Interview with Marco Gaiani, Founder and Fund Manager of Linfa Ventures, the first Venture Capital fund vertically focused on Agrifoodtech innovation, launched in partnership with Riello Investimenti Partners SGR

Marco Gaiani is the Founder and Fund Manager of Linfa Ventures, the first Venture Capital fund vertically focused on Agrifoodtech innovation.

The fund was launched in partnership with Riello Investimenti Partners SGR. Riello Investimenti Partners SGR manages Private Equity and Private Debt funds amounting to circa € 280 million raised from a large number of diversified investors.

Marco began his career as a manager in large corporates, such as Procter&Gamble, Ferrero and Levi’s. Later he gained experience as an entrepreneur, investor and advisor in the Italian startup ecosystem.

You began your career as a manager in large corporates, such as Procter&Gamble, Ferrero and Levi’s, and later you approach the venture capital industry. Can you tell us more about your professional experience?

Marco: I can identify two phases in my professional life.

The first one, of almost 25 years, is the experience in corporations. I was born professionally in the marketing and sales department of P&G, a company where I worked for 16 years in various roles until I reached the position of Managing Director Laundry and Bleach South Europe. I worked both in Italy and in some foreign markets, including Africa, the Middle East, and then Switzerland.

Later I worked at Ferrero where I had global responsibility for the snacks and bakery product category and vertically on the Kinder brand.

I believe that both my experiences in P&G and Ferrero helped me to develop an ability that I think is quite important in venture capital, the “pattern detection”: by dealing with different businesses in very different countries, I learnt how to identify and understand the fundamental elements of the most promising and virtuous business models.

Then I returned to Italy as CEO of Levi’s for part of Southern Europe countries. This experience added to my skillset a strong competence in retail.

The second phase of my professional life consisted of promoting various entrepreneurial initiatives that were based on two areas of great interest to me: food and innovation.

As a result, I created a small restaurant chain, I invested as a business angel in various startups, I was a co-founder of Seeds and Chips, the first global event dedicated to foodtech launched with the Milan Expo in 2015. At the time, foodtech was still a relatively neglected category in global venture capital. It exploded later, achieving media notoriety in recent months, especially in the post lockdown period.

Now you are Founder and Fund Manager of Linfa Ventures, a venture capital fund focused on agrifoodtech launched in partnership with Riello Investimenti Partners SGR. Can you tell us more about the decision of Riello Investimenti to expand into venture capital investments? Why the focus on agrifoodtech innovations?

Marco: The market and investors are increasingly demanding highly profiled investment products and specific skills to manage them.

Today there is a lot of liquidity in the market, but there are not many truly interesting deals. The interesting ones are often targeted by many investors. For this reason, products with a very clear investment profile, managed by teams with the expertise to find promising investment opportunities and adequate management, are very attractive products for investors.

This is why we decided to focus on a specific vertical because we think we have the right knowledge and skills to do so. Agrifood is the largest sector of the economy, both in Italy and globally, and it is a market with potential.

Our investment focus is somewhat broader than traditional venture capital.

On the one hand, we look at startups in the late stage and positioned in the so-called growth segment. On the other hand, we are very interested and we believe that there are also numerous investment opportunities within SMEs and districts in Italy. There are many SMEs, typically longstanding family-run businesses, where at some point one of the family members identifies a product or process innovation and sets up a new company, a “gem” within the SME. This company, if it opens its share capital to external partners, is an investable scaleup for venture capitalists, and in our view with very good growth prospects. This is true in all sectors where Italian SMEs operate, and it is particularly true in the food sector.

Our fairly industrial focus led to a very strong dialogue and chemistry with Nicola Riello and Riello Investimenti Partners SGR and made it very easy and natural to launch this product in partnership.

Riello Investimenti Partners SGR has always been a multi-asset and very innovative asset management company. It was one of the first asset management companies in Italy to launch private debt funds in Italy, as well as to have important attention on ESG matters. The common views on the approach to venture capital, very industrial and focused on a broad and fundamental vertical for the Italian economy that is agrifood, as well as the idea of using SMEs as an origination platform, were the main factors that contributed to the partnership.

What is the fund target? Can you tell us more about the fund investment strategy?

Marco: We have a funding target of € 80 million with the first closing at € 40 million.

Our geographic focus of investment is Italy for at least 70%. However, we do not exclude the possibility of investing abroad. In this case, we will focus mainly on Europe and Israel, because we believe in proximity to targets.

As the first Italian fund with a specific focus on agrifood, we see ourselves as lead investors. In the case of non-Italian investments, we will also act as co-leader and co-investor. Our initial investment ticket will be between € 2 and 5 million, plus follow-ons.

We started raising capital relatively recently, and we have had a good response from the market, so we are already working on a couple of promising deals.

One last question. As an investor, what do you think of the Italian venture capital industry? What factors are necessary for its development?

Marco: Italian venture capital has developed a lot in recent years, but there is still a long way to go.

I believe that many things are still needed for its development, among which I would mention – not in order of importance – a more active role of corporates. In my opinion, corporates, against their interest, have more “image-based” than “substantial” investments into startups. Corporations could and should be more courageous and get more involved in dealing with the startup ecosystem.

There is a need for a greater “crossbreeding” of competencies among venture capitalists and more business-oriented profiles. But there also is a need for a greater number of professional (and non-professional) investors who could and should support venture capital.

What I am reasonably optimistic about is that prospective deals exist. Talking to other investment funds, startups and entrepreneurs, I see a lot of will and commitment.

I also believe that there will be an economic rebound for Italy. Our history, since the earliest times, has been characterised by more or less long phases of decline and then of rapid acceleration. And I hope for a post-pandemic rebound.

So, I believe that Italy is a country that can surprise us in the coming years. Starting with innovation and cascading into other ecosystems.


SUBSCRIBE TO THE SCALEUPITALY NEWSLETTER

For more info on Riello Investimenti Partners SGR, visit: http://www.rielloinvestimenti.it/en/index.html