Italian venture capital investments reached €1.74 billion in 2025, up 18% from 2024, with funding rounds rising to 436 from 405.
These figures are based on estimates from the Observatory on Venture Capital in Italy, conducted by Growth Capital, a tech investment bank specializing in venture capital, in collaboration with Italian Tech Alliance, the national association of venture capitalists, innovation investors, and startups.
2025 ranks as the second-best year ever for total investment volume, behind 2022. Excluding mega-rounds, it takes the top spot.
Italian venture capital saw dynamic shifts in deal trends throughout 2025. 10 rounds exceeding € 25 million drove much of the overall growth. The fourth quarter broke records, with € 901 million raised across 122 rounds, a sharp rise from the € 316 million and 105 rounds in the third quarter.
Series A rounds remained steady at 53, while Series B dropped to just 14. Meanwhile, bridge rounds continued their upward trajectory. Seed-stage investments gained ground in terms of value, often at the expense of later Series B+ rounds, and the decline in Series C+ activity further highlighted late-stage funding as the primary bottleneck in Italy’s VC ecosystem. Confidential deals played a significant role in boosting both the number of transactions and total volume, and many larger rounds incorporated debt or secondary sale elements.
Smart City led the charts by deal count with 71 rounds, closely followed by Software at 62, Deep Tech with 60, Life Sciences at 58, and FinTech in fifth place with 43. Looking back over the past five years, these sectors have evolved gradually through varied year-to-year dynamics rather than uniform expansion, with Smart City firmly establishing its dominance. When measured by investment value, Software led 2025 with € 494 million, followed by Life Sciences at € 417 million and Deep Tech at € 269 million. Life Sciences and Software delivered the strongest growth over the 5 years, followed by Deep Tech, while FinTech and Smart City experienced peaks largely fueled by mega-rounds.
The investor landscape reached new heights, with 354 active investors participating, the highest on record. International involvement surged to 46%, more than double the 24% seen in 2020, driven primarily by U.S. and other European investors. This global interest showed a strong correlation with deal size: every round surpassing € 20 million included at least one foreign investor, underscoring how larger opportunities draw international capital.
On exits and fundraising, activity remained subdued. M&A totaled just 31 deals (excluding AXA’s high-profile acquisition of Prima) with no IPOs recorded, a trend that points to the ongoing challenges in Italy’s exit market. Meanwhile, 9 new funds successfully raised € 545 million, marking a slowdown from 2024’s record highs but still bolstering the ecosystem’s dry powder reserves. This period also saw rising momentum from vertical-focused funds and first-time VC operators.
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The full report is available at the following link: https://www.italiantechalliance.com/_files/ugd/ffd03c_1dbf222588274e1885e19f9a60114897.pdf