Despite the wide heterogeneity of sources and methodologies, all the data on investments in startups tell us about a rapidly growing sector, especially in recent years. In 2020, on a global level, Venture Capital (VC) set a new record, touching the threshold of 300 billion invested. Of these, about 43 billion were aimed at the European market with a + 14% compared to the previous year. The pandemic seems to have pushed Corporates towards a more convinced participation in the investment rounds in VC: developing synergies with the world of startups becomes a way to control innovation in some rapidly expanding areas – e.g. sustainability, smartworking, and commerce – to then adapt and integrate it to your core business.
Startup Italia, the Italian Tech database
Start Up Italia, the photo of nine years of growth
The trend of the Italian VC market is not exempt from these changes and supports the European dynamics, even if on a smaller scale and with its structural and cultural peculiarities. The projections at the end of 2021 tell us that this will be the year in which the 1 billion investment ceiling in startups in our country will be exceeded: another record. The road traced almost 20 years ago by law 221/2012 is bearing fruit, stimulating the entire ecosystem of Italian innovation. However, it is equally evident that our country is lagging behind its main European partners. We are growing, but with less intensity than in France, Germany, the United Kingdom and (at times) Spain. The gap in domestic VC investment volumes vis-à-vis these countries has visibly increased over the past 15 years.
Over the past 20 years, the number of innovative startups present in the country has grown almost constantly. In the second quarter of 2021, therefore in June, there were over 13,500, an almost double presence in the last 4 years. Not only that: their specific weight within the broader family of new joint-stock companies has also increased regularly: a sign of the fact that setting up an innovative startup in our country is increasingly coveted, but (perhaps) also easier and more convenient. .
On closer inspection, it is the entire innovation ecosystem that has been able to thrive with a certain continuity, even through the pandemic. If you zoom in on the time line in correspondence with the most critical phase of the pandemic and compare the data of June 2021 with those of December 2019, there is not only an increase in the number of startups and in the value of overall production, but also a increase of other innovation actors, such as innovative SMEs and incubators.
In terms of investments, 2019 had recorded a total amount of capital invested in startups of 723 million. Today, in the first half of 2021 and after a 2020 marked by stability (729), the sector is back on track: 661 million (+ 155% compared to the same period of the previous year). At the end of the year we could exceed one billion.
The socio-demographic evolution of the startupper population gives us a photograph, however, that is anything but dynamic. If, as might be expected, the startupper population is on average younger than that of the other joint stock companies, it is equally true that, among the decision-making ranks of the world of innovative startups, the female component (18%) is even more marginal than it already is in other types of firms (21%). Almost as if another gender gap is added to the traditional gender gap of ‘doing business‘, that of making it technological and innovative. The territorial distribution of innovative startups also reflects another important gap present in our country. Even with some exceptions, the location of the places of Italian innovation – as well as of investments – re-proposes the theme of a two-speed country, of a North and a South that are still too far away. A look at the 10 Italian provinces with the highest startup density summarizes the issue: Trento, Milan, Pordenone, Ascoli Piceno, Cuneo, Bologna, Udine, Padua, Pisa, Trieste.
Of course, most of the investments go to startups in the ICT sector. But that’s not all: significant flows of the Italian VC go to support other sectors with an increasingly technological soul: that of financial services and healthcare. The Italian proposal, in particular, seems particularly attractive in Fintech: in the ranking of the 2020 VC rounds of at least 10 million, the podium is entirely occupied by startups engaged in the development of these services: we are talking about Satispay, SupplyME and AideXa.
The startuppers, inside the pandemic
From a survey conducted by SWG in November 2020, in the middle of the pandemic, on a sample of 500 Italian innovative startups, a picture emerged marked by a certain suffering – primarily in terms of access to credit – that the Covid emergency has certainly contributed to aggravate. In fact, already in the years preceding the advent of Covid # 19, 88% of startups were experiencing difficulties, mostly related to lack of liquidity and the credit crunch. It is in this context that the pandemic has hit the national productive fabric. If we look closely, in fact, among the same VC investments in the first half of 2020 – a phase of acute economic-health emergency – the share destined to more ‘mature’ and ‘less risky’ startups was significantly higher than today.
Nonetheless, 1 startup out of 2 (51%) was able to parry the blow, without losing out, and highlighting a much more marked anti-fragility trait than the whole of Italian SMEs (+12 percentage points). A 15% have even been able to ride the disruption, transforming it into a profit opportunity. To face the situation, 1 in 2 innovative startups always decided to intervene on their business model, adapting it to the new normal, but only 12% had to make drastic and ‘revolutionary’ choices. In fact, startups have managed to cross the troubled waters of the crisis, distorting themselves much less than traditional SMEs have been called upon to do. Digital business models that are in step with the times have in many cases turned into a competitive advantage.
The impact of Covid # 19 has not affected the confidence in a positive future on the part of startups, which, in 82% at the end of 2020, expected a much brighter 2021. To engage the recovery, however, startups are calling for more support. It is not a question of revolutionizing one’s business model – whoever had to do it has already done so – but rather of being supported in the consolidation of the current model (64%). To do this, they are clamoring (36%) for greater ease of access to credit immediately, often hampered by excessive requests for guarantees and long and cumbersome procedures. In a logic of triggering virtuous dynamics in the medium-long term, however, the data collected suggest a clear demand for initiatives aimed at expanding and strengthening its business network, as well as strategic consulting services.
Within the ecosystem of post-pandemic startups, private prices as a privileged interlocutor and supporter of innovation seem to be on the rise. Not only, as we have seen, 2021 is marking an important participation of Corporates in VC rounds on a European scale, but the startuppers themselves consider large private companies to be much more reliable and qualified – compared to public bodies and trade associations – in terms of ” provision of services to startups: from digitization (70%) to technology transfer (68%), passing through networking (63%), consulting (54%) and access to credit (55%).
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