Italian Venture Capital is Growing and Strengthening: is there a European opportunity?
by P101
Guest post by P101.
The Italian Venture Capital market is undergoing a period of rapid evolution, gaining an increasingly relevant position in the European landscape. According to the State of Italian VC 2024 report by P101 SGR, coming on February 25, the sector has made significant progress over the past decade.
EUVC has had exclusive access to key data from the report. Here’s why Italy is becoming an increasingly attractive destination for international capital.
A Growing Industry, A Stronger Ecosystem
Ten years ago, Italian VC market was still underdeveloped, with limited investments and few active players. Today, the situation is evolving impressively:
In 2024, Italian startups raised €1.1 billion through 628 deals, with a total of €8.6 billion invested over the last decade (+467% compared to 2015).
In the same period, VC players has expanded from fewer than 30 to over 300.
Italy moved up European rankings during the past five years, surpassing Austria and Portugal, with a total of €6.9 billion invested in innovative companies.
Numbers are still little compared to other countries such as France and Germany, but in Italy there is still room for improvement. Looking at VC investment per capita, Italy ranks 24th in Europe, with 114 euros per inhabitant, despite the national GDP being the 4th in Europe. This highlights the untapped potential of Italy’s venture ecosystem.
Strategic Shift: Deeptech and Sustainability Take the Lead
Until a few years ago, Italian VC was dominated by Fintech, E-Commerce, and SaaS.. However, in 2024, a shift occurred in capital allocation, directing investments towards innovative sectors such as sustainability, automation, and aerospace:
Deeptech attracted €693 million in 2024 (+14% compared to 2023), growing 7.5 times since 2015.
CleanTech was the most funded sector with €306 million (+71% year-over-year, +1,327% since 2020).
Space Technology and Robotics & Drones saw year-over-year growth of +233% and +443%, respectively.
This further strengthens Italy's emerging role as a hub for frontier technologies.
Increasing Interest from International Investors
The growing international involvement in the Italian VC market is a key driver of ecosystem growth:
The share of foreign investors grew from 29% in 2020 to 45% in 2024, mainly due to European investors whose interest in Italy has constantly increased
European and North American investors are becoming more active in later-stage rounds, contributing to the scaling of high-potential startups.
VC Fundraising: Strong Momentum for New Funds
In 2024, Italian VC fundraising reached €837m, maintaining levels above pre-2020 amounts despite a 30% dip from 2023. This reflects a resilient Italian VC ecosystem that, although adjusting to global trends, continues to show long-term growth potential. Over the past decade, Italy has increased its number of VC funds but is still constrained by smaller sizes, unlike Europe, where many funds exceed €250m. Scaling fund sizes is crucial for strengthening late-stage investments.
The Challenges Ahead
In 2024 the number of exits registered are in line with the 2020-2024 period, mainly driven by corporate acquisitions and buyout. Nevertheless, Italian startups are still reluctant to access to public listing in contrast with European trends, where IPOs represent a significant proportion of exit strategy.
Once again, timing is the issue: Italy is still facing challenges in attracting more institutional investors, but Government is now ready to help out. Back in December 2024, a new law encouraging institutional investment in VC funds was approved, expanding tax incentives and benefits for deeptech investments.
A Market in Transformation
Italy is proving its potential to become a key player in the European Venture Capital landscape. The market is expanding, international investors are increasingly engaged, and emerging sectors like Deeptech are attracting substantial capital. However, to reach the levels of France and Germany, it will be crucial to increase fund sizes, support startups through later stages, and develop a more dynamic exit market.
For a deeper dive into data and trends, the "State of Italian VC" report will be available from February 25 on P101 website.
Book your copy and discover the future of innovation in Italy!
