Innovation in Italian startups: three levers to grow in 2025

Innovation in Italian startups is at the center of a complex dynamic: investments are stable but not explosive, exits are infrequent, and there is a need for new growth levers.

Innovation in Italian startups: 2025 context and prospects

According to the Observatory, equity investments in Italian hi-tech startup and scaleup companies stand at €1.456 billion: +2.8% versus the previous year. A hold, yes. But also a clear signal: we are stationary. No collapse, but not the scale-up leap we've all been hoping for for years.

Formal investors – independent VC funds, corporate and public – remain the backbone of the system, but they do not grow. Informal players are declining, as startup investment is opposed by risk-averse casual investors; and, for those who love risk, it is less fascinating and fashionable compared to other options. And even if international investments rise (+8%), they still belong to a few champions like Bending Spoons. Most importantly, structural exits are missing. An ecosystem without exits is a system that does not regenerate.

European comparison gives us a harsh reality: we remain at a quarter of France and below Spain in capital raised. Our funds are too small. Our scale-ups are too isolated. International capital arrives, but it is not enough. A systemic and bold action is needed.

The problem is not a lack of ideas. Italy has talent, has research, has deep tech. Indeed, 11 of the 15 most funded startups in 2025 operate in this space: space, biotech, clean tech, new materials. But it's time to say it clearly: without patient investments, without solid infrastructure, without clear exit paths, all this potential risks fading before becoming a business.

Also read: Startup, investments above a billion. “But to grow, more awareness is needed”

Three levers to unleash growth have emerged: institutional support for domestic funds, to make them larger and more specialized, capable of guiding startups from the early stage to the scale-up with substantial tickets; real integration between research and industry, to bring out innovation in high-impact sectors with long development cycles, such as deep tech; a coherent national and European strategy, with harmonized rules and tools like the '28th Regime' to reduce regulatory fragmentation and attract cross-border investments.

And a cultural shift is also needed. We must dispel the idea that startups and traditional entrepreneurship are at odds, recognizing that Italy boasts high-level digital and deep-tech value chains to cultivate. Perhaps, for the first time since 2012 we are seeing a 'cohort' of scaleups ready to drive future growth.

As the Observatory, we will continue to provide reliable data, telling virtuous stories but also failures, to highlight strategic and entrepreneurial bottlenecks. The ecosystem can still make a leap. But it's time to act.

Debate: differing views on how to evolve the ecosystem

The central question is whether the identified levers are sufficient or if more targeted interventions are needed. On one hand, there are those who argue that strengthening domestic funds and better integration between research and business could create a long-term investment pipeline, with broad capital able to accompany a startup from the early stage to the scale-up. In this framework, public policies can act as a multiplier of private resources, reducing negative externalities such as access to credit for high-risk but high-impact projects. The logic is clear: less regulatory fragmentation, more cross-border co-investment instruments, greater legal certainty on exits and on intellectual property rights. Moreover, focus on deep tech can ensure sustainable growth over research-to-market horizons that leverage international-grade infrastructure and talent.

On the other hand, there are those who warn about regulatory overload or poorly targeted incentives, which risk rewarding projects that are still not ready or diverting capital from truly transformative initiatives. In this view, it's essential to avoid promises of rapid growth and ad hoc promotions; the ecosystem needs real pipelines of success, not short-term promotional trips. Furthermore, the issue of exits remains crucial: without clear pathways to active exit management, we risk creating an ecosystem dependent on foreign capital and external stakeholders, rather than building a distinct capacity to generate autonomous and scalable enterprises.

Another view concerns human resources management: investments and well-designed incentives should target regional talent, not only the traditional centers, to avoid geographic dispersion and ensure innovative competition spreads, with impact on university networks and research centers. At the European level, regulatory coherence and the use of common tools could accelerate capital and knowledge mobility, but we must avoid standardization that stifles the openness of Italian companies to local characteristics. In short, the debate calls for balancing targeted actions with organic development rhythms, recognizing that there is no one-size-fits-all fix for the system: a combination of capital, policy, entrepreneurial culture, and cross-border collaboration is needed.

For founders and innovators, the lesson is clear: build effective networks, have a clear development plan, and listen to diverse market perspectives. Companies that manage to combine investments, applied research, and a long-term vision will be able to turn innovation into enterprises capable of growing and competing internationally.

Conclusion: which direction to take for Italian innovation

In short, innovation in Italian startups requires a mix of patient capital, stronger links between research and business, and a coherent European strategy. If these levers are put into operation, Italy can take concrete steps toward real growth of the scale-up base and a more favorable environment for exit of tech companies. The invitation to founders is to look at the interconnection between universities, research centers, investors, and international markets, and to build growth paths sustained over time. Acting now means turning potential into business.

Fonte startupitalia.eu