P101 presents "State of Italian VC" a report on the evolution of Italian Venture Capital
by P101
P101, a leading player in Italian Venture Capital with an international focus, has analyzed the evolution of the sector in which it has been operating for over ten years, identifying specific trends and comparing them with European counterparts.
The study, "State of Italian VC", highlights that the growth of Italian Venture Capital (VC) has been ongoing for over a decade, following a steady trajectory that has transformed the sector into an industry capable of contributing to the country’s innovation ecosystem development.
The Italian innovation ecosystem currently includes over 14,000 innovative enterprises: 84% of these are startups (12,054), along with approximately 2,000 innovative SMEs. In 2024, these 14,000 companies generated a total production value of €8.6 billion, with startups contributing €2.4 billion (28%), and employing more than 60,000 people, one-third of whom work in startups (20,000).
"Over the past ten years, Italian Venture Capital has evolved into a fully-fledged industry: we have gone from around 30 to 150 VC operators, increased our investment capacity tenfold, and contributed to the development of innovative businesses that have received almost €9 billion in investments. At the same time, funds have become an attractive asset class.
"However, there is still a lot that needs to be done to bridge the gap with other European countries. Per capita investments rank among the lowest in Europe, leading to clear consequences: fewer companies, undersized operators, fewer success stories, greater difficulties in expanding internationally, and longer entrepreneurial renewal cycles. The market needs to become more dynamic, and VC must continue to grow with the support of patient capital, as innovation requires a long-term horizon.
These funds are also beginning to come from abroad, from investors aware that this is the right moment to invest in European innovation and that Italy represents an opportunity, given that its VC ecosystem now has solid foundations and has entered a new and important development phase. But it is not just a matter of capital.
The spread of a culture that values innovation and entrepreneurship in Italy can unlock financial resources and fuel a virtuous cycle essential to preventing the country from lagging behind in this era of great change."
commented Andrea Di Camillo, Founder and Managing Partner of P101.
Investment Trends in Italy and Europe
Over the past ten years, Italian VC has invested a total of approximately €8.6 billion in startups (+467% from €194.3 million in 2015), with around €7 billion invested in the past five years alone.
Between 2020 and 2024, Italy gained ground, ranking tenth in Europe for investments. It surpassed Austria (€6 billion) and Portugal (€5 billion) but remains far behind Spain (€13.1 billion) and the three countries that continue to dominate the market: the United Kingdom (€114.2 billion), France (€50.6 billion), and Germany (€48.8 billion).
In 2024, European investments came close to EUR 60 billion through 13,451 deals (-22%), with Italy investing EUR 1.1 billion (-9.5% on 23) through 628 deals (-28%) made by a growing number of VC operators, which rose from around 30 to 150 over the decade. The median capital invested in Italian start-ups reached EUR 540,000, more than doubled from EUR 250,000 in 2023 and quintupled from EUR 110,000 in 2015. However, Italy remains well below Spain (€1.0 million), France (€2.19 million) and Germany (€3.22 million).
Despite being Europe's fourth-largest economy, venture capital investment in Italy remains disproportionately low: per capita investment in 2024 amounts to €114, a figure that slips Italy to 24th place, fourth last among countries in the European Union.
In 2024, the Italian market remained concentrated on pre-seed operations. Italy continues to be the country with the highest number of these rounds (56% of the total), which, however, attracted only 5% of the total capital.
On the other hand, Late Stage deals accounted for only 16% of the number of deals, but absorbed 69% of the EUR 1.1bn invested (up from 25% in 2015). Spain showed a similar pattern, in contrast, France and Germany showed a more balanced allocation as did Europe as a whole.
Sectors
2024 marked a strategic shift, with a substantial reallocation of capital towards sustainability, automation, and aerospace, departing from the previously dominant digital economy. In recent years, VC investments in Italy were focused on FinTech, E-Commerce, and SaaS—which attracted €1.77 billion, €1.46 billion, and €1.46 billion, respectively, over five years. However, in 2024, Italy accelerated its deeptech investments, reaching €693 million (+14% vs. 2023 and 7.5 times the €84 million invested in 2015), positioning itself as a potential hub for frontier technologies.
