How was 2025 for the Italian start-up ecosystem? A good year, a not-so-good year? The indicators vary, but in general the balance sheet is still far from positive because the Italian startup ecosystem is still struggling. It has not yet managed to make the quantitative and qualitative leap that all operators have been expecting for years, at least since the 2012 startup law came into force, but which has not yet materialised.
Of course, there has been growth both in numbers and, above all, in quality. There are more investors and more and more talented entrepreneurs. There are also companies that have grown from start-ups to scale-ups and even some global champions, which is a testament to the country’s entrepreneurial capacity, which is certainly not inferior to that of other countries. However, there is a lack of scale and critical mass, both in terms of the availability of money to invest and in terms of the relevance of the start-up world in the context of the country’s socio-economic landscape.
Francesco Cerruti, general manager of Italian Tech Alliance, an association of venture capital investors and innovative entrepreneurs, highlights how expectations for 2025 were high but only partially, and to a small extent, materialised: ‘In my opinion, we need to consider three parameters: the activism of institutional investors, the role of Europe, and the development of success stories of entrepreneurs. The first point was disappointing despite expectations following the approval of the Competition Law and, in particular, Article 33, which was supposed to facilitate institutional investors’ approach to the start-up asset class. The results are, to say the least, poor; too little has been done. Europe has produced a lot of talk, there is talk of the 28th regime, reference is made to the Draghi report, a Commissioner for Start-ups has been appointed, but so far the results have been almost nil, and this attitude is not good for the ecosystem or for the reputation of Europe and the European Commission in particular. The third point is the most satisfying because today, even in Italy, there are success stories that everyone knows about, Bending Spoons, of course, but also other companies in various sectors will emerge as examples of a highly virtuous ability to build businesses that are successful both economically and financially and in terms of strengthening the culture of innovation, thus demonstrating how start-ups are a winning response to the major problems afflicting the world’.
Institutional investors do not seem to be particularly interested in start-ups, and this is more a cultural issue than one of financial opportunity. There are no more excuses: the legislation has been passed and is now in force. What is needed is a change of direction and a strong awareness, driven in part by CDP Venture Capital with its Previdentia project, a fund of funds that aims to attract capital from institutional investors such as pension funds.
The EU must decide what it wants to do. It cannot afford to let the 28th regime project fail, just as it cannot procrastinate on the Scaleup Europe Fund, which is extremely important because the issue of funding does not concern the early stages so much as the growth stages, the scale-up phase, and this is where the issue tends to become dangerous in the long term because there is a risk, as has already happened, that European start-ups that grow will then be forced to migrate elsewhere to seek the capital necessary for the development and growth phase. The 28th regime must be implemented, it must come in the form of a regulation and not a directive, so that it can be transposed in the same way by all EU countries, and it must come as soon as possible. The entire European ecosystem, starting with the associations, is actively and strongly calling for this regulation to be implemented, as it is a fundamental element in boosting the competitiveness of European companies that can no longer afford to waste time and money navigating the various bureaucratic regulations when they decide to grow, expand across the continent and seek capital. It is a bit like having many small tariffs that hinder the competitiveness of the European ecosystem. The process is certainly not simple, but it is an essential step. The debate now focuses on how broad the 28th regime should be, i.e. what characteristics companies must have in order to qualify. Of course, the best position would be the least restrictive one. This should be the most sensible approach, to which further incentives could then be added by defining specific parameters for start-ups and scale-ups, but unrelated to the possibility of applying the 28th regime (here is a link to a very well-made video explaining why the 28th regime, also known as EU-Inc, is essential).
