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Surging homegrown talent and VC spark Italy’s tech renaissance



As Italy reinstates many COVID-19 restrictions, the country’s tech ecosystem is watching and waiting to see what the wider effects of the emergency will be. Italy’s ecosystem for tech venture capital and startups has been in development for years and has made decent strides in the last decade. Will the coronavirus stymie their efforts?

Put off by high taxes and paperwork in their home country, many Italian entrepreneurs moved to places like London in years past to startup. Indeed, the Italian Ministry of Economic Development and the Italian Trade & Investment Agency in London have even been known to fund Italian entrepreneurs abroad to help them gain more experience. There are an estimated 100,000 Italians already living in London, attracting the likes of Riccardo Zacconi, co-founder of (maker of Candy Crush) and Simon Beckerman of social shopping app Depop.

Rome has more than 20 incubators/accelerators and many established VCs; because of its lower costs compared to other European cities, it’s become a major base for startups. However, while many startups exist in cities like Turin, Bologna, Naples and Rome, Milan is generally seen as a bigger ecosystem because of its mercantile culture and a significant share of VC funds.

The good news: VC funding in Italy has grown. In 2019, Italian startups attracted $850 million, compared to just €140 million in 2017, as the VC ecosystem became less insular and more international investors arrived. Milan tends to attract the lion’s share of VC funding — in 2019, startups located there received €311 million, according to NGP Capital. In 2019, about 300 deals were venture-backed.

Even so, Italy is still very much behind its European counterparts, which means founders tend to move their HQ to fundraise elsewhere, while keeping their comparatively cheaper workforce at home. Italy continues to have structural problems for startups: Credit is based on a company’s financial history, so loans are off-limits.

However, in June 2020, the Italian government sponsored a €1 billion investment program aimed at the native startup ecosystem, creating a new venture arm: CDP Venture Capital.

This has seven different funds under management, including a VC fund-of-funds, “Series A/B matching” funds and acceleration funds. It has also launched two different acceleration projects aimed at supporting SMEs and startups with mentoring, networking and support services.

Additionally, the Ministry of Economic Development launched an initiative called The Italian Startup Act that bundled previously passed legislation to incentivize the Italian ecosystem with tools like tax breaks on early-stage investments and R&D credits, plus a startup visa to attract talent.

Entrepreneurs still face plenty of red tape, however, which is tough enough for Italians, let alone outsiders who might consider relocating. And skeptical observers are concerned that some of the government-backed initiatives look like the government is trying to pick winners, which rarely ends well. Plus, there is controversy about how a €209 billion recovery fund from the European Union, earmarked for the country’s 11,000 startups, will be spent.

But the talent pool is increasing, with Italian universities attracting more overseas students with English-language-based courses and big corporates investing. Microsoft has announced a $1.5 billion investment plan, which includes its first cloud data center in the country. NTT data is investing in Calabria. Amazon has invested in new infrastructure. And Apple has sponsored a Naples-based developer academy.

With a population of 60 million (for comparison, U.K.: 66 million, Germany: 83 million, Spain: 46 million), Italy is not lacking in people, but GDP per capita is a low $34,000. It has an estimated 67 VC funds, with 18 of them started since 2015.

Notable startups from Italy include MoneyFarm (which has raised $127 million from United Ventures, Allianz), (€100 million, Blackstone, Goldman Sachs), Soldo (€83 million, Accel, Battery Ventures), Casavo (€59 million, Greenoaks, Picus, Project A, 360 Capital), Milkman (€32 million, p101, 360 Capital Partners) and Mosaicoon (€12 million).

Approximately half of seed to Series A funds have raised $100 million+ funds in the last year. However, seed rounds for startups remain low, even for Europe, ranging from anywhere from €300,000 to €1 million.

ScaleIT is a notable tech business event for the country (which clearly took over from the fabulous TechCrunch Italy events of a million years ago).

And finally, WeWork is opening two more buildings in Milan, taking it to five locations in the city, by mid-2021. Milan-born Talent Garden, which has raised €56 million, is still bullish about co-working despite the pandemic. While this was announced before news of a vaccine emerged, it’s clear that major players are still betting on Italy’s emerging tech ecosystem.

These are the investors we interviewed:

Giulia Giovannini, partner, United Ventures

What trends are you most excited about investing in, generally?

We are sector-agnostic in our approach, and we invest both in B2B and B2C tech/digital companies from various industries. We mainly invest in SaaS companies with some proven traction in the market – but overall, we seek the best technology entrepreneurs that want to make an impact. Our focus is on entrepreneurial and technological initiatives aimed at digitalizing and increasing the productivity of traditionally undigitized sectors. Lately, we have been looking into insurtech and medtech.

