November 8, 2021 Interviews

Interview with Paolo Gesess, Co-Founder and Managing Partner of United Ventures, a leading Italian independent Venture Capital firm supporting visionary entrepreneurs to reinvent industries through technology

Paolo Gesess is the Co-Founder and Managing Partner of United Ventures, a leading Italian independent Venture Capital firm supporting visionary entrepreneurs to reinvent industries through technology.

Paolo has originated, managed, and exited venture capital deals since 1998.

Before co-founding United Ventures, he was the Founder and General Partner of Jupiter Venture, one of the top quartile VC funds in Europe.

Paolo graduated in Economics from the University of Turin and has been a Chartered Accountant since 1999. He has been an Academic Fellow at Politecnico di Milano and Lecturer at MIP and Bocconi University on venture capital and entrepreneurship.

You have been working in the VC industry since the late 1990s. How much has the Italian VC industry changed? Is Italy an attractive country for VC investments?

Paolo: My career in venture capital began in 1997 when the world of internet connectivity was converging on telecommunications. It was a moment of great interest in such technological innovation that could change some business models. In fact, in 1997, I looked for companies developing internet protocols and new business models in Italy and abroad.

At that time, we were few players in Italy with little money compared to other European countries. In countries such as the US, the UK, France and Germany, it was possible to invest more in more companies and consequently get more positive results. Therefore, more success stories and the virtuous cycle that makes the venture capital industry grow appeared earlier.

The world of venture capital takes a long time. It takes time to develop innovation that transforms the world. It takes time for innovations to be identified and implemented on the market. And it takes time to generate that virtuous effect of new investors wanting to reinvest and new entrepreneurs wishing to launch their company. So you simply have to put yourself in that time frame.

In Italy, we started with few operators, and therefore there have been few success stories so far. But even so, we had companies launched in the late 1990s that created value over the following ten years, such as Tiscali, Yoox, Mutuionline.

So in 2011, with Massimiliano Magrini, we said we had to do something bigger. And we created United Ventures with the ambition of bringing the size and number of opportunities in the Italian venture capital industry up to the same level as other European countries.

Then, thanks in part to the 2012 startup law (see: “Legal framework for innovative startups“) and the intervention of Cassa Depositi e Prestiti with more funding for innovative startups and SMEs, the virtuous cycle took off. And today, in 2021, Italy has a venture capital market of a certain size, with a certain number of operators, and with opportunities for all.

Italian operators now look beyond Italy to opportunities at European, if not global, level, as do other countries. Today, entrepreneurs have opportunities to grow their companies in Italy, both with Italian and international VC funds.

Indeed, the Italian market is still less developed than other ecosystems, but it is large enough for opportunities to generate success stories. The capital available today is there, and it has arrived thanks to the virtuous cycle developed over the last 20 years. It is like a snowball that is getting bigger and becoming an avalanche.

Despite the industry developments, the Italian venture capital market can grow and improve. In your opinion, what are the aspects we need to work on to make Italy a prominent market at a European level?

Paolo: Italy is a country of entrepreneurs. It is a country with a high number of SMEs. The entrepreneurial culture is there, but the culture of growth is still missing. The role of venture capital could be to intercept and help entrepreneurs to think bigger.

Success stories can certainly help. The entrepreneur who sees and hears success stories can be induced to take that extra step. And in the last 2 and 3 years, we are starting to see more exits, especially related to digital technologies.

Furthermore, a culture of failure is fundamental. Those who invest in startups must accept that they will have losses, that some companies in their portfolio will not make it, and that part of their money will be lost. I think that this culture has yet to arrive in Italy. Those who make mistakes in investments are still singled out, but these mistakes must be made. Otherwise, it means that we are not taking the right risks.

In short, many elements must come into play with the right balance. The operators are there, the capital is there, the opportunities are there, but we need the right timing and attitude.

You founded United Ventures in 2013, and since then, the firm has € 300 million of AUM and has invested in approx. 40 companies with three funds. What are the results of the investment activity? What is your investment approach?

Paolo: We started in 2013 with Fund UV1 and invested €70 million in 16 companies from 2013 to 2018. Approx. 10 investments didn’t work out (in some cases, we lost money, in others, we recovered the investment, and in others, we made money). It is as if we did not make those 10 investments. There are another 6 companies in the portfolio where we made follow-on investments that today represent companies that potentially each of them could be worth the entire value of the initial fund. We still have two years to place them on the market. I have to say that the expected return for UV1 is quite positive.

In 2018 we started with a second larger early-stage fund, UV2, and today we are building the investment portfolio. To date, we have 12 portfolio companies, and we target to have approx. 15 companies. And in July 2020, we launched the fundraising of our latest fund UV T-Growth, to support highly innovative growth-stage businesses in Italy and abroad.

For our funds, we select investors who look at the long term with us. This is very important because having investors who are not aligned with the time horizon that venture capital requires could bring the market to a standstill. This has happened in the past. There have been investors who expected significant returns in the short term.

In the first fund, we also had a seed programme, which we no longer do. Seed investing is a very human-intensive area, where initially, very little money is provided. However, since we have the capital to deploy, we decided to make a few seed investments with a logic of important commitment for subsequent rounds.

With United Ventures, we try to have a position in the early-stage world where we would like to be the first institutional investors to enter a startup. If the startup has first raised seed money, that’s fine, but it’s not crucial.

One last question. What message would you like to give to those who are “sceptical” about the Italian market?

Paolo: The Italian market is demonstrating that it is able to produce technology, entrepreneurship, and success stories at the European level. There are venture capital funds with a history and a track record, and there will be more and more of them. Also, we expect success stories to continue to grow in the coming years.

We all need to have the proper time horizon to look at things. So we have to evaluate 2021 by looking at what has been done in the last ten years and the potential of the next ten years.

Of course, there is room for growth and improvement. But I think this is a crucial moment for the Italian market, and I am very optimistic.


For more info on United Ventures, visit: