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2024 is off to a pretty good start for the Italian venture capital market, which is showing positive signs and growth compared to the figures for the last quarter of 2023. In fact, in the first quarter of 2024, €443 million was invested compared to €389 million in the fourth quarter of 2023, while investment rounds rose from 88 to 108, marking a new record in Italian VC. The number of exits is also growing, 12 in Q1-2024 compared to 8 in Q4-2023. Smart City is confirmed as the sector with the highest number of rounds, while Software is the one with the highest collection.
This is the scenario outlined by the Observatory on venture capital in Italy created by Growth Capital in collaboration with Italian Tech Alliance, which monitors on a quarterly basis the trend of venture capital investments in Italy and the main trends of the Italian innovation ecosystem.
Venture capital investments in Italy first quarter 2024, source Growth Capital and Italian Tech Alliance
The scenario
In Europe, €12 billion was raised in 2,404 rounds in Q1-2024, with the number of rounds in line with the all-time low of Q4-2023, while the amount invested was the lowest since Q2-2020. Contrary to what was recorded at the European level, venture capital investments in Italy started with a positive sign, with 443 million euros raised in 108 rounds. It should be noted that for the first time the number of rounds in the quarter exceeded 100 (in 38 cases, the deal and/or the amount were not disclosed). With €443 million raised, the first quarter of 2024 is the fifth quarter of continuous growth, with 55% of the invested attributable to the two mega rounds of Bending Spoons (€144 million) and MMI (€101 million).
Q1-2024 is therefore the best quarter ever, but it should be noted that most of the investment is concentrated in two mega rounds, still sporadic in the Italian landscape, making it more difficult to forecast the year. In terms of the number of rounds, there are a very high number of pre-seed rounds while the cautious approach of startups and investors from Series A rounds onwards has reduced the number of Series A and Series B rounds and made bridge rounds more frequent.
Looking at the segmentation of rounds by type, in the first quarter of 2024 pre-seeds and seeds accounted for 68% of the total rounds, mainly thanks to the investment activity of accelerators. It should also be noted that the C+ series rounds accounted for 57% of the total funding, while the Series A rounds raised €67 million in 13 rounds, in line with the 2023 trend, while the Series B raised €27 million in 2 rounds.
Breakdown by sector
Unlike in the past, Q1-2024 saw a fairly even distribution of rounds across sectors. Smart City is the sector with the highest number of rounds (14), followed by Software, Lifestyle, Life Sciences and Food & Agriculture, all with 13. Software On the other hand, it is the one that attracted the most investments (€154 million), followed by Life Sciences (€139 million) and Smart City (€39 million). Excluding mega rounds, smart city would be the first sector to amount. The AI vertical saw the most rounds, while app stood out for the capital raised, especially thanks to the Bending Spoons mega round.
Regarding the top 5 deals of Q1-2024, in the lead we find Bending Spoons (144 million, growth VC) and MMI (101 million, series C) followed by Everli (21 million, bridge) and Contents (16 million, series B). There is also the Casavo round (non-public amount).
Exits increased from 8 in Q4-2023 to 12 in the first quarter of 2024.
“In contrast to Europe, in the first quarter venture capital in Italy stands out for its encouraging data, recording the best quarter ever in terms of number of rounds and the fifth consecutive quarter of growth, although 55% of funding came from two mega rounds. These results confirm our prediction of the potential of the Italian ecosystem, which is preparing to face the challenges of 2024 with confidence, thanks also to the confirmation of the key role of CDP Venture Capital, whose recently announced investment plans for the next five years will support the growth and development of the national VC ecosystem”, comments Fabio Mondini de Focatiis in a note, founding partner of Growth Capital.
“The second quarter of 2024 has the potential to be one of the most important in the history of innovation in our country – says Francesco Cerruti, general manager of Italian Tech Alliance -. It opened with the presentation of CDP Venture Capital’s business plan to 2028 and we hope it will close with the presentation of the long-awaited Startup Act 2.0 by the Government. In the meantime, we are pleased to note that the market has recovered after the difficult 2023 and that the numbers for the first three months of the year tell of a relaunch that can only be strengthened in the near future, also thanks to the regulatory interventions that we have been proposing for some time”.
The full report, which for this quarter is also completed with an in-depth analysis of the VC market in Spain, and the research methodology are available at this link.
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