P101's Andrea Di Camillo on the evolution of Italy's venture ecosystem

Playback speed

Share post at current time

Share from 0:00

0:00

Transcript

P101's Andrea Di Camillo on the evolution of Italy's venture ecosystem

An insightful discussion on how Italy's venture ecosystem has transformed into a thriving hub of innovation and untapped opportunities. Don't miss Andreea's show notes below. ⏬

Sep 10, 2024

Transcript

In this episode of the EUVC podcast, Andreas discusses with Andrea Di Camillo, Founder, CEO & Managing Partner at P101.

P101 is one of the most well-known players in the Italian VC landscape and has established a strong position in early-stage investing. Currently, on its third fund, which raised €250M, P101 manages a total assets under management (AUM) of €400M.

Headquartered in Italy, the firm focuses primarily on Series A investments, with 70% of their portfolio in Italy and the remaining 30% spread across Europe and the United States. P101's investment strategy include a diverse range of sectors, like enterprise software, deep tech, health tech, fintech, energy, transportation, and food tech.

Notable Investments: 1000Farmacie, Casavo, Cortilia, CyberGuru, Deporvillage, FatMap, Habyt, Musixmatch, Musement, Tannico, Velasca

Watch it here or add it to your episodes on Apple or Spotify 🎧 chapters for easy navigation available on the Spotify/Apple episode.

Zero One Hundred Conferences organizes LP-GP networking events for PE & VC players in various European regions with a global outreach. In the last 8 years, they have hosted 50 events with 1700+ speakers, 6500+ investors, and 12000+ attendees.

The upcoming 0100 Conference Mediterranean presents a unique opportunity for private equity and venture capital LPs and GPs to meet and develop meaningful relationships.

Attendees will include major industry firms such as the European Investment Fund (EIF), Tikehau Capital, Vencap, Arcano Partners, Amundi-Alpha Associates, P101, United Ventures, Merseyside Pension Fund, and many more.

Learn more

✍️ Guest show notes:

We believe in giving you our guests' thinking directly and unaltered. Therefore, no changes, no AI, no nothing has been done to the following sections.

Deep Dive and Q&A on Italian venture growth

Italian VC Growth Overview: Given the substantial growth of the Italian VC ecosystem, with investments rising from 152.1 million euros in 2013 to 1.1 billion euros in 2023, what were the key factors driving this nearly sevenfold increase?
Increased Entrepreneurial Activity: Italy’s entrepreneurial spirit has taken off, with more tech startups emerging. Recent graduates and PhDs are increasingly seeing entrepreneurship as a viable career path, which is great for innovation.
Government Support and Policy Changes: Initiatives like tax incentives and the Smart&Start program have certainly helped create a more supportive environment for startups. But, there's still a need to streamline processes and reduce bureaucratic hurdles to make Italy even more attractive for VC investments.
Rise of Local VC Firms: Local players like P101 have stepped up, providing much-needed capital and expertise to early-stage companies, and playing a critical role in fostering growth.
Redirection of Private Wealth: More of Italy’s private wealth is being directed towards homegrown innovation. This is encouraging young Italians to consider starting companies locally, which is a positive shift.
Startup and Investor Flywheels: There’s a dynamic cycle at play. Successful entrepreneurs are reinvesting back into the ecosystem—what we call the "Startup Flywheel." On the other side, the "Investor Flywheel" is gaining momentum as experienced investors continue to deepen their involvement, creating a stronger network and attracting more capital.
Looking Ahead: While we’ve made significant progress, there’s still work to be done to catch up with leading European ecosystems. The next phase will bring more opportunities and competition, particularly from international investors who are increasingly seeing Italy's potential.

Sector shifts & trends

How has P101 adapted its investment strategy in response to the shift from pandemic-boom sectors like HealthTech and FinTech to emerging sectors like Space and Energy?
HealthTech and FinTech: During the pandemic, sectors like HealthTech and FinTech transformed industries—think mobile banking, digital health records, and AI-driven finance. But 2023 showed signs of a slowdown in FinTech funding, signaling a maturing market.
Emerging Sectors: The focus is now shifting to sectors like Space, Energy, and Transportation. Clean energy, electric vehicles, and advanced mobility technologies are gaining traction, and SpaceTech is starting to build a solid foundation.
Deeptech Focus: Our latest fund, P103, is very much aligned with these trends. We’re diving deep into areas like spacetech, novelAI, cybersecurity, semiconductors, and robotics, which match well with Italy’s push for sustainability and next-gen tech.
Enterprise Software: Enterprise Software remains a stronghold, reflecting ongoing demand for digital transformation and efficiency solutions. SaaS continues to be an attractive model for businesses.

