As every year, October is an opportunity for Growth Capital to publish its “Quarterly Observatory on Venture Capital in Italy” with the participation of Italian Tech Alliance. Several players from the ecosystem, both market and institutional, gathered at the Zest hub in Rome to review this preliminary report and discuss policy.
2025 was, in fact, the year of policies for the innovative ecosystem and venture capital, from the 28th Eu Inc regime to the Competition Decree Law. There have been several attempts to reduce bureaucracy, simplify and unify regulations. Yet, as Francesco Cerruti, director of Italian Tech Alliance, pointed out, ‘words are one thing and deeds are another: starting with the competition law and its Article 33, which is not yet fully operational, while at European level, a proposal has just been put forward today to develop a directive, and not a regulation, on the 28th regime. The government’s request for an extension of the 30% tax relief for those investing in start-ups still seems uncertain. In short, a year characterised by many ‘perks’ and announcements that, instead of being remembered as the year of policy, could be remembered as rather disappointing”.
This bold move also served as a barometer and trailblazer for the presentation of the Growth Capital report, which revealed positive market figures, but ones that are still not competitive enough.
In the third quarter of 2025, 75 rounds were closed in Italy and €261 million was invested in start-ups. Compared to the second quarter, there was an increase in investments (€261 million compared to €211 million) and a decrease in the number of rounds (75 compared to 104). During the quarter, there were 7 Series A rounds, 2 Series C+ rounds and 9 exits. According to Fabio Mondini, CEO of Growth Capital, even though ‘the amount invested in the quarter is the highest ever in Italy, it is only slightly higher than in the previous quarter and the number of rounds is still lower’. Fortunately, ‘compared to the first half of 2024, we have a first half of 2025 that is in line’: this is excellent news when you consider that 2024 was the year with the highest number of rounds in Italy, and the same applies to the amount invested without mega rounds. For Mondini, ‘the forecast is that we will exceed the number of rounds compared to 2024 and perhaps even for mega rounds’. .
On the European scene, the third quarter of 2025 saw a decline in the number of transactions compared to the previous quarter, while the amount invested remained stable for 11 quarters, standing at around €15 billion in 2,344 rounds.
Returning to the Italian scenario, the third quarter of 2025 (75 rounds closed) therefore recorded a decline compared to the previous three quarters and, as has been the case since 2023, the impact of confidential rounds remains significant. Specifically, in the third quarter, pre-seed and seed rounds accounted for 68% of the total, while no Series B rounds were recorded. In terms of amount, the two Series C rounds accounted for 34% of the total invested in the quarter (€261 million). The number of rounds and the amount invested in the Series A phase were below the average for the last two years. And for the first time in the last two years, no new funds were announced in the third quarter of 2025.
So, a small number of Serie B and C rounds and on the decline, which has always accounted for 20% of the total in Italy. In short, a real bottleneck.
Among the positive news is the smart city sector, which continues to lead the way in terms of investment, followed by software. The presence of international investors is also growing, and Italy continues to play an increasingly important role in Europe in the space tech sector. This is a highly complex sector, with a market that relies heavily on public investment and the vertical sub-sector of data collection and transfer. With the dual-use concept, there has been enormous growth in these technologies since 2022: at European level, one in three corporations and one in two SMEs are Italian, with 15 hubs and 5 incubators also Italian, accounting for 15% of the entire European space tech ecosystem. This sector currently has 50 Italian start-ups and, according to Matteo Botticelli (CDP Venture Capital), will need at least ‘£350 million in investment over the next year to grow’. Botticelli then announced CDP Venture Capital’s intention to set up a vertical fund solely for space, or rather, for Eurospace.
Finally, the point of view of the president of CDP VC, Emanuele Levi, on the state of Italian venture capital: “The job of a venture capitalist is a job for optimists. These figures tell us one thing: that Italy is an ecosystem in a phase of delayed development, and the fact that there are no mega rounds is a structural problem: either they appear, or we are destined not to complete the development of the ecosystem. I wonder if the time has come in Italy, starting with managers, to be selective and bet on a few that can take off quickly, as has happened in France with some champions.”
The game to be played is therefore entirely in the future, both in the short term, at the end of the year, and in the long term. This was also emphasised by the president of Italia Tech Alliance, Davide Turco: ‘The challenges of the future are advancing computing, AI and biotech, and if you can’t get there, you reduce your opportunities’. Roberta Angelilli (Lazio Region) also said, ‘It’s time for action. A big game is being played at European level. We must no longer feel that we are just from Lazio or Italy, but Europeans, because the challenges are increasingly global. For the regions, we are in the process of reprogramming European investments, and we in Lazio want to focus on one of the five European priorities, which is competitiveness in terms of space and defence, but also start-ups, scale-ups and VC. In addition, now is also the time for planning, with €400 billion in investments over the next few years at European level.”
In short, the report’s data show a Europe that is stable in terms of growth but with significant geographical disparities and polarisation in terms of round size and sector. Although this is the first year for the highest amount and an increase in international investors, the negative data concern the transition between series A and series B, and finally the issue of exits and IPOs: fewer exits mean an increase in secondary transactions because the funds are closed and must then return the money to the LPs.
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