By Shannon Power, 27th October 2022
Italy has always been seen as a highly popular vacation spot due to its great weather and historical locations. However, when it comes to the Italian tech start-up scene, they have been seen as underwhelming compared to their northern European neighbours, but a change is emerging. The country is becoming more attractive to investors as there is more funding for venture capitals and the tech start-up ecosystem.
Government Funding for Italian Tech Start-Up Ecosystem
The Italian Government is taking big steps to scale up its start-up ecosystem and place it on the European stage. The environment is becoming more welcoming to start-ups, but it has not always been this way. Italy used to be known for their high taxes and it was not uncommon for Italian natives to venture out of the country to set up their companies in cities with more leeway and freedom.
The government has been focusing on breaking this cycle by being more aggressive with their funding for innovation and technology plus giving more power to strengthening research and tech transfer. New research published by Dealroom.co revealed that venture capital funding in Italy has hit €1.7 billion in 2022 so far and has projected a growth of 64% year on year. Funds such as the CDP Venture Capital, Italy’s National Innovation Fund, were granted €2.5 billion by the government at the start of 2022 has been crucial to the growth of the start-up ecosystem. The first national fund for technology transfer was launched in 2021 by the Italian Ministry of Economic Development. The fund puts €500 million towards investments related to creative and innovative technology.
Around 80% of Italian tech start-ups who receive funding spend the majority of it on research and development, testifying to the country’s desire to grow and innovate their start-up ecosystem.
Even though the Italian start-up ecosystem is at a rudimentary stage, this can be interpreted as a huge opportunity to utilise and take advantage of the many positive factors that the country has to offer:
- Access to technology
- Access to large amounts of talent
- Growing access to capital
- Low cost of production
One of Italy’s main concerns in the past has been finding the best way to exploit and assign value to the country’s endless number of resources.
Tech Start-Up Hubs in Italy
Numerous cities throughout Europe are known for their tech industries and successful ecosystems, making it understandable for a late bloomer such as Italy to get overlooked compared to them. However, even though areas such as Paris, London, and Barcelona are successful business hubs, Italian cities are beginning to expand their industries.
Milan is the most popular city in Italy for start-ups, with Rome being second and Turin coming third. Thanks to the government’s greater focus on expanding the Italian tech start-up industry with great investment funds for VCs, these Italian cities are starting to become leading business hubs of their own. Milan received a €4.5 billion investment to create a modern, green tech district to house research labs, a start-up accelerator, and more. Their aim is to foster collaborations and partnerships among the local tech scenes.
If you are interested in Registering a Company in Italy, the Euro Company Formation’s team would be more than happy to assist you! Get in contact today by calling us on + 353 (0) 1 6461627 or filling out our contact form here.