According to IBAN (Italian Business Angels Network Association), the Italian Business Angels (BAs) invested over € 51,2 million of capital into startups in 2020, pretty much in line with the previous year (€ 52,7 million in 2019).
This demonstrates the importance of angel investing for the resilience of the Italian startup and innovation ecosystem. BAs were able to provide capital to the startup ecosystem even in times of crisis.
The total number of deals increased from 88 in 2019 to 99 in 2020, with a consequent reduction of the average investment amount in each deal (by either a single or a group of BAs). More than 50% of the deals did not exceed € 100k, and only 5% of the deals exceeded € 500k.
The average investment ticket per BA per company was € 50k, with a confirmed greater preference for companies in the startup phase (57%) than those in the seed phase (43%).
Alongside deals concluded by BAs alone, investments continue to be made together with venture capital funds or through equity crowdfunding platforms. The total fundraising of startups and scaleups in which the BAs invested amounted to € 402.5 million. The average investment ticket of a BA through crowdfunding platforms was around € 12.5k.
Moreover, Italian BAs invested together with venture capital funds. They participated in 108 VC deals, for a total invested capital of € 325 million, including VC funds.
About 95% of the deals were conducted by Italian investors, with an average number of 11 individual BAs per deal, confirming the trend for BAs to syndicate to increase the overall financial contribution, reduce individual transaction costs and the risk in case of deal failure.
BAs provide capital mainly through equity subscriptions and to a lesser extent through shareholder loans or bank guarantees. In more than 50% of the deals, capital protection terms are foreseen.
The most attractive sectors were ICT (30% of total investments in 2020), consumer goods (12%), health care (7%), and pharma and biotech (7%).
77% of target companies were innovative startups or SMEs; 75% of companies were located in the north of Italy and just 4% abroad.
The typical Italian BA is a man between 40 and 55 years, with a high level of education and professional experience (managers and entrepreneurs); only 11% of Italian BAs are women.
These figures are in line with the investor profile identified by Social Innovation Monitor (SIM) (See The Italian Business Angels profile and investment approach: the 2020 Social Innovation Monitor (SIM) research).
On average, BAs have personal assets between € 1 and 2 million, of which approx. 11% are dedicated to angel investing, for a portfolio of about 6 companies.
The main reasons for BAs not to invest in a project are:
- limited growth potential (18%)
- lack of time (16%)
- doubts about managers’ skills (14%)
Regarding exits, only 9% of Italian BAs confirmed at least one exit in 2020, with an average holding period of 3 years. The most popular exit strategy in 2020 was the sale to other investors.
SUBSCRIBE TO THE SCALEUPITALY NEWSLETTER
The report (in Italian) is available at the following link: https://bebeez.it/wp-content/uploads/2021/07/Survey-IBAN-Investimenti-2020_def-2.pdf