In Europe they decrease, in Italy they increase. What is happening to start-up investments?
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The ceiling of 1.8 billion euros has been exceeded, thanks to 323 operations: this is the balance sheet of the Observatory on Venture Capital in Italy created by Growth Capital in collaboration with the Italian Tech Alliance, which confirmed compared to 2021 a
48% growth (the highest percentage at European level) of loans distributed to startups, scaleups and innovative SMEs. A decidedly important result, only partially overshadowed by the final balance for the fourth quarter, where the significant slowdown in funding is evident, down to 203 million euro, although the number of rounds (75 compared to 79) remained in line with the average annual. As stated in the report, there are two trends that have characterized the last twelve months and which should be confirmed (at least the first) also in the new year: the greater participation of international VCs, whose incidence has increased from 58% to 67% (with an average size of deals signed practically double, 9.5 million against 4.3 million, compared to those concluded by national investors alone), and the increase in the number of transactions above 100 million euro, concentrated above all in the third period of the year. Another important figure, and useful for defining the 2022 scenario, is that of the exits: there are in fact 38 (compared to 30 in 2021) the liquidity events that have affected startups, for an overall value in terms of “enterprise value” that Growth Capital estimates over one billion euros.
Increase the number of seed rounds and average deal value
The mega rounds of Satispay (a 320 million euro Serie D), Newcleo (300 million euro Serie A), Scalapay (212 million euro Serie B) and Casavo (100 million euro Serie D) weighed positively on the 2022 budget ) and it is important to underline how the Italian VC was impacted in a reduced way by the macroeconomic and financial tensions, highlighting a development dynamic in contrast with the contraction that affected Europe as a whole and other advanced markets on a global scale. Considering the segmentation of deals by type, in 2022 a total of 57 Serie A, 19 Serie B and 176 Seed rounds were closed (43 more than in 2021). The latter make up half of the total deals and suggest an increase in “Late Stage” deals in the next few years, which in turn has been progressively growing since 2017. As for the average value of deals, the past year saw a leap towards This indicator is high in all sectors with the exception of the Media sector (where it decreased by 52%) while FinTech (13.1 million euros) and Smart City (9.4 million) are confirmed as the segments with the highest average ticket high in 2022.
The most active sectors and VCs
Considering the sectors to which the financed companies belong, the Smart City sector is by far the most populated in terms of the number of deals announced in 2022 (as many as 54) followed by Software and DeepTech (with 44 and 40 respectively). Looking instead at the amount of funding raised, there are two sectors that compete for the top step of the podium, Smart City (with 501 million) and Fintech (499 million), which together account for more than 50% of investments. CDP Venture Capital, on the other hand, remains the most active investor in terms of deals announced in 2022, ahead of Azimut and LVenture. Looking to 2023 and beyond, the feeling of Francesco Cerruti, General Manager of the Italian Tech Alliance, is that the Italian ecosystem can finally “aim in the coming years for an increasingly central role in the tech sector in Europe” especially if actions strategic ones such as the necessary modernization of the Consolidated Text on Startups, now more than 10 years old.
The European slowdown The data is irrefutable
Venture capital investments in Europe marked a sharp decline in 2022 and the 91.6 billion euros invested in the last twelve months demonstrate this compared to the 108.9 billion of the previous year. The analysis is by Pitchbook, which in its annual report also highlights the causes of this (although expected) collapse. Meanwhile in the number of deals concluded, which fell from 13,028 to 12,383, and then a mix of factors, including high inflation, the increase in interest rates, weak economic growth and great uncertainty in geopolitical terms. in detail, the experts have found that late stage and growth operations are once again preponderant on the total investments made by VCs, weighing respectively 43.5 and 16.6 billion euro and remaining at the levels (around 65%) of 2021. The United Kingdom and Ireland, on the other hand, are confirmed as the most important markets in terms of size, with around 27 billion euros (29.4% of the total) raised by startups based in these two countries.
Fintech at risk of degrowth
Finally, the snapshot of the individual sectors tells us that Fintech is the sector that has been able to attract the interest of investors the most, although it is also down compared to 2021. The greater propensity of companies and consumers to use financing instruments digital compared to traditional financial services has fueled a development path which in the last four years has seen the average value of transactions consolidate in the order of 20% of the aggregate value of VC investments in Europe. However, according to Pitchbook analysts, 2023 will lay bare the problems that the financial landscape experienced in the past year and will probably lead to an important change of direction for investors, already more oriented in the last quarter of 2022 to focus on other sectors, starting with electric mobility.
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