Italian Founders Fund Targets Global Success with €50 Million for Startups
With €50 million to invest, the newly created Italian Founders Fund (IFF) is looking for entrepreneurs with global ambitions. Although funding for Italian startups has been growing, the country still ranks eighth in Europe by venture capital (VC) investment, according to Dealroom.
Aiming to Catch Up
IFF hopes to bridge the gap in VC investment both in quantity and quality. With €50 million earmarked for 25 companies, the fund positions itself as sector-agnostic and founder-friendly, understanding the unique pain points of entrepreneurs.
Early Investments
IFF’s portfolio already includes four companies, with a fifth deal in the works. Two have been disclosed so far: customer research platform Glaut and HR tech startup Jet HR. “IFF is addressing the challenge for early-stage founders in Italy to find a high conviction lead investor at the pre-seed and seed stages,” said Lorenzo Franzi, IFF founding partner.
Filling the Gap
Some may argue that Italy already has several VC firms, including CDP Venture Capital, Exor Ventures, LVenture Group, and others. However, Franzi believes there is still a gap for early-stage capital. IFF presents a new source of capital for a market where startups receive far less funding compared to their counterparts in France, despite similar population sizes.
A Complement to Accelerators
IFF complements existing accelerators such as H-FARM and steps up from angel investing. Franzi, a former CEO at laundry startup Laundrapp, said that angel investing’s “unstructured” approach can lead to issues like limited analysis and undersized funding rounds. IFF brings the structure of a fund to its investment process and remains hands-on after investing.
Hands-On Approach
IFF assists portfolio companies with key hires, commercial expansion, and strategic partnerships, Franzi explained. Jet HR CEO Marco Ogliengo highlighted IFF’s value-add, noting that it is “backed by basically every successful Italian founder.” While this may be an exaggeration, Franzi mentioned that around 100 of IFF’s backers are Italian entrepreneurs, spanning various generations and sectors.
Global Vision
IFF aims to put Italy on the map of the best spots in Europe to open a company, despite some challenges being beyond its control, like high taxes and paperwork. Unlike CDP Capital, backed by state agencies, IFF is entirely privately funded. This flexibility allows it to invest wherever it sees fit, including backing Italian founders operating abroad and foreign startups interested in the Italian market.
Attracting Foreign Investment
IFF aims to attract foreign VC funds to co-invest in its portfolio. Some of its Limited Partners (LPs) are General Partners (GPs) of foreign funds, and it plans to support Italian founders with global ambitions. Global Italian startups like Bending Spoons, owner of popular apps such as Evernote and Meetup, exemplify this vision.
Founder-Led Model
IFF is managed by KOINOS Capital, a private equity fund expanding into VC. CEO Marco Morgese noted the rise of founder-led funds in other markets like Founders Fund in the U.S. and Galion.exe in France. Seeing IFF adopt this model in Italy signals the maturing of the ecosystem.
“In Italy, challenging the status quo on processes, speed, and an entrepreneur-focused mindset is essential.”
Lorenzo Franzi
With the launch of the Italian Founders Fund and its €50 million investment, Italy’s digital ecosystem is poised for growth, driven by the ambitions and talents of its entrepreneurs.
