A fertile humus of ideas – 6,000 active start-ups – and incubators – over 100 – with a venture capital value of just 170 million euros. This is Italy, a land of saints, poets and sailors who, however, as in ancient times, often need to leave in order to find funding. Fortunately, something is changing, and the rise of platforms that tickle innovation is a sign of this change. Such platforms are promoted by players who have traditionally been outside the start-up scenario: big corporations. It’s the case of growITup, wanted by Microsoft and launched in July 2016. We talked to one of its partners, Enrico Noseda.
It is a platform where corporations and start-ups can meet, in which a big corporate firm believed in the first place. Microsoft invested in the platform and then the platform found capital, but this is another story. The disruptive power of this initiative lies in the choice of a big corporation to become actively involved in start-up innovation.
Would you tell us what happens in this platform, that was founded more than one year ago?
In brief, a corporation can sponsor and finance a new innovative company. The process starts with the corporate telling us what innovation it needs, then we start with the scouting phase, both through direct calls on the market and by talking with Italian accelerators and incubators.
Would you make an example?
With Generali, we had the briefing phase in late July to look for start-ups in the healthcare industry. We started by contacting the accelerators we work with to see if there were any interested parties among them. We are interested in post-seed start-ups, we do not want ideas, but an established company that we can “pair” with a corporate one.
So now we have found the right start-ups for a corporation. What next?
We do an accurate screening with our solution partners, including Microsoft and HPE, which support us on technology issues, Accenture’s business model consulting, Avanade, Microsoft’s and Accenture’s joint venture that deals with integration issues. Among our partners are also Polimi and Luiss business schools. Once we identify the start-ups that meet the needs of corporate innovation, we organize a selection day with about 10 significant companies that pitch to the corporation and other corporate partners, including Enel, Intesa, Terna, Barilla, Peroni, Luxottica, Alpitour. We like to introduce the theme of open innovation whenever it’s possible. And the dialogue between different corporations, as well as with start-ups, often gives life to interesting exchanges.
What’s in it for corporates and start-ups?
Two, three, maximum four start-ups get to the final selection and make arrangements with the corporation. A phase starts when the two subjects contaminate each other and are supported by us and our solution partners. This course can change according to each one’s needs: the start-up can become a trading partner, or the collaboration can end in a tech acquisition. There is no pre-established road: the goal is reached when the corporate company has met its innovation needs and the start-up has taken a step towards growth.
Last July you also launched a 100 million fund in support of growITup. Why?
That’s our last mile: after scouting, selecting, counselling, why not invest in the “successful” start-ups? So we opened a 100 million fund that is focused on technology.
We’ve started by debunking VC numbers in Italy – all of them were good except for the value of funding. In France, VC is worth 1.8 billion Euros, 2.6 billion in Germany and 4.3 billion in the UK. Not to mention the 7 billion of New York and the 27 billion of San Francisco. What country should we compare ourselves to, in Italy, to understand how far we can get?
The value of the Italian VC is 170 million Euros and the goal is to reach at least one billion in 2020. “Our” 100 million are headed in this direction. We should at least close the gap with Spain, whose VC is about 500 million – and there is no reason in the world for not getting there. And then, we should start approaching the size of the main European countries you mentioned. Besides, Italian VC is made by local capitalists, but this is not the case in other countries: in Europe the average of indigenous VC is less than 50%. Which tells us that we must get better at attracting foreign capital. Moreover, I recently had a look at the numbers of the Italian Investment Fund that show start-up migration flows, and Italy was the only country with negative flows. But if start-uppers go away, it means that they were here in the first place, that they exist. Ultimately, the big picture is a positive one: the Italian VC may be a very immature market, but one that shows strong signs of growth. And it shows a positive tension too: events that stimulate the meeting between investors and start-ups are a proof of this – such as the Tech Tour, that was recently held in Rome, or the Italian Investment Showcase. Ultimately, we are all working together to keep start-uppers from leaving Italy.