Italian Founders Fund (IFF): Empowering Italian Startups
Despite growing funding for Italian startups, the country still lags behind in VC investment within Europe. However, the newly established Italian Founders Fund (IFF) aims to bridge this gap by investing €50 million into 25 companies. IFF positions itself as a sector-agnostic, founder-friendly fund that comprehends the challenges faced by entrepreneurs.
Addressing the Gap in Early Stage Capital
IFF’s portfolio already includes four companies, with a fifth deal underway. Notably, IFF led a funding round for HR tech startup Jet HR and invested in customer research platform Glaut. Lorenzo Franzi, founding partner of IFF, acknowledges that while there are existing VC firms in Italy, there remains a gap in early stage capital. Furthermore, despite having a similar population size to France, Italian startups receive considerably less funding. IFF aims to become a new source of capital for the Italian market.
A Step Up from Angel Investing
IFF serves as a complement to accelerators like H-FARM and offers an alternative to angel investing. Franzi, a former CEO at laundry startup Laundrapp and partner at Global Founders Capital, highlights the limitations of angel investing, such as limited analysis, complex cap tables, and undersized funding rounds. IFF brings a structured approach to its investment process and provides hands-on support to portfolio companies post-investment. The fund assists with key hires, commercial expansion, and strategic partnerships.
Backed by Successful Italian Founders
One of IFF’s strengths lies in its network of backers, which includes around 100 successful Italian entrepreneurs. These backers come from various generations and sectors but share a common goal: to establish Italy as one of Europe’s top destinations for opening a company. Their expertise and support add value to IFF’s portfolio companies.
Geographical Flexibility and Global Connections
IFF has the freedom to invest wherever it sees potential, including backing Italian founders operating abroad and foreign startups entering the Italian market. The fund aims to attract foreign VC funds to co-invest in its portfolio and plans to support Italian founders with global ambitions. This two-way flow of foreign connections strengthens Italy’s startup ecosystem.
Founder-Led Fund: A Sign of Maturing Ecosystem
IFF will be managed by KOINOS Capital, a private equity fund expanding into VC. Marco Morgese, CEO of KOINOS Capital, highlights that founder-led funds have been successful in other markets, such as Founders Fund in the U.S. and Galion.exe in France. The adoption of this model by IFF signifies the maturation of Italy’s startup ecosystem. While the venture capital landscape in Italy is improving, there is still a need to challenge the status quo and prioritize processes, speed, and an entrepreneur-focused mindset.
In conclusion, IFF’s establishment marks a significant step towards bolstering Italy’s startup scene. By providing early stage capital and valuable support to founders, IFF aims to accelerate the growth of Italian startups and elevate the country’s position in the European startup landscape.