“With 2026 approaching,” continues Cerruti, “it will be very important to understand clearly what the Italian government’s strategies are with regard to start-ups. we will see if there are any decisive signs in terms of a commitment to support the ecosystem, including in terms of reorganising the regulatory framework which, in many cases, as we have seen to date, is unable to produce the desired effects, starting with the so-called ‘Consolidated Law for Startups’, a much-discussed project that is still effectively at a standstill. In addition, there is also a structural deadline that will cause the entire ecosystem to take a step backwards, namely the fact that on 31 December 2025, the possibility for private individuals who invest in start-ups to enjoy a 30% tax deduction will expire. This is because the government was too late in requesting an extension and therefore the deadline will inevitably be missed. Of course, the government has taken action, albeit late, so everything suggests that these instruments are considered interesting, but at the same time, the fact that it has taken action late may suggest that the issue is still too marginal, not a priority, and this is where things need to change in 2026′.
2026 will be a special year, an ‘Olympic’ year, so to speak, not only because the Milan-Cortina Winter Olympics will open on 6 February, but also because it is the year leading up to the next general election, which will be held in 2027 at the end of the current legislature. In short, it will be a key year, and not only for the start-up ecosystem, although the hope is that there will be a clearer and more decisive stance on the issue by the government, also in view of the possible reorganisation of CDP Venture Capital, which is expected to take an even more effective position in support of the ecosystem.
“We were hoping to start running,” says Cerruti, “but instead we are still too slow.” The final figures for the year in relation to investments in start-ups are not yet available, but will be released in the coming weeks. However, the partial indicators do not suggest any growth in the ecosystem. On the contrary, it is very likely that 2025 will see a contraction compared to 2024, and it is estimated that the final figure will be just over €1 billion in total.
Giorgio Ciron, general manager of Innovup, another association supporting the start-up ecosystem, shares a similar view: “2025 proved to be a complex year for Italian venture capital, especially when compared to the absolute investment volumes of its main European competitors. Although these countries did not record significant growth in 2025, with significant contractions in some cases, they continue to mobilise resources on a scale significantly higher than Italy. As a result, Italy has failed to close the gap with these neighbouring ecosystems, which remain firmly in a ‘different league’ in terms of venture capital investment capacity. In this scenario, the legislative response took the form of an extensive regulatory package introduced with the 2024 Annual Market and Competition Law, the so-called Centemero Law, and certain articles of the 2025 Budget Law. The main objectives of this reform include, on the one hand, the mobilisation of large amounts of private capital to bridge the liquidity gap with foreign countries and, on the other, the selection and support of companies that are truly capable of competing on international markets. Its main pillar is the obligation for pension funds and social security funds to allocate a portion of their assets to venture capital, a measure already adopted in the United States and also provided for in the European Startup and Scaleup Strategy. The legislator’s intention was to mobilise the large amount of managed savings in Italy, estimated at between €150 and €300 billion, by allocating approximately 1% to venture capital investments, a significant increase in liquidity for innovative start-ups and SMEs in our country. However, implementation has proved complex. Despite the gradual easing of restrictions, from 0.5% to 0.3% of assets under management in 2025, then 0.5% in 2026 and 1% in 2027, the rule has long remained unenforced due to resistance from the pension sector and interpretative uncertainties regarding the definition of venture capital, which could require further amendments subject to European approval and also risk compromising the application of the rule in 2026. However, pending these amendments, as there is a regulation in force and fully implemented, after the initial stalemate, there are signs of progress with pension funds and schemes beginning to open the first calls for venture capital funds to avoid losing the important tax incentive on all their qualifying investments. Although somewhat timidly and a year later than planned, the hope is that this new dynamic will finally unlock the liquidity needed by venture capital funds and generate the increase in investment essential to revitalise a market that is still too static.