What’s your latest, most exciting investment?

In October 2020, we led a $7M Series A round in Boom Image Studio, a Milan-based company on a mission to reshuffle the world of commercial photography by transforming the way digital photo content is generated. We believe that Boom will significantly accelerate the photography industry’s digital transformation, dramatically improving the photo production experience for customers and photographers.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?

The strategy of venture capital is not to capitalize on the continuity of trends already existing on the market or to focus on the hype of the moment, but rather the exercise of imagining the demands of tomorrow, intercepting products and services capable of reinventing entire sectors with a view to a future industrial policy. Startups using tech to foster remote work, education, healthcare are undoubtedly in the spotlight at the moment: the key question is which technologies and platforms can meet current priorities and remain relevant in the post-pandemic future.

What are you looking for in your next investment, in general?

There is no such thing as a “typical United Ventures company,” but there is a paradigm that all our best investments have in common: ambitious founders with strong values and who know how to inspire their team, with an entrepreneurial project focused on a large growing market and the ability to scale internationally.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?

I have seen too many startups in payment services. I think the wave has passed.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?

We are a European VC with a strong focus – approximately 50% – on the Italian ecosystem, where we are best placed to support teams in terms of value-add. We are committed to making the most of the Italian market’s peculiarities, connecting Italian entrepreneurs and talents to the global market. On a national level, we are active all around Italy, with startups headquartered in Milan, Rome, Bologna, Pisa.

Which industries in your city and region seem well-positioned to thrive, or not long-term? What are companies you are excited about (your portfolio or not), which founders?

Milan is well positioned on fintech matters, while Italy is home to many exciting initiatives very much oriented towards deep technologies thanks to research centers of excellence such as Milan and Turin Polytechnics and the IIT (Italian Institute of Technology). Concerning our portfolio, I am very excited by Credimi, a digital lending platform offering digital factoring solutions to enterprises experiencing significant growth rates, and I’m looking forward to working with Boom, our latest investment.

How should investors in other cities think about the overall investment climate and opportunities in your city?

The Italian ecosystem is still small compared to other European hubs, but it has been developing rapidly in recent years. Milan has earned a national hub’s status and reached that critical mass — of large companies, multinationals, universities with cosmopolitan vocation, new companies — capable of generating an ecosystem able to attract the best talents and connect them with other continental and global hubs.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?

I think startups will continue to gravitate around big cities’ hubs because they bring value in terms of network and contamination. However, the pandemic has allowed an acceleration in the adoption of remote work organization, enabling the search and recruitment of talents from abroad. Many of our portfolio companies opened up fully-remote roles.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?

B2C startups are certainly favored due to the increased penetration of e-commerce. On the other side, the adoption of new B2B business models may be slowed down by the modus operandi of large companies that are not at their ease signing remote commercial agreements, causing delays.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?

Our role, as Venture Capital investors, is to support our portfolio companies at our best capacity. Getting fundraising done and signing customer deals has been challenging in these months, so our advice is, first of all, to control and manage the cash carefully. We highlighted the need to communicate effectively and realistically with their employees, clients, and stakeholders. Concerning our investment strategy, we refocused on the Italian market.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?

Tech startups are facing challenges and opportunities. Our portfolio is navigating the pandemic with determination and creativity. For example, Credimi has put in place several initiatives to aid Italian SMEs to face the COVID-19 emergency. More generally, B2C startups have seen significant growth in revenues, while B2B startups have, in some cases, seen a lengthening in the average time taken to underwrite commercial contracts.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.

Having managed to close the investment in BOOM working remotely with the startup from the first meetings to the closing, I had the confirmation that our job can be easily managed through remote work.

Any other thoughts you want to share with TechCrunch readers?

Technology is driving radical change across all aspects of our life, and the uncertain times we are going through has accelerated the digital transformation in multiple ways. Our job requires a long-term outlook: now more than ever, we are confident in technological innovation’s potential to lay the groundwork for a brighter future.

Anna Tampieri, partner, ENEA Tech

What trends are you most excited about investing in, generally?

Material science and biotech.

What’s your latest, most exciting investment?

Green Bone Ortho.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?

Startups dealing with new materials.

What are you looking for in your next investment, in general?

Innovative materials and solutions coming from recycling and the circular economy.

What are companies you are excited about (your portfolio or not), which founders?

Food and beverage, biotech, automation and tourism.

How should investors in other cities think about the overall investment climate and opportunities in your city?

Before the pandemic the business climate was positive, even if it was challenging.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
No, I don’t expect that: I think that the pandemic will create a move towards “localism.”

