The Italian Founders Fund (IFF) has officially launched, marking a significant milestone for the Italian venture capital landscape. With €50 million earmarked for investment, IFF aims to support 25 startups, prioritizing those with global aspirations. This sector-agnostic fund promises to bridge the gap in early-stage funding, addressing a critical need for Italian entrepreneurs.
Empowering Italian Entrepreneurs
IFF’s establishment comes at a time when Italy is striving to catch up with its European counterparts in venture capital investment. Despite an increase in funding, Italy still ranks eighth in Europe, trailing behind countries like France and Germany. IFF’s founding partner, Lorenzo Franzi, emphasized the fund’s commitment to becoming a high-conviction lead investor for early-stage startups, particularly at the pre-seed and seed stages.
The fund’s portfolio already includes four companies, with a fifth investment on the horizon. Notably, IFF has led funding rounds for Glaut, a customer research platform, and Jet HR, an HR tech startup. Franzi highlighted that IFF’s support extends beyond capital, offering hands-on assistance in key areas such as hiring, commercial expansion, and strategic partnerships.
Filling the Funding Gap
While Italy boasts several venture capital firms, including CDP Venture Capital, Exor Ventures, and LVenture Group, Franzi argues that there is still a significant gap in early-stage funding. IFF aims to fill this void, complementing existing accelerators like H-FARM and providing a structured investment approach compared to traditional angel investing. This structure helps avoid issues such as limited analysis, complex cap tables, and undersized funding rounds.
Jet HR CEO Marco Ogliengo praised IFF’s support, noting the fund’s unique value-add comes from its backing by a broad network of successful Italian entrepreneurs. Approximately 100 of IFF’s backers are Italian founders from diverse generations and sectors, all united by a common goal: to elevate Italy’s status as a prime location for launching a startup.
Overcoming Challenges
Despite IFF’s ambitious goals, several challenges remain beyond the fund’s control. High taxes and bureaucratic hurdles continue to pose significant obstacles for Italian startups. While public efforts are underway to enhance the country’s tech sector, IFF operates without public funding, relying entirely on private capital. This independence allows IFF the flexibility to invest in both Italian founders operating abroad and foreign startups eyeing the Italian market.
IFF’s strategy includes fostering international connections by encouraging foreign venture capital firms to co-invest in its portfolio companies. Some of IFF’s limited partners (LPs) are general partners (GPs) in foreign funds, facilitating cross-border collaboration and investment.
A Promising Future
IFF’s launch is a promising development for the Italian startup ecosystem. The fund’s focus on founder-led initiatives mirrors successful models in other markets, such as the U.S.’s Founders Fund and France’s Galion.exe. Managed by KOINOS Capital, IFF benefits from the expertise of a private equity firm expanding into venture capital.
Global success stories like Bending Spoons, the Italian tech company behind apps like Evernote and Meetup, exemplify the potential of Italian startups. As serial entrepreneurs return to Italy to start new ventures, they now have a robust, founder-friendly fund in IFF to support their ambitions.
Conclusion
The Italian Founders Fund represents a significant step forward for Italy’s venture capital scene. By addressing early-stage funding gaps and leveraging a network of successful entrepreneurs, IFF aims to propel Italian startups onto the global stage. As IFF supports founders with both capital and strategic guidance, it promises to be a catalyst for innovation and growth in Italy’s burgeoning tech sector. From my perspective, this initiative not only fills a critical need but also signals the maturing of Italy’s startup ecosystem.