What Ciron says is in line with Cerruti’s statement, and further confirmation of this position can be found in the above-mentioned issue of the 30% extension: “Added to this is the uncertainty surrounding the extension of the 30% tax incentive for private investment in innovative start-ups and SMEs,” continues the general manager of Innovup. “The measure is due to expire and the necessary European authorisation will only arrive after the first quarter of 2026, creating a regulatory vacuum that could penalise investments in the pre-seed and seed phases in particular. Moreover, while the so-called de minimis deduction of 65% remains in place for start-ups, for SMEs, for which this latter incentive has been eliminated with the ScaleupAct, there would be no tax incentive left to attract private investors. Alongside measures to attract capital, the ScaleupAct also redefines the scope of the players in the supply chain. Start-ups, scale-ups, innovative SMEs, incubators and accelerators now operate within a new regulatory framework, clarified by a recent circular from the MIMIT (Ministry of Enterprise and Made in Italy, ed.). The status of start-up and scale-up now becomes a goal based on concrete results. The criteria established in 2012 for entry into the register of companies remain valid, with the addition of the obligation to fall within the European definition of SMEs and the explicit prohibition of agency or consultancy activities as the main business. For companies already registered, there will be a transitional period, with annual checks and progressively more selective requirements after the first three years, such as an increase in research and development expenditure to 25%, contracts with the public administration or significant growth in turnover or personnel. The main change is the possibility of extending membership to seven and then nine years, reserved for companies that demonstrate strong growth, validated by qualified investments or a doubling of revenues. The reform also updates the certification of incubators and accelerators, including more flexible operating models aligned with international best practices, as well as tools such as an 8% tax credit if these entities make investments in innovative start-ups. In light of this scenario, the entire sector is eagerly awaiting the ‘Consolidated Law for Start-ups’, which is expected to be delegated to the Government in the annual SME Law, in order to reorganise the currently fragmented legislation, offering a comprehensive and stable framework and recognising the structural role of the innovation ecosystem for the country’s competitiveness.
So the long-awaited leap forward in 2025 failed to materialise. We have seen how this failure is caused by various factors, but we must also ask ourselves whether the Italian ecosystem has done and is doing everything possible to put itself in a position to grow. Considerations regarding the role of both national and European governments remain valid, as do those regarding the commitment of institutional investors, but we must also look within the ecosystem. Here too, there is room for improvement. The Italian ecosystem has its own characteristics: it is an ecosystem that cannot live on its own but must develop within the European context and therefore increasingly strengthen its collaborations with other ecosystems on the continent. This is a step that has already yielded significant results, given that most investment rounds in Italian start-ups in recent months have seen the presence of international investors, which is far from rare. It is an ecosystem that must work with ever greater synergy, celebrate successes in a transparent and enthusiastic manner, but also show that it is healthy because it is capable of getting rid of dead weight by avoiding futile efforts on start-ups that show no capacity for growth, for example. It must be increasingly transparent, committing to communicating more frequently figures and amounts relating not only to investment rounds but also to exits and mergers and acquisitions, which are often announced without the underlying values, making this news incomplete and unable to contribute to the overall value that the ecosystem is capable of producing. It must be more confident and more committed to giving value to everything that complements it, such as the media, which is fundamental but perhaps not given adequate consideration. It is difficult, and we say this from direct experience, to manage publishing activities in a sector that we can still consider emerging, such as start-ups. a sector that rightly knows how important it is to talk about what it does, but which must also consider the possibility of supporting its reference media more strongly, especially the independent ones. This is not just an Italian issue; in the rest of Europe, too, tech publishing is experiencing a period of severe crisis, but it is precisely at times like these that courageous decisions need to be taken. It is an ecosystem that must also structure itself in order to be recognised through a major Italian tech event that is independent and generated by the community. It cannot be satisfied with events organised by private organisations that set them up, from their point of view rightly, mainly for marketing and business creation reasons. It is an ecosystem that has achieved a great deal, and having followed it with Startupbusiness since 2008, we have seen its evolution and its ability to structure itself, improve, grow, set clear rules and produce effective, sometimes even surprising results. but it is an ecosystem that must now move beyond its current phase and must try to do so by drawing on its own strengths, working together, supporting itself internally with conviction and resources, rather than waiting for the arrival of appropriate regulations, which, in any case, remain fundamental. (photo by Ivan Oštrić on Unsplash)
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