The trend of investments in innovation in Italy is returning to pre-pandemic levels. The scenario photographed by the Observatory of the School of Management of the Milan Polytechnic therefore seems to be positive. Projects are accelerating for 63% of large companies, while the resources invested in hi-tech start-ups have reached €1.461 billion, +118% compared to 2020.
This last figure represents an epoch-making step for our ecosystem, which is finally breaking through the threshold representing €1 billion in annual investments, showing unprecedented growth (even greater than the leap made between 2017 and 2018). In this encouraging context, investments by formal players (independent VC funds, corporate CVC funds and GVC funds) confirm their traditional leading role for the entire ecosystem, recording 96% growth and rising from 294 million in 2020 to 576 million in 2021.
The watchword in 2020 was 'resilience', to cope with the emergency caused by the pandemic. The investment figures indicate a strong recovery of the ecosystem, thanks also to the almost immediate effect of the various measures implemented at institutional level, including the recent injection of a further EUR 2 billion into the National Innovation Fund, in addition to the EUR 1.3 billion already allocated in the past.
Recovery through hi-tech start-ups, with crowdfunding playing an increasingly important role
Of the 193 funding rounds registered in 2021, 115 (60%) are 'first rounds', the first investment ever for the startup. This is in line with last year's figure of 94 first rounds (55% of 2020 rounds). The average size of first round investments went from EUR 4.7m in 2020 to EUR 4m in 2021, a slight decrease. This year's strong growth is therefore explained more by the trend in investments raised in subsequent rounds: in 2021, these averaged €12 million per round, compared to €9 million in 2020.
Funding from formal players (i.e. independent Venture Capital funds, corporate Venture Capital funds and Governmental Venture Capital or Regional Finance) confirms its leading role for the whole ecosystem thanks to an important growth of about 96%, from €294 million in 2020 to €576 million in 2021. Alongside these, however, is funding from informal players (which include Venture Incubators, Family Offices, Club Deal, Angel Networks, Independent Business Angels, Equity Crowdfunding platforms and companies without a structured CVC fund), the second component that determines the overall value.
These forms of financing will also grow by more than 92%, from € 245 million in 2020 to € 449 million in 2021. This increase reflects the growth trend of the ecosystem and confirms the strong relevance of the informal sector for the Italian entrepreneurial fabric, playing a leading role alongside the formal sector in the recovery of the ecosystem. A very important fact for us - the Equity Crowdfunding segment continues to grow, rising from €101 million in final 2020 to €130 million in preliminary 2021 (+28%).
The start-up ecosystem in Italy: a positive balance?
This year's result shortens the distance separating us from the main European countries in terms of the volume of annual funding that supports our start-ups. However, it is necessary to start a virtuous circle that can generate a market capable of growing independently. The start-ups operating in the most developed European countries (France and Germany, for example) are supported by a public/private venture capital market that raises tens of billions a year. It is therefore crucial for us to reduce this gap, so as to prevent our most successful young companies from moving abroad in the later stages of growth.
The good news seems to be a healthy ecosystem that has shown it can adapt to the emergency context and make a virtue of necessity within a new normal. Let's hope that this trend bodes well and that the growth is reconfirmed, indeed consolidated, in 2022.