go to show.

That’s it for this month, unless you’re curious to read what Italian VC investors are predicting for 2025 in our subscriber section below …

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What’s in store for Italian tech in 2025? To find out, I’ve asked some of the country’s top investors for their top predictions for the year ahead.