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With €50 million to take a position, Italian Founders Fund appears to be like for entrepreneurs with world ambitions

Whereas funding for Italian startups has been rising, the nation nonetheless ranks eighth in Europe by VC funding, in keeping with Dealroom.

Newly created Italian Founders Fund (IFF) hopes to assist with the catching up, each in amount and in high quality. With €50 million to take a position into 25 firms, it additionally positions itself as a sector agnostic, founder pleasant fund that understands the ache factors of entrepreneurs.

IFF’s portfolio already consists of 4 firms, with a fifth deal within the works. Two have been disclosed thus far: Earlier than buyer analysis platform Glaut in April, IFF led a 2023 spherical of funding into HR tech startup Jet HR

“IFF is addressing the problem for early stage founders in Italy to discover a excessive conviction lead investor on the pre-seed and seed phases,” IFF founding companion Lorenzo Franzi (third from the fitting within the image above) advised TechCrunch.

Some could disagree with the analysis; VC companies that function in Italy already embody CDP Enterprise Capital, Exor Ventures, LVenture Group, Milano Funding Companions, Pariter Companions, Primo Ventures, and United Ventures.

Franzi, nevertheless, thinks that this nonetheless leaves a niche for early stage capital. And both manner, IFF comes up as a brand new supply of capital for a market whose startups collectively obtain far much less funding than France’s, for example, even though the 2 nations have an identical inhabitants dimension.

IFF can also be a complement to accelerators akin to H-FARM, and a step up from the angel investing that Franzi and different entrepreneurs turned backers had been partaking in. 

A former CEO at laundry startup Laundrapp turned companion at International Founders Capital till late 2022, he stated that the “unstructured” method inherent to angel investing can result in a number of points akin to restricted evaluation, complicated cap tables, and undersized funding rounds. IFF can carry the construction of a fund to its funding course of, but in addition be hands-on after it invests. 

As an illustration, IFF was in a position to assist portfolio firms with key hires, business enlargement, and strategic partnerships, Franzi stated. Jet HR CEO Marco Ogliengo concurred, noting that IFF’s value-add comes from the truth that it’s “backed by principally each profitable Italian founder.”

That could be hyperbole; however in keeping with Franzi, round 100 of IFF’s backers are certainly Italian entrepreneurs. He added that they arrive from a variety of generations and sectors, however with a shared aim: to place Italy on the map of the most effective spots in Europe to open an organization.

That’s an bold aim, particularly since among the ache factors are out of IFF’s remit: There’s not a lot a personal VC agency can do to counterbalance excessive taxes and paperwork. There have been more moderen public efforts to spice up the nation’s attractiveness and its tech sector; however not like CDP Capital, which is backed by state businesses, IFF is completely privately funded.

In absence of public funding or institutional LPs, IFF is free to take a position wherever it sees match. It can use this geographical flexibility to additionally again Italian founders working overseas, in addition to international startups excited by getting into the Italian market.

International connections go each methods, with IFF aiming to get international VC funds to co-invest in its portfolio, both initially or in follow-on rounds. It can additionally assist that a few of its LPs are GPs of international funds, and that it plans to again Italian founders with world ambitions.

International Italian startups embody Bending Spoons, the proprietor of fashionable apps and providers like Evernote and Meetup, which is valued at $2.55 billion. And with serial Italian entrepreneurs returning house to discovered their subsequent ventures, it appears becoming that they now have a founder-led fund to again them.

IFF will likely be managed by KOINOS Capital, a personal fairness fund that has been increasing into VC, and whose CEO, Marco Morgese, famous examples of founder-led funds in different markets, akin to Founders Fund within the U.S. or extra just lately, Galion.exe in France.

Seeing IFF undertake this mannequin in Italy is yet one more signal that the ecosystem is maturing. In relation to enterprise capital, numbers are enhancing, however there’s nonetheless extra to do. “In Italy, difficult the established order on processes, pace, and an entrepreneur-focused mindset is important,” Franzi stated.



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