What are the opportunities startups may be able to tap into during these unprecedented times?

Mainly biotech and company involved in developing various anti-COVID solutions.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?

Startups dealing with new solutions for personal mobility.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?


What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.

The moment that I contacted a newco developing an innovative cure for COVID-19 using monoclonal antibodies.

Any other thoughts you want to share with TechCrunch readers?

I would share an unpopular thought: To focus more on true innovations versus the short-term economic return.

Giuseppe Donvito, partner, P101 Ventures

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While mainland America struggles with covid apps, tiny Guam has made them work



As covid-19 cases spiral out of control in the US, states are scrambling to fight the virus with an increasingly stretched arsenal. Many of them have the same weapons at their disposal: restrictions on public gatherings and enforcement of mask wearing, plus testing, tracing, and exposure notifications.

But while many states struggle to get their systems to work together, Guam—a tiny US territory closer to the Korean Peninsula than the North American mainland—may offer clues on how to rally communities around at least one part of the puzzle: smartphone contact tracing.

With no budget, and relying almost entirely on a grassroots volunteer effort, Guam has gotten 29% of the island’s adult residents to download its exposure notification app, a rate of adoption that outstrips states with far more resources. 

A collaborative effort 

Guam diagnosed its first covid cases in March, but a few weeks later, it gained international attention—and a much bigger case load—when a covid-stricken US Navy ship was ordered to dock at the Naval base on the island. Sailors who tested negative were quarantined in local hotels and forbidden from interacting with civilians.

Having so many positive cases on the island drove home how vulnerable the island really was—but it also created a lot of new volunteers looking for ways to help out. 

Around the same time, Vince Munoz, a developer at the Guam-based software company NextGenSys, got a call. The island was being offered a partnership with the PathCheck Foundation, a nonprofit that was building government contact tracing apps. Munoz immediately saw an opportunity to help his community fight this new threat.

“It is something you do to help other people,” Munoz says. “It empowers you to help reduce the spread of the virus.” 

Digital contact tracing is a potentially low-touch way for health departments to reduce the spread of covid-19 by using smartphones to track who’s been exposed. And even if exposure notifications aren’t the panacea many technologists hoped for, new research suggests that breaking even a few links in the chain of transmission can save lives. 

So Munoz’s team of volunteers connected with PathCheck—which was founded at MIT—and they started building an app called Covid Alert. Like the majority of America’s exposure notification apps, it uses a system built by Google and Apple and uses Bluetooth signals to alert people that they’ve crossed paths with someone who later tests positive. From there, they are urged to contact the island’s local health authorities and take appropriate action. Everything is done anonymously to protect privacy. 

After several months of testing and tweaking, the app was ready. But it was still missing an important piece: users. After all, any contact tracing app needs as many downloads as possible to make a difference. Munoz knew just the people to build buzz: the Guam Visitors Bureau. Tourism is massively important to the island, which gets more than 1.5 million visitors each year—almost 10 times the local population. In pre-pandemic times, the bureau helped tourists plan trips to Guam’s “star-sand beaches.” Staff jumped at the chance to help.

With assistance from Thane Hancock, a CDC epidemiologist based on the island, and Janela Carrera, public information officer for the Guam Department of Public Health and Social Services, the team started building a marketing campaign.

“Because we didn’t have any funding, we decided to do a grassroots campaign,” says Monica Guzman, CEO of Guam-based marketing company Galaide Group, who works with the bureau. Guam is a very small community. We’re all either related or neighbors or friends.”

While PathCheck and Munoz’s development team worked on building the app, the Visitors Bureau began reaching out to community groups and nonprofits to build awareness. It hosted Zoom calls with organizations, schools, and cultural groups across the island with the message that the app could help suppress the virus, if enough people were willing to “be a covid warrior.”

“The schools, the government agencies, the media, they all jumped on board,” Carrera says.

Together, these efforts are part of what ethics researchers at the Swiss Federal Institute of Technology recently called the “piecemeal creation of public trust.” To get people to use a novel technology like exposure notification, you have to reach people where they live and get buy-in from community leaders. 

It takes a village (on WhatsApp)

Once the app was ready to launch in September, it was time to get the word out. 

The day before the official launch, Visitors Bureau marketing manager Russell Ocampo sent a message about the app to Guam’s notoriously large and unruly WhatsApp groups. That message ricocheted around the island, resulting in almost 3,000 downloads immediately. “I received it back like 10 times from other people,” he says. 

A further 6,000 people signed up the next day during a press conference, including the governor, who downloaded it while live on the air. 

The effort received a show of support that many US states and territories could only dream of. All three major telecom companies on the island sent free texts encouraging people to download the app. A local TV station, meanwhile, ran a two-hour “download-a-thon,” to try driving uptake. The show featured performances by local musicians, interspersed with information about the app, including debunking myths about privacy and other ongoing concerns. Viewers were offered the chance to win $10,000 in prize money, much of it donated personally by Guam Visitors Bureau members and others who worked on the app, if they could prove they downloaded the app during the program. 

The Guam Visitors Bureau has offered other cash prizes for government agencies whose employees rack up the most downloads. And small businesses, eager to get the economy back on its feet, have offered give-aways to customers — one shopping center is offering a box of chocolates to visitors who download the app.


But, crucially, has the app worked? Despite a successful launch, Guam’s covid-19 response has faced major challenges overall. Many people, especially those from minority ethnic groups who came to Guam from other Pacific islands, live in multi-generational, overcrowded housing, often with limited access to healthcare and even basic hygiene tools like municipal sewage. The health department recently launched door-to-door testing in these neighborhoods, and found positivity rates as high as 29%.

At the beginning of April, the governor’s office projected that the virus could kill 3,000 people—almost 2% of the island’s population—over the next five months. That dire prediction has yet to come true. As of Monday, Nov. 30, 112 people have reportedly died of covid on the island. Overall, the territory’s trajectory has been typical of America itself: Cases remained low through most of the summer, before ticking steadily up through the fall and spiking in early November. 

While a large proportion of residents have downloaded the app, one major challenge has been getting people to upload positive test results. This is in part because people are often in shock when they first receive the news about their diagnosis, according to Janela Carrera, the health department officer.

Contact tracers call everyone who tests positive, and part of their script involves recommending that people upload their positive result: That’s how the app knows to send (anonymous) exposure notifications to people who’ve been near each other. But that first call can feel extremely stressful, and it’s not a great time to suggest they try out a new app or go through the process of entering a special numerical code that kicks off the chain of notifications. 

“Especially if they’re symptomatic, they may feel like, ‘oh my gosh, I may not make it through this,’ or ‘I might be infecting others in my home.’ So [contact tracers] follow up with them a few days later, once they’ve had a chance to recuperate, and offer the code then,” Carrera says.

Clearly, though, some people are uploading the codes. “I’ve had co-workers tell me, ‘Janela, oh my God, I got a notification!’” Carrera says. Ocampo himself received one in October, and quarantined for 14 days. 

This is boosted by the fact that when public health workers do their door-to-door testing, they offer information about how to download the app. At the same time, other strategies, often shared through multilingual PSAs on local radio, may be more effective for people in these communities, who often don’t use smartphones for anything more than texting, according to Munoz.

Guam faces one other challenge that’s very common worldwide. It’s difficult to know exactly what effect the app is having, says Sam Zimmermann, CTO of PathCheck Foundation.

Zimmermann says: “Because Guam cares a lot about privacy and making sure their systems are safe, their app doesn’t have any kind of analytics or logging,” like whether users actually learn how the app works after downloading it or whether they pay attention if they receive an exposure notification. 

Still, while the team launched the app hoping to achieve a 60% download rate based on an early mathematical model, there’s now evidence that even a much smaller portion of the population using it may have a positive impact.

Munoz, for one, hopes the app will help take pressure off health officials doing labor-intensive outreach like door-to-door testing.

“Manual contact tracers have a very difficult job. They can’t keep up with everyone who tests positive,” Munoz says. “Any little percentage helps.”

This story is part of the Pandemic Technology Project, supported by the Rockefeller Foundation.

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With an eye for what’s next, longtime operator and VC Josh Elman gets pulled into Apple



Josh Elman is moving over to Apple, he announced on Twitter today, saying he will be focused on the company’s App Store and helping “customers discover the best apps for them.”

Asked for more details about his new role, Elman referred us to Apple, which confirmed his employment but declined to offer more, including about his new title. (This is typical operating procedure for the tech giant.)

Certainly, Elman has plenty of experience with fast-growing technologies and popular apps in particular.  One of his first jobs out of Stanford was with RealNetworks, a bubble-era internet streaming company that went public in 1997, three years after it was founded. (It remains publicly traded, though its market cap is just $60 million these days.)

After RealNetworks, it was on to LinkedIn, which Elman joined in 2004 as a senior product manager when the company was just two years old.  From there, Elman worked in product management at the custom apparel and accessories company Zazzle, then at Facebook, then Twitter.

