Innovation and Venture Capital: Italy 2025 Between Growth and Building

In 2025, Italy confirms significant growth in venture capital, but the momentum remains in a maturation phase: the total raised continues to surpass the symbolic threshold of one billion, but the transformation of market quality remains the central challenge. According to EY Venture Capital Barometer 2025, total fundraising stands at €1.488 billion, up 32% from Barometer 2024. It's a strong signal, especially when looking at the volatility of an active base still relatively narrow: fewer deals but larger, with the average round size rising and concentration around a few successful cases.

This context is also confirmed by independent analyses released during the year by StartupItalia and the Polytechnic University of Milan, which place the Italian market around one billion euros, with gaps related to the scope of observation and the classification of operations. The convergence of sources reinforces the bottom line: 2025 growth is real, but the ecosystem's maturity is still partial.

Quality of Growth and Market Dynamics

The first structural element highlighted by the Barometer concerns the quality of growth. In 2025 the number of rounds closes at 238, versus 292 in 2024, but the average deal value rises, moving from €3.9 million to €6.3 million. Fewer deals, but larger: a dynamic that indicates a clearer selection and a reduction in the market's active base. The trend appears coherent with other measurements and signals a phase in which Italian players reach sizes and impact capabilities no longer rare, but not yet widespread across the entire entrepreneurial fabric.

This concentration is not exceptional: five companies have raised about €700 million, almost half of total capital. At the top is Bending Spoons with €233 million, followed by Exein and AAVantgarde Bio. These operations show the capacity of some Italian players to compete on an international scale, but also reveal a structural fragility: the market grows because a few players show very strong growth, not because the ecosystem as a whole expands level by level.

Sectors, Pipelines, and What's Really Working

From a sectoral perspective, Deep Tech records the lead in funds raised, with €413 million, followed by Health & Life Science and Software & Digital Services. This indicates a growing specialization in advanced industrial technologies, cybersecurity, biotech, and high-tech B2B solutions. Yet the message goes beyond the single data point: the pipeline remains fragile, especially in the transition from seed to Series A and Series B. While rounds above €50 million are increasing, deals under €1 million are shrinking. The risk is an ecosystem capable of producing excellence but less effective at turning them into a steady flow of new scaleups.

At this stage, policies and regulatory dynamics have the opportunity to open markets, boost scale capacity, and improve competitiveness, strengthening a system that can deliver tangible impact if paired with targeted interventions.

A Geography of Investment: a Structural Gap to Close

The territorial distribution confirms a structural fracture. In Northern Italy, about €1.17 billion of fundraising is concentrated, with Lombardy above €900 million and over 60% of national investments. Lazio trails, while the South shows a contraction around 37% compared to 2024. It isn't a matter of individual excellences: it's about the density of the ecosystem, where capital, capabilities, and market are already concentrated and where the system self-sustains. Abroad, Italy remains below other European countries in terms of venture capital allocation, with per-capita and GDP indicators far lower than France, Germany, Spain, and the United Kingdom. The situation reflects a reality where growth is visible, but the ability to absorb shocks and negative cycles remains limited by market size and depth.

Towards System Maturity: Opinions and Outlook

“The challenge isn’t just to grow in quantity, but to transform the quality of innovation into broad and sustainable growth across all development stages,” says Marco Daviddi, Managing Partner of EY-Parthenon in Italy. “Regulatory developments now offer a concrete opportunity to strengthen the sector by expanding participation of institutional and international investors and supporting more structured growth paths for innovative firms. At this stage, it will be essential to focus on measures that promote market openness, scalability, and competitiveness, helping to reinforce Italy’s role in Europe’s innovation landscape.”

“The most relevant insight is not just fundraising growth, but the shift in market quality,” adds Gianluca Galgano, Head of Venture and Startup at EY Italy. “The ecosystem is evolving toward a more selective and specialized structure, with a growing presence of international investors in the major rounds. If this trend consolidates, Italian venture capital could stop growing by exceptions and start growing by structure, approaching more evolved European standards.”

This debate is crucial: on one hand there is the possibility of creating a continuous flow of capital and scalable companies; on the other, there is a need to strengthen the ability to maintain value domestically, avoiding dependence on a few successful cases. The Barometer suggests a concrete trajectory, but it requires governance oriented toward scale and internationalization, as well as a startup pipeline capable of growing step by step.

What’s the Next Step for Italian Innovators?

Looking at the bigger picture, Italy has a promising starting point: raising more than €1 billion is an actual starting point, not a target. What matters now is to translate this critical mass into an ecosystem capable of generating scaleups, industrial exits, and lasting local value. Italian companies aiming to grow should target larger rounds, but also governance that fosters sustained growth. On policy, it’s necessary to strengthen participation by institutional and international investors, facilitate early-stage capital entry, and create structured growth support pathways from research to industrialization.

In short, Innovation and Venture Capital in Italy is not only about numbers: it’s about the ability to turn science and ingenuity into companies that grow, create high-quality jobs, and contribute to a competitive European-wide ecosystem. 2025 confirms a positive trajectory, but also calls for bold choices to make that model sustainable over time.

Source: EY Venture Capital Barometer 2025

Fonte startupitalia.eu