Interview with Giuseppe Donvito, Partner at P101 Ventures, a leading Italian VC firm mainly focused on early-stage investments in the digital sector

Giuseppe Donvito is Partner at P101 SGR, one of the leading venture capital firms in Italy (p101.it). Giuseppe has been working in the venture capital and private equity industry for more than 19 years. He began his career in the Telecom Italia’s Strategy Division, and then gained experience as professional investor in both Italy and Europe, working with companies such as SOFIPA SGR, 3i Group plc, HSBC Bank, and Neo Capital Private Equity. He joined P101 in 2014.

Giuseppe graduated in Telecommunications Engineering at the University of Pisa, and attended the Advanced Executive Program at the Kellogg Business School in Chicago (USA).

Q: You have been working in the VC industry in Italy since the early 2000’s. How was the industry back then? And how much has it changed till today?

Giuseppe: We can start speaking about a venture capital industry in Italy from the end of 1990’s / early 2000’s, with the Internet expansion and the development of the first Internet-based businesses and applications. At that time, it was a very high-risk industry, with few good investment opportunities, little available capital, and a limited number of small venture capital funds operating on the market. Moreover, the M&A activity was not so relevant as today.

Then, after the Internet bubble, and therefore after 2003, the Italian VC industry had disappeared for approx. 10 years. It came back in 2012, and in the last 5 years we have experienced interesting developments. The Italian VC ecosystem has increased in importance and has improved significantly, in terms of quality of the investment opportunities, but also in terms of available capital for investments (from € 100 million registered in 2012 to approx. € 500 million in 2018).

For more info read: Italian venture capital investments are (finally) increasing: the market in 2018

Q: But despite the industry developments, we are still far from the European average. In your opinion, what are the aspects we need to work on to make Italy a competitive landscape at a European level?

Giuseppe: It is true, we are far from the European average, but the trend is positive: last year we had the first successful exits, and the number of specialised operators is constantly increasing.

For a proper development, I believe we need first of all more capital to invest, but also the cooperation of the “old economy”, willing to invest in innovation by approaching start-ups, either for commercial partnerships or for acquisitions.

Q: P101 has invested in 29 companies which employ over 700 people. Last year P101 SGR launched its second fund, Programma 102, with a € 120 million target, twice the amount of the first fund. What is the investment strategy of Programma 102?

Giuseppe: Programma 102 invests in B2C and B2B digital and technology driven companies based in Italy or with an Italian angle (European companies led by Italian entrepreneurs or planning to enter the Italian market).

Its funds target high-growth companies, and invest entry tickets between € 1,5 million and € 3 million in series A rounds, and higher amounts in subsequent rounds.

From an investor’s point of view, venture capital is an interesting asset class that can be considered in the construction of an investment portfolio, as it is decorrelated and can generate interesting returns compared to other asset classes.

Q: Do you think that Italy is now an interesting market also for non-Italian investors? Why?

Giuseppe: Yes, Italy is very interesting now, mainly because:

  • we are at the beginning of the expansion phase of our business cycle, and company valuations are still very reasonable (and accessible);
  • the level of technological knowledge is always very high: Italy employs some of the best engineers and scientists in the world, at relatively low costs;
  • new capital and new rounds are about to arrive, and probably it would be easier to participate to new rounds with existing domestic players.

Visit P101’s website: p101.it