Growth stage investment dynamics

Despite the overall growth, 2023 saw a reduction in Growth Stage rounds. How does P101 view this trend, and what strategies are being implemented to support companies at this crucial stage?
Market Correction Impact: The market reset in 2023 led to a reduction in investments across stages. In Italy, Early Stage (-17% YoY) and Growth Stage (-26% YoY) were less affected, but Late Stage took the hardest hit—falling from 52% of yearly deal value in 2022 to just 18% in 2023 with only two rounds.
Follow-On Investments: We’ve always set aside a significant portion of our funds (60-65%) for follow-on rounds to support our portfolio companies as they scale.
Partnership Building: Building strong co-investor relationships is crucial for us. It’s about bringing in additional growth capital and resources.
Operational Support: Our dedicated portfolio team works closely with companies to help them scale, enter new markets, and navigate growth challenges.
Growth Beyond Borders: Many of our companies are ready to expand internationally. We’re here to facilitate that, leveraging our global network and co-investment strategies.

International investor engagement

With a noted increase in foreign investment from Europe and North America, how does P101 foster relationships with these international players, and what role do they play in the current Italian VC market?
Strategic Partnerships: We actively build partnerships with international funds and institutional investors from Europe and the US, fostering co-investments and shared opportunities.
Bridge to Italian Startups: We see ourselves as a gateway for international investors looking to engage with the Italian startup ecosystem.
Participating in Global Events: Being present at global events and forums is part of our strategy to showcase our portfolio and build connections.
Shifting Investor Landscape: While Italian investors still dominate early-stage rounds (69% in 2023), there’s a growing presence of European and North American investors, especially at the Growth Stage and beyond. This trend is extending into earlier stages, which is promising for the ecosystem as it brings more capital, expertise, and networks to the table.

Challenges and opportunities in scaling

As Italian startups begin to mature and scale, what are the biggest challenges they face? How does P101 assist in overcoming these hurdles?
Market Size and Fragmentation: Italy’s domestic market can be limiting, making international expansion a necessity for many startups.
Talent Acquisition: Attracting top talent, particularly in tech-heavy sectors, remains a challenge, but we’re here to help bridge that gap.
Access to Later-Stage Capital: Later-stage funding isn’t as readily available, which can hinder scaling efforts.
How P101 Assists: We provide strategic guidance, connect companies with international partners, and support them in their cross-border expansion plans.
Proactive Transformation: We believe in driving change, not just reacting to it. We’re embracing new business models while staying committed to fostering growth in Italy's innovation ecosystem.

Future of Italian VC

Looking forward, what are the anticipated trends in the Italian VC market over the next decade, and how is P101 preparing to navigate these changes?
Continued Growth in Tech Adoption: Tech adoption is on the rise, and this trend is set to open up more opportunities for innovative startups.
Rise of Specialized Funds: We expect to see more niche-focused funds emerging in areas like AI, sustainability, deeptech, semiconductors, and robotics.
Institutional Investor Interest: With more institutional investors—both local and international—looking at Italy, the ecosystem is poised for more capital influx.
P101's Role: We’re committed to leading investments in these tech-driven sectors and strengthening our cross-border strategies and partnerships.

Role of technology and innovation

With advancements in AI and digital technologies, how is P101 leveraging these tools to enhance investment decisions and portfolio management?
Data Insight Division and Digitalization of Fund Operations: We’re investing heavily in digitalizing our operations and integrating advanced data practices into how we operate. We have a dedicate business unit called Data Insight which is fully dedicated to that. We’re expanding our team to include more engineers, developers, data scientists, and product managers.
AI and Data Analytics: We’re all about leveraging AI for smarter investment decisions. For example, we built a fully automated investment pipeline that can identify and analyze opportunities from various sources, structure unstructured data in our CRM, and score them against our investment thesis. This speeds up our screening process by over 50%, improves accuracy, and reduces biases.
Future of VC Talent: We see the future of VC firms having a strong engineering backbone, not just in operations but at the strategic and management levels too, and we’re positioning ourselves to lead in this direction.
Read more about how to embrace the VC data-driven transformation from Tommaso Condulmari, Data Analyst at P101 on EUVC Insights.

Biggest learnings in venture

Consciousness of time: The use of time and money together can be incredibly powerful and using time to allow you to capture more information along the way is powerful.
Focus is Key: You can’t be all things to all people. Staying focused on our investment thesis has helped us build a strong reputation and track record.
Adding Value Beyond Capital: Cash isn’t enough. Our approach is to provide real strategic support and be a growth partner for our founders.
Relationships are Everything: At the end of the day, VC is a people business. Strong relationships with founders, co-investors, and LPs make all the difference.

Tips & tricks for emerging VCs fundraising.

Build Long-term Relationships: Start engaging with potential LPs well in advance. Building trust takes time, and it's invaluable when it comes to securing commitments.
Know Your Audience: Every LP has different priorities. Tailoring your pitch to match their specific needs and interests can make a big difference.
Showcase Consistency and Focus: LPs want to see a clear track record and a focused investment strategy. Consistency builds confidence.

🤗 Join the EUVC Community

Looking for niche, high-quality experiences that prioritize depth over breadth? Consider joining our community focused on delivering content tailored to the experienced VC. Here’s what you can look forward to as a member:

Exclusive Access & Discounts: Priority access to masterclasses with leading GPs & LPs, available on a first-come, first-served basis.
On-Demand Content: A platform with sessions you can access anytime, anywhere complete with presentations, templates and other resources.
Interactive AMAs: Engage directly with top GPs and LPs in exclusive small group sessions — entirely free for community members.

Join the EUVC community