IAG INDEX: the indicator that monitors investment opportunities for business angels in the Italian start-up ecosystem – first statistics

Italian Angels for Growth (IAG), the largest business angel network in Italy, recently presented the IAG INDEX, an indicator that aims at monitoring the vibrancy of the Italian start-up ecosystem in terms of investment opportunities for business angels. It also helps to monitor the trends in the Italian seed venture capital.

In 13 years of activity, IAG has analysed over 5,500 start-ups and has finalised over 85 investments through club deals. IAG business angels has invested more than € 33 million in companies that overall have raised additional € 166 million from investors.

The index, which is calculated on the IAG’s deal flow, is based on 5 parameters: industrial sector, stage of the fundraising round, valuation, geographical area and gender diversity in the team.

The main results – as of June 2020 – are the following:

  • Sector differentiation is balanced between four main macro-areas: deep tech, digital, life science and fintech. 38% of the analysed start-ups are related to the digital area, which includes several sub-sectors such as: B2B software, marketplace, fashion, food & agritech, turism, etc. 24.7% of the analysed start-ups and about 50% of the finalised investments are related to start-ups of the life science sector, and in particular biotech (pharmaceutical research and innovative biological materials) and medtech (mainly medical and robotic instruments aimed at revolutionising medical treatments and processes).
  • Most of the IAG’s deal flow is related to start-ups looking for seed capital (64.6%). That means start-ups with a product / service already tested on the reference market, and therefore looking for capital to start sales and create an organisation. A lower number of start-ups (18,9%) contact IAG for a series A round. These are companies in their scaling-up phase, with a validated business model and KPIs to present to investors.
  • The average pre-money valuation of Italian companies looking for pre-seed capital is € 2 million (determined on the basis of the company’s growth potential and innovation level). € 5 million is the average pre-money valuation in the Italian seed rounds, and € 14 million for Italian series A rounds. Valuations related to non-Italian companies are 10% / 20% higher in the pre-seed and seed rounds, but aligned to the Italian market values in case of series A rounds.
  • Italian start-ups represent 53.3% of the analysed IAG’s deal flow. The remaining part is related to international investment opportunities introduced by incubators, accelerators and research centres from all over the world, and seized thanks to international events and competitions.
  • Regarding gender diversity, 22.9% of the analysed start-ups have at least one female founder in their teams (higher than the international average, which is about 20%). The number of “female” start-up is particularly significant in the life science sector, where one third of the analysed companies have at least one female founder. And it is more significant for companies in the preclinical phase, rather than in the clinical phase. In the digital and tech areas, the female presence is more common for start-ups already generating revenues, rather than in the pre-revenues phase. Gender diversity seems to be important, commercially speaking.

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For more info (in Italian) visit: https://www.italianangels.net/blog/iag-index/