Perhaps unsurprisingly, the venture firm Greylock brought Elman into the fold in 2011 as a principal, and by 2013, he was a general partner, investing in social networking deals throughout like (Bytedance acquired the company and turned it into TikTok); Nextdoor (which is reportedly eyeing ways to go public); Houseparty (acquired last year by Epic Games, which is now suing Apple); and Discord (which is sewing up a private funding deal at a valuation of roughly $7 billion).

Somewhat unexpectedly, in 2018, Elman left his full-time role with Greylock to join a company notably not in the firm’s portfolio, the stock-trading platform Robinhood. As interesting, though he took on the role of VP of product at the popular and fast-growing startup, he didn’t cut ties with Greylock entirely, taking on the title of venture partner and remaining on as a board member to his companies.

Asked about the move, Elman told TC at the time that he had “started talking with a few of my partners about how I want to spend the next decade of my professional life. What gets me the most energized is when I can dig in on product with a hyper-growth company.”

Ultimately, the role didn’t last long, with Elman leaving last November after less than two years on the job. Now Elman — who said he’s stepping away from some of his Greylock-related board seats —  has a new chance to do what he loves most that from one of the most powerful perches in the world, the App Store.

“I’m really excited to get to build ways to help over a billion customers and millions of developers connect,” he tweeted earlier. He added in the same thread: “I recently found my college resume. My career objective was ‘To create great technology that changes people’s lives’. Still at it :)”

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Vista acquires Gainsight for $1.1B, adding to its growing enterprise arsenal



Vista Equity Partners hasn’t been shy about scooping up enterprise companies over the years, and today it added to a growing portfolio with its purchase of Gainsight. The company’s software helps clients with customer success, meaning it helps create a positive customer experience when they interact with your brand, making them more likely to come back and recommend you to others. Sources pegged the price tag at $1.1 billion.

As you might expect, both parties are putting a happy face on the deal, talking about how they can work together to grow Gainsight further. Certainly, other companies like Ping Identity seem to have benefited from joining forces with Vista. Being part of a well-capitalized firm allowed them to make some strategic investments along the way to eventually going public last year.

Gainsight and Vista are certainly hoping for a similar outcome in this case. Monti Saroya, co-head of the Vista Flagship Fund and senior managing director at the firm, sees a company with a lot of potential that could expand and grow with help from Vista’s consulting arm, which helps portfolio companies with different aspects of their business like sales, marketing and operations.

“We are excited to partner with the Gainsight team in its next phase of growth, helping the company to expand the category it has created and deliver even more solutions that drive retention and growth to businesses across the globe,” Saroya said in a statement.

Gainsight CEO Nick Mehta likes the idea of being part of Vista’s portfolio of enterprise companies, many of whom are using his company’s products.

“We’ve known Vista for years, since 24 of their portfolio companies use Gainsight. We’ve seen Gainsight clients like JAMF and Ping Identity partner with Vista and then go public. We believe we are just getting started with customer success, so we wanted the right partner for the long term and we’re excited to work with Vista on the next phase of our journey,” Mehta told TechCrunch.

Brent Leary, principle analyst at CRM Essentials, who covers the sales and marketing space, says that it appears that Vista is piecing together a sales and marketing platform that it could flip or go public in a few years.

“It’s not only the power that’s in the platform, it’s also the money. And Vista seems to be piecing together an engagement platform based on the acquisitions of Gainsight, Pipedrive and even last year’s Acquia purchase. Vista isn’t afraid to spend big money, if they can make even bigger money in a couple years if they can make these pieces fit together,” Leary told TechCrunch.

While Gainsight exits as a unicorn, the deal might not have been the outcome it was looking for. The company raised more than $187 million, according to PitchBook data, though its fundraising had slowed in recent years. Gainsight raised $50 million in April of 2017 at a post-money valuation of $515 million, again per PitchBook. In July of 2018 it added $25 million to its coffers, and the final entry was a small debt investment raised in 2019.

It could be that the startup saw its growth slow down, leaving it somewhere between ready for new venture investment and profitability. That’s a gap that PE shops like Vista look for, write a check, shake up a company and hopefully exit at an elevated price.

Gainsight hired a new chief revenue officer last month, notably. Per Forbes, the company was on track to reach “about” $100 million ARR by the end of 2020, giving it a revenue multiple of around 11x in the deal. That’s under current market norms, which could imply that Gainsight had either lower gross margins than comparable companies, or as previously noted, that its growth had slowed.

A $1.1 billion exit is never something to bemoan — and every startup wants to become a unicorn — but Gainsight and Mehta are well known, and we were hoping for the details only an S-1 could deliver. Perhaps one day with Vista’s help that could happen.

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