In the economic context of our country, the startup sector is experiencing a particular phase, stimulated by significant challenges. Investments last year slowed down heavily also due to the cooling of international venture capital initiatives, due in part to macro factors (interest rates, inflation, GDP and employment levels) and geopolitical factors (i.e. the complex of political problems that originate from territorial events) that are complicated and interdependent, which have led to a context of precariousness and prudence.
According to projections, pending the publication of the data for the whole of 2023 and starting from what was recorded at the end of the third quarter, which recorded investments in startups of 300 million euros and a total value for the year up to the end of September of 772 million euros , last year closed with a decidedly significant contraction. If in 2022 the total amount of investments in startups stood at about 1.9 billion euros, the best figure ever for Italy but still limited when compared to that of other European economies such as France, Germany and Spain , in 2023 it is projected not to exceed a value of between 1.1 and 1.2 billion euros, with a contraction of 700-800 million euros. To make this calculation, we started from the 772 million of the first three quarters of 2023 to which we added the result of the sum of the deals that closed and were announced between October and December 2023 from which we found a figure of about 320-330 million euros (you can find them listed in the funding news section of Startupbusiness ).
Stronger Businesses
Nevertheless, these critical issues do not herald the decline of the sector, but more concretely a phase of indispensable and healthy renewal. In particularly delicate moments, the market is oriented towards eliminating the less effective components or those that do not bring significant added value. In the world of our startups, this phenomenon is speeding up the disappearance of business ideas that are not very concrete, leaving room for more solid, innovative realities, firmly inserted in real innovation and the most advanced technology, especially in the B2B sector.
At the moment, the winner is the one who focuses on technological solutions and management processes to support competitive development, process automation, AI and big data, i.e. the collection of computer data so extensive in terms of volume, speed and variety that it requires specific technologies and analytical methods for the extraction of value or knowledge. On the other hand, the demographic crisis (our country has the lowest birth rate in Europe with a downward trend that has continued since 2008) and the scarce workforce (it is increasingly difficult for our companies to find manpower: in the last 12 months the share of untraceable workers on the total expected hires has risen from 40.5% to 48%), have led to the need for SMEs to look for different solutions to maintain productivity; And at this point, investment in technology becomes crucial for their survival.
Startups that offer cutting-edge technological solutions can take advantage of this opportunity to enhance their position in the market by providing companies with the devices to automate processes, improve efficiency and thus limit dependence on traditional workers. The combination of all these factors contributes to creating an ideal environment for the development of startups in the field of innovation in a market aware of the relevance of technological innovation. There is no doubt that, despite the current crisis, the exit from the market of insignificant companies, the focus on innovation and the most advanced technologies and the need for SMEs to resort to innovative technological solutions, will determine a more lively market in which innovative startups will have significant room for growth. (Photo by Markus Winkler on Unsplash)
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