CleanTech led the sector and with €306 million (+71% vs. 2023 and +1,327% since 2020) is the most financed sector in Italy, followed by Space Technology (€161 million, +233% vs. 2023 and +1,508% since 2020) and Robotics & Drones (€161 million, +443% vs. 2023 and +1,230% since 2020). These three segments demonstrated exponential five-year growth, confirming the evolving investment trends.
Italy's Artificial Intelligence and Machine Learning (AI and ML) sector, ranked first in France (EUR 2.97 billion, +66%) and Germany (EUR 1.77 billion, +19% year-on-year), is sixth in Italy (EUR 155 million from EUR 193 million in 2023), while Cybersecurity has almost tripled its funding to EUR 52 million, reflecting the growing concern for digital security.
Milan: The FinTech Capital, Rome: The AI Hub
From 2020 to 2024, the North-West dominated the Italian VC landscape, attracting €5.3 billion (76% of total capital) across 1,900 deals, with Milan receiving €4.1 billion, continuing to lead in FinTech investments.
The North-East secured EUR 459 million, mainly invested in SaaS, Life Sciences and CleanTech, with Bologna as the main hub (EUR 89 million). Central Italy secured €796 million, driven by Rome (€295 million), particularly active in AI, EdTech, and Robotics, and Pisa (€201 million). The South recorded €304 million in investments, led by Naples (€95 million), showing promising growth in Digital Health and SaaS.
Exits
In 2024, the 27 VC exits were dominated by acquisitions and buyouts while IPOs fell to zero from 3 in 2023. The European IPO market is much more dynamic: in 2024, Europe recorded 235 total IPOs (22 in Italy), of which 18 were VC-backed (7.7%).
VC-backed companies contributed the least to the IPO market in Italy, with a total of only 24 listings in ten years, while over the decade, Europe saw 616 VC-backed IPOs, 25 times more than Italy.
Acquisitions remain the main route for Italian exits, stabilising between 20 and 26 deals per year since 2015, although the 21 in 2024 remain below Spain (31), France (108) and Germany (93). Private equity is showing more interest in Italian startups, but the market remains small compared to the main European countries. Overall, the Italian exit market is developing, but remains illiquid and dynamic, with a significant lag in IPOs and an absolute number of deals still limited.
Funding
In 2024, more than EUR 20 billion was raised in Europe through 228 funds, 17 of which exceeded EUR 500 million in capital raised, while two closed above the EUR 1 billion mark. Of these 228 funds, only 15 are Italian: none of them exceeded EUR 250 million, and Italian fundraising in 2024 closed at EUR 837 million, showing, however, a much smaller drop (-28% on 23) than in Spain (-63%), France (-45%) and Germany (-64%), confirming the resilience of the Italian ecosystem and its growing role in European VC.
In ten years, EUR 7.4 billion have been raised through 119 funds in Italy, 5 of which in the last 5 years. Although Italy has doubled its fundraising capacity in ten years, it still represents a small fraction of the European total: between 2020 and 2024, European funds raised EUR 164.5 billion, driven by three countries, the United Kingdom (EUR 47.4 billion), Germany (EUR 18.9 billion) and France (EUR 15.3 billion).
Increasing the size of funds, ideally driven by institutional investors, will be crucial to strengthen Italy's capacity to invest in innovation and keep up with European countries that dominate the sector.
Investors
There is a growing presence of foreign investors in Italy, which in 2024 came to represent 45% of the 498 investors in startups, up sharply from 29% in 2020, driven mainly by European players, while the participation of North American operators has remained relatively stable over time at 10-12%, as has that of investors from Asia and the rest of the world, which represent less than 6%.
A snapshot of VC (‘Limited Partner’ or ‘LP’) fund investors reveals some Italian peculiarities: they are 68.5% national, a figure that compares, for example, with Germany's 43.8%, and are predominantly banking institutions (20.3%), while the participation of insurance companies is low: in Italy they account for only 3.5% of fund commitments, compared, for example, to France's 15.9%. The latter also sees a high involvement of high-net-worth individuals (7.9%) who in Italy contribute only 2.8% to commitments.
This snapshot highlights the need for the country's VC to accelerate the diversification of its investors, an essential element in increasing the size of funds and the capacity to invest in innovation.
The full report "State of Italian VC" is available here.
If you want to learn more about the evolution of the Italian venture ecosystem, watch our conversation with Andrea on EUVC.
