Federico Wengi (SquareOne): Italy offers a few exciting opportunities but has also one of the smallest tech ecosystems in Europe.
A very interesting interview with Federico Wengi, Partner at SquareOne, a Berlin-based venture capital firm, from EU-Startups tell us something more about the health status of Italian startup's ecosystem. And the news isn't good.
"SquareOne invests in B2B technology teams that solve complex problems in huge markets in Europe - says Wengi -. As an early-stage investor, we focus on pre-seed and seed rounds with a ticket size between €350K and €3.5 million".
"While we’re open to investing anywhere across Europe, we pay special attention to the so-called Tier 2 and Tier 3 hubs that other investors often may overlook - continue Wengi -. To give you a few examples: We’ve made investments in smaller, non-tech-hub cities in Germany like Dresden (Wandelbots), Bochum (Edgeless Systems), or Giessen (Hygraph), and also invested in teams in Poland (VueStorefront), the Czech Republic (Codasip), or Italy (Glassfy)".
And about Italian startup ecosystem, Wengi tells to EU-Startups: "Italy right now offers a few exciting opportunities. With only around 60 Million inhabitants, it is the third-largest EU economy but also one of the smallest tech ecosystems in Europe. So there is a lot of untapped potential. Italy has top IT talent at low prices, and top commercial talent is also returning to Italy after gaining extensive experience in other hubs abroad, attracted by favourable tax breaks. We see a lot of movement in terms of VC right now; many new funds were established in the last 24 months, bringing more money, expertise, and competition to the ecosystem. Finally, it is very attractive to be active in Italy: the entry valuations leave room for easier up rounds compared to other ecosystems in the EU".
And, also: "There are still a few challenges that prevent the Italian ecosystem from truly shining. In simple terms, it’s the typical chicken-and-egg problem: On the one side, there isn’t enough VC money, and on the other, there aren’t enough AAA teams. To break this vicious circle, public funding can step in. In that regard, the Italian Development Bank (CDP) is doing a great job as an anchor investor in newly minted VCs. Additionally, as already mentioned, the tax breaks for top Italian talents who have worked abroad and want to return are a step in the right direction".
Finally, Wengi gives to the Italian startup ecosystem some hope: "We are very excited about Italy, for all the reasons mentioned above. I am on the ground in Italy often and organize events where I bring together the most important stakeholders of the ecosystem. I can feel the buzz and see how the ecosystem is growing every day".
Read the full interview here.