Updated: Mar 19, 2020
Despite the geopolitical uncertainty that pervades Europe, Venture Capital is proving to be a strong market in continuous expansion, given that investors are showing a significant interest for it.
This article aims at summarizing in an effective way all those trends, opportunities and challenges dealing with the Venture Capital market in Europe and Italy in these first months of 2019.
The first quarter of 2019 told us that:
The market is increasingly strong and diversified
Blockchain investments are growing
Digital banking is booming
Emerging markets offer more and more opportunities
At European level, 2019 sees a significant growth of the capital invested, reaching 6.5 billion in 487 deals. The same period of the previous year registered 5.1 billion instead.
The industry that stands out throughout all European countries is fintech. Fintech, or technofinance, is the word that describes the industry that holds all those businesses working on the digitalization of the banking and financial systems. Satispay, Conio and Credimi are just a few examples of Italian companies belonging to this sector. For example, the German digital bank N26 collected 300 billion dollars to support its international development.
Even smaller countries like Sweden can count on realities such as iZettle and Klarna, two unicorns that are becoming successful realities. The term unicorn, which made its debut in 2015, is used to identify those startups that reached a valuation that exceeds one billon. Besides fintech, the other industries in the sight of investors that needs to be observed and monitored are biotech and artificial intelligence (AI). The latter seems to be the most appealing since its applicability is nearly unlimited.
It is crucial to highlight that, as a consequence of the economic and political uncertainty mentioned at the beginning of the article, the deals related to those startups that are in their Post-seed or Growth phase are the ones that still attract most of the investors at a global level.
In particular, startups belonging to these phases offer investors an interesting return with a limited level of risk, if compared to earlier phases.
Italy, similarly to Belgium, Ireland, Norway and Austria has reached 0.1 billion euros with a total of 24 rounds.
Therefore, data shows how in Italy Venture Capital has a wide margin of growth and that investors can count on many opportunities.
In fact, through the new legislation on PIR (Individual Saving Plans), recently approved, the Government has demonstrated a clear interest on promoting and boosting the innovation of a country that distinguish itself for its creativity and passion. The aim is to align with the European big players, such as UK, Germany, France and Israel.
Innovazione Italia is perfectly aligned with the framework described and it presents itself as venture capital instrument supporting the development of the most innovative Italian businesses. In addition, it stands out for being an investment fund designed with a diversified portfolio of innovative startups, carefully selected with strict parameters.
KPMG Enterprise (2019). Venture Pulse Q1 2019, Global analysis of venture funding.
Blog | Dealroom. (2019). €4.9 billion invested in European venture capital rounds in Q1 2018. [online] Available at: https://blog.dealroom.co/european-venture-capital-rounds-q1-2018/ [Accessed 15 May 2019].
Dealroom (2019). Q1 2019 Report Final.
Startupitalia. (2019). Al via i nuovi PIR: il 3,5% dell’investimento andrà alle startup. [online] Available at: https://startupitalia.eu/108716-20190509-al-via-i-nuovi-pir-il-35-dellinvestimento-andra-alle-startup?fbclid=IwAR0CQGBFrqD2UM35NuwYDRZH5Nt2FcC-GoLr9JGigi7okMs0w95GmFQqXcY [Accessed 15 May 2019].