For more than 15 years, Fabio has worked in the analytics space, promoting advanced analytics to Italian businesses via successful ventures and universities activities to divulge the opportunities presented by the sector.
Before launching GELLIFY, Fabio worked in Accenture as ICEG Analytics lead and Accenture Insight Platform Sales global lead, after Accenture acquired i4C Analytics, a B2B software vendor operating in the advanced analytics landscape, founded by Fabio some years before.
Fabio graduated from Bologna University with a BSc in Economy.
You have always worked in the analytics space, and then in 2017, you founded GELLIFY, an innovation platform that invests in B2B startups and put them in contact with traditional corporates. Can you tell us more about your professional experience and how the idea of GELLIFY came about?
Fabio: GELLIFY was created from a combination of unplanned events.
I started my professional career in the analytics sector, which I was already passionate about at university. I studied economics, but being deeply mathematical at heart, I was passionate about statistics, so much so that I set the final part of my university studies on this subject. I finished my studies with a thesis on artificial intelligence, which was pioneering at the time.
After university, I started working in analytics. I launched my first company, which I sold to IBM in 2009. After that, I found a second company, i4C Analytics, which I sold to Accenture in 2014. i4C Analytics was a company placed in Gartner’s Magic Quadrant of Advanced Analytics Platforms; it was like being in the top 10 in the world in analytics.
The sale of the latter company gave me access to two worlds that I had not known before.
The first was the world of HNWIs, with investment potential that I could not see back. I was aware that starting to invest in areas that were not close to my professional path could be extremely risky. Despite having a successful track record as an entrepreneur, I have never presumed to invest in everything. However, I was determined to invest, given the available capital and disappointing returns on traditional wealth management products.
The second was the world of innovation within a giant like Accenture. With the sale of i4C Analytics, I worked at Accenture for three years. I worked in Silicon Valley, where, in 2015, I witnessed the birth of the “Innovation Architecture”, an architecture that put the whole innovation theme at the heart of Accenture’s projects for the following five years: open innovation, innovation advisory, relationships with startups. It made me perceive that in Italy, we were lagging so much.
So, in 2016 I started an initial personal investment journey, with a role that I define as a “business angel on steroids” because I wanted to have a more significant impact by investing larger amounts of capital than the average Italian business angel. At the end of 2016, together with another partner, we realised that we invested a significant percentage of the Italian venture capital market, which amounted to around € 100 million. And that seemed to us to be a completely wrong figure.
At that moment, I realised there was an opportunity to be seized. Moreover, it was clear to me that VC investments would increase over the following five years, thanks to the Italian industry’s maturation and the amount of liquidity in the market. In addition, more expertise and verticality would be sought from VC investors. In 2016, there were funds in the US focused entirely on B2B, which was not the case in Italy. It was also clear that corporates were becoming more interested in the world of open innovation, and therefore in working with startups.
Therefore the idea of creating a company that would not only invest – by pooling capital from other entrepreneurs who, like me, had sold their companies mostly “under the press radar” – but would also help portfolio companies to do better with vertical competence in B2B.
Can you better explain how do you help startups in the Gellification Program? What kind of support do you give to startups?
Fabio: Typically, the startups we deal with are convinced that Gellification means that we act as a sales channel for them. It is something we do, but this is not Gellification.
Gellification means working on the internal processes of a company. With two B2B companies created and sold, I can say that in B2B software, the operational processes are known and standard. Therefore, it doesn’t make sense to completely reinvent the operational processes because, at the exit, the big acquiring company expects to find a specific type of structure during due diligence. So, with the Gellification Program, we work with entrepreneurs to set up the core processes of their company without interfering with the business strategy.
Alongside the Gellification Program, we provide startups with sales support through our consulting arm. GELLIFY provides innovation advisory and digital transformation services to corporates. When we advise on addressing specific issues, we often propose technologies that the companies we have invested in provide. In doing so, we help portfolio companies sell their products and increase their revenues and equity value.
GELLIFY also co-invests into B2B tech startups with the Azimut Digitech Fund, a venture capital fund launched in 2020 by Azimut Libera Impresa SGR (Azimut Group) in partnership with GELLIFY. Can you tell us more about the fund investment strategy?
Fabio: We have structured a solid relationship between GELLIFY and the Azimut Group. Azimut decided to launch a fund, Azimut Digitech Fund, and appointed GELLIFY as General Partner of the fund. When we choose to proceed with an investment, GELLIFY, through its investment vehicle GELLIFY Digital Investment, co-invests with Azimut Digitech Fund, according to a 1 to 2 ratio (GELLIFY invests € 1 and Azimut invests € 2).
In this way, in addition to having more investment potential, we allow Azimut Digitech Fund to benefit from the activity that GELLIFY carries out in favour of the startups in its portfolio, as described earlier.
And I must say that the initiative has been quite successful. In few months – between the end of June and the beginning of September 2020 – the fund raised commitments for € 65 million from private investors, primarily entrepreneurs, and no institutional investors. And we are already working with several companies owned by investors in the fund. So it is an exciting example of an ecosystem; it’s a driver for investors and us to innovate together.
Regarding the investment strategy, the fund invests in the seed and early-stage phases because there are smaller startups in Italy that need funding from the beginning. Therefore, we try to do bigger rounds than the Italian average at the same stage. We will invest about 70% of the fund in companies with revenues between € 0 and 2 million, and the remaining 30% in larger companies.
We have an investment policy that seeks, on the one hand, to stimulate the growth of companies, and on the other hand, to limit risk by having B2B tech as the primary investment criterion, an area we are very familiar with. We also try to invest at valuations that make sense for the Italian context and its exit prospects.
One last question. As an expert and investor in the Italian B2B space, what do you think of the Italian venture capital industry? What factors are necessary for its development?
Fabio: To understand what factors are needed to develop the Italian VC market, we have to start from the end: we need more exits. It is crucial to create an M&A exit market that justifies the investments. Otherwise, it is difficult to find investors if you cannot sell what they have invested in. Understanding who can buy a startup and at what price is a key element of the investment strategy. We have always worked on this from the beginning, thanks to our relationships with buyers even before GELLIFY.
Furthermore, I believe that private capital must circulate more than it has done so far. Entrepreneurs, who have significant money at their disposal, must realise that tomorrow’s economy will also be digital; Italy must be a country with a digital economy. In my opinion, incentivising the digital economy for those with significant capital is a matter of giving back to the Italian economy.
Finally, I think that corporates should start approaching startups more constructively. The management of corporates should begin understanding that doing business with startups is not “show business”, but it is a business that, if done well, brings value to the parties and the whole system.
We need to create an ecosystem, which is what we are trying to build with GELLIFY.
SUBSCRIBE TO THE SCALEUPITALY NEWSLETTER
For more info on GELLIFY, visit: https://www.gellify.com/