August 3, 2020 Statistics

The impact of Covid-19 on the Italian start-up ecosystem

The impact of Covid-19 on the Italian start-up ecosystem was less devastating compared to what happened to “more traditional” Italian SMEs and corporates.

According to the recently published survey “The impact of the Covid-19 emergency on start-ups and on the innovation ecosystem in Italy”, conducted by VC Hub Italia in collaboration with EY, Italian start-ups and investors in innovation demonstrated significant resilience during the health emergency period.

The survey comprises start-ups operating mainly on the Italian market (68%), mostly based in Lombardy (the most affected area), largely established in the last 5 years (62%), and covering all sectors, with a prevalence of retail and e-commerce.

The study includes early-stage companies that have recently started their businesses and raised seed capital, but also more mature scale-ups, which have raised larger sums.

During the health emergency period, 58% of the surveyed start-ups increased their staff, 32% of them got an increase in demand and 27% of revenues.

According to 52% of the companies, the current situation will last up to 6 months; 85% of them are convinced that their businesses will return to the pre-pandemic levels, once the emergency ends.

Most of the companies (62%) had people working remotely without compromising productivity, and 67.5% of them did not make any investments to facilitate smart working.

These positive results were accompanied by some difficulties. 68% of the start-ups declared they suffered a reduction in demand, 80% of them had to reduce salaries of the existing staff (amounts up to 15%), and 55% of them had to use the Government’s temporary lay-off scheme for employees.

Therefore, 41% of the start-ups are considering venture debt, while 16% of them are already working on that.

As for the VC fund managers involved in the survey, the main issues encountered during the Covid-19 emergency were: liquidity problems; a slow-down in the fundraising process; or the failure of one or more start-ups. Consequently, 54% of them are already planning to raise more capital.

Moreover, 20% of VC funds have start-ups in their portfolios that experienced a 50%+ increase in demand, whilst 53% of them had to deal with companies whose demand decreased by less than 50%.

Both start-ups and investors would like the Government to be supportive, with direct and indirect grants, and a simplification of the administrative processes.

In particular, the sought investments are the ones related to digital infrastructure, labour legislation (with a focus on smart working) and grants (e.g.: discounts, tax reduction).


You can find the detailed statistics (in Italian) at the following link: