CDP Venture Capital has presented its new business plan. Five-year plan 2024-2028 and this is already a first piece of news that denotes that it is a long-term approach, disconnected from the timing of the legislature and therefore of politics, a first sign of how the top management represented by President Anna Lambiase and CEO and General Manager Agostino Scornajenchi, intend to make the investment vehicle to support Italian innovation a market-oriented and results-oriented tool.
Let’s start with the numbers: we are talking about a target of a total of eight billion euros of resources managed, money that comes from CDP, from other public sources and also from third parties, the goal is that about one billion euros will come from this last source. So far , around €1.3 billion has been raised from CDP, €2.5 billion from other public sources and €400 million from third parties, and the CEO stressed that it is his primary intention to accelerate the involvement of investors who still marginally consider the venture capital asset class, such as pension funds. insurance companies, pension funds.
This money will be used to support the ecosystem infrastructure and thus support the seed and pre-seed investment phases for a total of about one billion euros, 2 billion are the billions that come to replenish the coffers of funds for direct investments that in the new business plan will be concentrated on what CDP VC considers the strategic sectors for the country: Health and Life Science, Agrifoodtech, Spacetech, Cleantech, Industrytech, Infratech and Mobility, to which is added, in a transversal way, that which includes artificial intelligence and cybersecurity. One billion euros are dedicated to the development of Italian artificial intelligence, of which 120 million for technology transfer, 580 million for investment in startups that fall within the scope and 300 million to support what will be the most innovative and promising companies in the AI field born in Italy. Then there are indirect investments, i.e. investments that support the development of private VC operators in Italy, both existing and new, here the total figure is three billion euros, of which 700 million are already active and 2.2 billion euros are new for the period of the business plan.
“Venture capital is fundamental for the future of the country – says Scornajenchi presenting the new business plan – Italy is lagging behind other economies similar to ours and we have the task of catching up on this delay, we have the opportunity to learn from what others have done but we must accelerate”.
“We must support the development of the companies of the future capable of competing globally, we must do so by strengthening the ecosystem in all its investment phases and involving all the players of both a financial and industrial nature, the goal is to reduce the gap we have with other countries, today VC in Italy accounts for 0.1% of GDP, in Europe it is 0.3%, in France 0.5%, in the USA 1.5% – says Anna Lambiase -. We must also attract international investors by making sure that our country is increasingly reliable and increase the average value of VC funds, which today in Italy is equal to 70 million euros while in France and Germany this average is 140 million euros and above all we must always remember that VC is not only capital but also expertise, network, connections. In addition, sustainability is equally fundamental, the startups in which we have invested and those in which we will invest are natively ESG compliant”.
“We are focusing on three points: promoting the development of innovation, encouraging the adoption of innovation and supporting the innovation ecosystem starting from research and ending with venture capital,” adds Dario Scannapieco, CEO of CDP, “in addition to the creation of synergies between all the investee companies, our ability to show the world the value of Italian innovation, knowing that increasing the percentage of VC on GDP also means having a leverage effect on GDP growth, as demonstrated by the experience of other countries”. Scannapieco also highlights the inclusivity factor, pointing out that in startups female CEOs are 12% compared to 3% in corporates and that currently the Italian innovation potential is not yet fully exploited and therefore it is necessary to work on channeling private investments, international investments and considering this new business plan of CDP VC as an important opportunity for the future of the country.
“Italy’s historic ability to do business is a value to be leveraged,” continues the CEO of CDP VC, “and today this ability is even more important at a time when the world is no longer globalized and the ability to know how to do things is more important than the ability to buy things, and we have learned this with the pandemic. with masks, with vaccines and also with geopolitical upheavals and their reverberations on raw materials starting with gas. Therefore, we must continue to invest in know-how, and we must do so from a strategic and long-term perspective. In 1953 the USA made the Small Business Investment Act, in 1982 it made the Small Business Innovation and Development Act with the result that today an important slice of their companies, including those that dominate the global ranking of the most capitalized companies, were born thanks to the work of venture capital. Venture capital is an infrastructure that allows public and private capital to be moved towards the real economy and with the birth of CDP VC in 2020 we have started to do so: we aim to have over 10 thousand people employed in startups by the end of the year, although we cannot yet communicate reports because the investment period of our funds is still in progress, we can already boast some exits such as that of Unobravo”. Exit that was announced in December 2023 , but without the figure being communicated, and here Scornajenchi points out that although the figure cannot be communicated, it is still a value “much higher than the initial target of 3X”.
“To attract private capital we have to show that the VC asset class is interesting, we have to tell about our success stories such as those of D-Orbit, Energy Dome, Innovheart, Finapp, Isaac, Wsense, all investments in companies that have growing valuations and we have to make our activity very clear, our investment proposition which is to support the development of new companies and not to make bailouts thus facilitating both the arrival of new companies and the development of new companies. private capital but also the creation of businesses combining entrepreneurship and academia. CDP VC is not a state investor, because otherwise the startups would go elsewhere, but we are a tool that focuses on strategic sectors, that makes in-depth selection of investments, that catalyzes resources, that supports the ecosystem and that aims to accelerate the maturation process of the VC market in Italy”.
The plan is to increase the amount of annual investments to €5.5 billion in 2028 with a share of €1.5 billion in 2024, €2.1 billion in 2025, €2.9 billion in 2026 and €4 billion in 2027. “In 2028, the share of VCs in the total that will be owned by CDP VC must not exceed 15-20% And although we start from a 2023 figure that recorded a contraction compared to 2022, a decline that affected all international markets, we are also aware that in the fourth quarter of 2023 the growth was significant compared to the same quarter of the previous year, the number of deals did not change, what was missing is the value of large rounds which in 2023 were less than in 2022, And in general, our goal is to move more and more towards indirect investments.”
Alessandro Scortecci, head of strategy & business development at CDP Venture Capital, delves into the various items of fund allocation, underlining how those allocated to the ecosystem concern technology transfer, corporate venture building and the network of accelerators and hubs that already has 25 nodes, such as the direct ones will be used for the seven sectors identified as strategic but also to support the companies in which investments have already been made, including those that do not fall within the seven sectors as CDP VC obviously intends to keep the commitments made, how those of the artificial intelligence fund are distributed both on technology transfer and on startups and scaleups and how the indirect ones go in the direction of strengthening the VC market in Italy.
“The operation of the new business plan starts immediately – underlines Scornajenchi – we will also review our operating model to make it more effective also in light of the fact that both the number of funds managed and the number of startups in which investments are made are destined to grow, some existing funds will come to an end, others will merge, there will be a more efficient governance that makes use of digital tools and is attentive to ESG aspects, in addition to sustainability also inclusion, CDP VC is already made up of half women and half men and also the ethical aspects of AI, if in the US it is used mainly for economic and financial reasons and if in China the tendency is to use it for reasons related to control, here it must be used for social purposes, to improve the lives of citizens, of businesses, of the Public Administration, and to make the system grow”.
The CEO also closes by focusing on the theme of internationalization, which will also be developed by leveraging the state structures already present abroad and the desire to dialogue with the top management of large Italian corporations to underline how VC is a fundamental lever to support the future of the country. Here the CEO also said that as far as the international fund of funds is concerned, (which to date has brought at least the first funds to Italy, including Partech from France, which has already made its first investment in an Italian startup , ed.) it will also work with other funds and not all of them necessarily European.
A question remains: if the goal of the industrial plan is to bring VC to 0.3 of GDP, the figure that today is the average European one, by 2028, it is to be assumed, however, that the other countries in the meantime grow and therefore the gap would still remain and to this Scornajenchi replies: “this is very true and we are aware of it, but what we have to do is get busy otherwise we will never make up the gap, we are about 15 years behind France, we have to reduce this difference in the meantime, then in five years we will see where we are but in the meantime what is fundamental is to accelerate”.
Associations’ comments
“We note with satisfaction that the strategic plan presented today by the CEO of CDP Venture Capital, Agostino Scornajenchi, takes into account some of the suggestions that were made by our association during the drafting phase. Particularly noteworthy are the expression of the desire to invest increasingly indirectly, with the hope that this method will become increasingly central in the implementation of the plan, and the focus on specific verticals, which can contribute to the economic and social revival of the country – says Francesco Cerruti, general manager of Italian Tech Alliance –. As far as the funding phase is concerned, we hope that CDP Venture Capital will be able to facilitate the work of attracting investments that many operators are carrying out with institutional entities such as social security funds and insurance funds that until now have been shy in trusting the real economy of the country’s system. The work carried out so far by CDP Venture Capital has been very important for the development of VC in Italy, and will certainly be so in the years to come. The organic restart of its operations is a fundamental step in the growth path of the innovation ecosystem, and we are working to ensure that it can soon be accompanied by the long-awaited launch of the Startup Act 2.0 by the Government”.
“We welcome the approval of the business plan presented today in Milan, which fully re-establishes the operations of CDP Venture Capital as a key player in the development of the innovation ecosystem. It is with satisfaction that we see some of the indications shared by our association in the dialogue phase with stakeholders accepted in the plan, especially with regard to the focus of resources in the pre-seed and seed phases, which have always been vulnus of the ecosystem and crucial for the growth of the Italian innovation supply chain – says Cristina Angelillo, president of InnovUp in a note -. We look forward to learning more about how the strategy will be implemented in the management of the accelerator network, both central players in the supply chain. In addition, we hope that concrete actions, currently absent in the plan, will soon be developed to involve more international investors in our country, which continues to have a limited ability to attract foreign capital. Ultimately, CDP Venture Capital’s new plan confirms its centrality for the entire innovation ecosystem, but we believe that, in order to be fully effective, it must be accompanied by a renewed vision of the sector, such as the one we expect from the launch of the long-awaited Startup Act 2.0. We therefore reiterate our support for CDP Venture Capital and the Ministry of Enterprise and Made in Italy and we make ourselves available to continue the excellent work done so far”.
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